Alameda DA Announces Consumer Protection Settlement With Rental Car Companies

Alameda County District Attorney Nancy E. O’Malley announced today that her office, along with the California Attorney General and the District Attorney of San Mateo County, have settled a consumer protection action against E-Z Rent-a-Car LLC (“E-Z”) and Advantage OpCo LLC (“Advantage”), along with another related entity. The civil action was filed in Alameda County Superior Court. E-Z and Advantage are in the business of renting automobiles to the public. They operate many locations in California, including at various airports. The companies merged together in 2015.

Customers sometimes have accidents or cause other damage to the cars they rent. Car rental companies, in turn, may be able to work out discounted rates at auto body shops used to repair their cars. California laws prohibit a rental car company from making a claim against the renter that is more than the actual cost of repair, including any discounts and price reductions the company receives. In other words, the law requires rental companies to pass along discounts they receive.

The complaint alleges that the companies violated these laws, among other things. It alleges that the companies frequently billed renters based on third-party repair estimates that were higher than the actual cost of repair and failed to pass along the discounts they received.

“We all know how frustrating it is to accidentally damage a rental car. If you happen to do so, you should not be charged an excessive amount to repair the car or need to worry about whether the cost of repair work is being used to generate revenue. My office is dedicated to protecting consumers from practices of this kind,” says Alameda County DA O’Malley. “We are committed to seeing all of California’s consumer protection laws enforced.”

The practices “caused real economic harm to California consumers, who naturally assumed that the repair bills they received were accurate,” said Attorney General Xavier Becerra. “This settlement ensures immediate relief for hundreds of Californians, and sends a strong message to companies to abide by the law.”

“California law protects consumers from being overcharged for rental car damage by requiring rental companies to pass along discounts on damage repair to the renter. My office is committed to working with my fellow District Attorneys and the California Attorney General to enforce these laws,” said San Mateo County District Attorney Steve Wagstaffe.

The complaint also alleges that these practices started with E-Z and were incorporated into Advantage following the merger between the two companies in June 2015. After being contacted by District Attorney O’Malley, the companies took steps to change their practices and come into compliance with California law.

The judgment includes an injunction to prevent further violations of law. The companies also agreed to stop efforts to collect certain unpaid claims from consumers and agreed to pay $1,000,000 in restitution. About half of that amount will be distributed by the companies as direct refunds. The remainder will be distributed by the People as set forth in the judgment.

Without admitting liability, the companies also agreed to pay $3.3 million in civil penalties and $300,000 to reimburse the costs of investigation. The companies cooperated in the investigation.

Media Contacts:

For District Attorney O’Malley: Assistant District Attorney Matthew Beltramo (510) 272-6222

Posted on Apr 18, 2019