There aren’t many industries that generate as many complaints as the car rental industry.
While there are certainly plenty of car rental businesses that do the right thing, too many are routinely overcharging or even outright scamming their customers. Some of the particularly egregious methods include charging for pre-existing damage and even simply changing the cost of the rental after they’ve already returned the car.
The problem is that there are barely any consequences for car rental businesses that “try it on”. This has become such a widespread problem, in so many different countries, that the time has probably come for governments to intervene to protect consumers.
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The many, many ways car hire companies try to rip off customers
Ask almost anyone who’s rented a car, and they will probably have at least one horror story. There are just so many potential traps that customers need to be aware of. It’s all a bit of a minefield, really.
We don’t have to look far to read some of those horror stories. The Australian Frequent Flyer forum alone is littered with complaints about car hire scams and rip-offs, both in Australia and overseas.
Here are just a few examples of things that car rental businesses are doing:
- Charging for pre-existing damage to the car
- Accusing the renter of causing damage that doesn’t actually exist
- Massively overcharging for minor repairs to the rental car
- Unilaterally changing the cost of the rental, without the customer’s knowledge or consent, after they’ve already dropped the car off
- Providing a worse car than the customer originally booked
- Charging for returning the car late, even though the customer returned it on time
- Overcharging for fuel or falsely claiming the customer returned the car with an empty tank
- Charging for extra kilometres that the customer did not actually drive
- Charging excessive fees for processing speeding or parking fines
- Not refunding charges when the vehicle was faulty and didn’t work
- Not returning deposits
Some companies have even been accused of scamming customers systematically.
And then there’s the reprehensible story of Hertz in the USA falsely accusing customers of stealing their cars. This led to at least 364 Hertz customers getting arrested for simply renting a car from Hertz.
Some rental companies wait for the customer to leave the city before inflicting extra charges
Airport locations are particularly “good” at adding extra charges to someone’s bill after the rental period has ended – knowing that the customer is probably already in the airport or flown to another city by the time they’re notified of the extra charges. This makes it harder for the customer to fight the charges, especially if the rental company automatically deducts them from the credit card on file.
Sometimes, the only way to get these charges reversed is to submit a credit card chargeback request.
Steps you can take to protect yourself against car rental scams
There are so many potential traps with rental cars that I personally try to avoid using them where possible. But sometimes, they really are just the most practical way to get around at your destination.
So, if you do need to rent a car, how can you avoid getting scammed?
Check the reviews
When renting from an agency I haven’t used before, I always check the Google reviews. Pretty much every car rental business will have some negative reviews, but if the majority are negative and many of those reviews complain about getting scammed, I’ll give that business a wide berth.
Even if you trust a particular brand, many rental businesses are run independently as franchises. So, just because you had a good experience somewhere with a particular company, doesn’t necessarily mean the same thing will happen when you rent from the same company in a different city or country.
Take photos before and after every rental
A good way to protect yourself from fake damage charges, or being charged for pre-existing damage, is to take photos of all sides of the car. You might even take a video while walking around the car.
Do this right after you pick it up, and right before you drop it off. This way, you have time-stamped evidence of the car’s condition.
I also take photos of the dashboard showing the odometer and fuel gauge. This protects yourself against fake charges for excess kilometres or returning the car without enough fuel. (I also keep all fuel receipts for this reason.)
Take out the zero-excess insurance
I’ve heard so many stories about people being charged for damage they didn’t cause, that I now always take out the top insurance cover with zero excess. This obviously protects me in case I happen to be involved in an accident, but that’s not the main reason I get this. It’s also insurance against the rental company itself.
When you have zero-excess insurance, the rental company won’t charge you extra for damage even if you do (accidentally) cause it. This means that, when you return the vehicle, staff are not incentivised to thoroughly examine the car, looking for any kind of defect they can bill you for. (Yes, this does happen.)
Of course, this insurance often costs just as much as the car rental itself. If the extra cost makes the rental cost uncompetitive, I might choose to use an alternative means of transport instead.
Why are car rental scams so common?
To be clear, not all vehicle rental businesses are actively trying to scam their customers. Many do the right thing, knowing that good reviews and repeat business is important.
I can also imagine that running a car rental business is expensive, and it is fair enough to charge customers if they do actually cause damage or don’t return the car on time.
Despite this, car rental scams are way too common. Why? I think this AFF forum post gets to the heart of the issue:
What is the incentive for car hire companies not to ‘try it on’ by adding additional charges.
Today, after returning the vehicle with a full tank they added the fuel surcharge to my bill. Of course, all apologetic but what really is the incentive for them to be honest?
As a lone irregular hirer I don’t have enough intel to be able to track it down. Are others being systematically rorted? How many occurrences would ACCC need to receive to get interested? Unfortunately I only have the one rental in Australia.
albatross710 on the AFF forum
The incentives are all wrong
It seems that many car rental businesses opportunistically add extra charges that they know are not legitimate because they can!
Sure, savvy customers will usually notice the extra charges and fight to get them removed from the bill.
When this happens, the rental agency will usually remove the erroneous charges and that’s the end of it. The business almost certainly won’t get fined or penalised for its conduct. And the customer is unlikely to take legal action once the charges are removed.
At the same time, some customers might not notice the extra charges. Others might just pay them anyway because they can’t be bothered arguing or their employer is paying the bill anyway.
So, the business might make some extra money. But at the same time, they don’t really risk losing anything if the customer fights the charge – other than perhaps a bit of goodwill. With those odds, there really isn’t much of an incentive for businesses to do the right thing!
Besides, many customers are visiting from interstate or overseas. Even if they never rent from that agency again, there will still be many other new customers in the future who will.
Quite often, the franchisor also fails to take action to bring their franchisees into line – even when they may be damaging the brand’s reputation.
This is why I think it’s time for governments to create real financial penalties for car rental companies that deliberately try to trick customers into paying more than they should. The car rental industry needs regulatory reform.
It’s not good enough for the company to simply waive fake charges if the customer happens to claim. There should be real financial penalties for even attempting to wilfully overcharge. Otherwise, customers will continue getting ripped off in broad daylight.
