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Budget Rent-A-Car Settles Charges Over Hidden Fee

Renters weren't told of fuel fee, FTC alleged

November 27, 2007

According to the FTC, Budget falsely claimed that renters who returned a car with a full gas tank would not incur any fuel charges.

The agency alleges that renters who drove fewer than 75 miles incurred a fuel charge whether or not they returned the car full.

The settlement bars Budget from misrepresenting any charge, fee, cost, or material term or condition related to renting a car, and requires the company to clearly and conspicuously disclose any fuel-related fee or requirement.

According to the FTC, Budget deceptively claimed that consumers who returned their cars with a full tank of gas would not be charged for fuel. Budget’s Web site noted that the price of gas was not included in the rental rate, but stated, “You will have the option to purchase a tank of gas at a discounted rate, or simply return the vehicle with a full tank of gas to avoid additional charges.”

Signs at the rental counter repeated the deceptive claim, stating, “If you have the time, and want to save on refueling charges, refill the car before returning it. No fuel charge will be added to your contract.”

But the FTC alleged that Budget charged a flat fee – initially $5.00 or $6.00 depending on location, and later $9.50 – to renters who drove fewer than 75 miles, even if they returned their cars with a full tank. Customers who refueled their rental cars could get the automatic charge reversed only if they presented a gas receipt.

But Budget did not adequately inform customers about this option, according to the FTC. In addition, until early 2006, unless they had a corporate account, renters were unable to have the fee reversed by the attendant on the return lot. Instead, they were required to present their gas receipt at the inside rental counter.

The agency alleges that Budget failed to adequately inform customers about the process for having the fee reversed.

The FTC charged that Budget’s fuel fee program was deceptive and violated federal law. Budget did not adequately disclose its billing practice and made deceptive claims about returning cars with a full tank of gas on its Web site, point of sale disclosures, and rental contracts.

The settlement bars misrepresentations about any charge, fee, cost or material term or condition related to renting a car from Budget. It also requires that Budget disclose any fuel-related charge, fee or cost and how consumers can avoid those charges, if they can. The settlement also contains bookkeeping and reporting requirements to allow the agency to monitor compliance with the order.

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