The ACCC's Hertz case shows why you should photograph your hire car before driving off

Photo by Nick Laham/Getty Images

A few quick smartphone photos of your rental car before you head off may save some major arguments and money with the hire car company in the future if the latest release from the competition watchdog is anything to go by.

Hire car company Hertz Australia has promised to refund customers and improve its damage assessment procedures after it was found to be charging them for pre-existing damage after hires for nearly three years.

The Australian Competition and Consumer Commission (ACCC) investigated Hertz as part of a wider review into the vehicle rental industry and found that 2013 to August 2015, Hertz told customers that the vehicle that they had hired was damaged during their rental period, when the damage was pre-existing.

Hertz then incorrectly invoiced and charged them for the vehicle damage. Compounding the problem, Hertz then profited from the repairs, overcharging customers by making them pay the full quote price when the company received discounts it did not pass onto the hirers.

Hertz Australia has signed a court enforceable undertaking with the ACCC to provide refunds and address the watchdog’s concerns, acknowledging that its conduct was likely to have contravened the Australian Consumer Law prohibitions on misleading or deceptive conduct and false or misleading representations.

ACCC Deputy Chair Dr Michael Schaper said rental companies needed to have robust compliance procedures to ensure they do not contravene the Australian Consumer Law by incorrectly charging customers.

“Vehicle rental companies must also ensure that they are transparent and accurate in communicating with their customers about the charges they are applying for vehicle rentals and repairs,” he said

Hertz has told the ACCC it will contact and refund customers who were charged for pre-existing damage or overcharged for vehicle repairs, and conduct thorough damage review processes prior to charging customers for suspected new vehicle damage to confirm that the damage is not pre-existing damage or existing “fair wear and tear”.

The company will also improve its damage recording procedures and appoint an independent external auditor to monitor compliance.

The ACCC’s investigations into the industry has seen it looking at issues such as misleading rental pricing and charging, and unfair contract terms.

The consumer watchdog has launched court action against Europcar Australia (CLA Trading Pty Ltd) over alleged unfair contract terms and misleading advertising of its “extra cover” products. The parties are awaiting judgment on the case.

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