Car Rental Companies Becoming More Aggressive in Pursuing Damage Claims

Many rental car customers have lately complained the company charged them for alleged damage to the vehicle long after it was turned in. The case recounted by Graciela, of Winter Haven, Fla., is one of the stranger episodes.

Graciela says her son rented a small car from Budget in Roanoke, Va., back in August, returning it on August 8. He used a credit card that was in his name but on which his mother was a co-signer. His parents' name did not appear anywhere on the rental agreement.

“When the car was returned to Budget, I was told by my son that the car was checked by company's personnel and nothing wrong was found after the inspection,” Graciela told ConsumerAffairs.com. “During their three days rental my son and his girlfriend sat in the front seats and never used the rear seats.”

Seat belts

But just last week, Graciela says she received a threatening letter from a claims company, Khoury Alternative Claims, representing Budget Rent A Car. She said the letter included a bill for damage to the rear seat belts, totalling $1,114.73.

“The bill reads: Physical Damage 534.77 -- Anticipated loss of use (4 days @ 119.99) 479.96 and administrative fees of 100.00 total 1,114.73,” she said. “The total amount of the rental was less than $80.00 for a three-day rental but they charged on their bill $479.96 for anticipated loss of use of 4 days or 119.99 per day.”

Increasingly, consumers are vulnerable to these discovered-after-the-fact damage claims if they do not accept the rental car companies' expensive insurance coverage. Even if their own insurance policy covers them, the fine print on the rental agreements now say they will be liable, not only for the damage to the car but for the loss of its use while it is being repaired and the loss of its value because of the damage.

What to do

Graciela and others who run into this situation should dispute the charge if they are convinced it's unjustified. Graciela should send a letter, perferably via certified mail, to Khoury at this address:

Randy Harris, President

Khoury Alternative Claims

140 Heimer #740
San Antonio, TX 78232

In the letter, Graciela should explain that her son did not use the back seat and could not have damaged the seatbelts (assuming this is true) and, further, that absent any evidence to the contrary, she disputes the charge and will take necessary action if Khoury continues to pursue its collection efforts.

Graciela should be certain to keep a copy of the letter and she should refuse to discuss the situation by telephone.  If these efforts are unsuccessful she may need to consult an attorney.

Graciela's case is far from unusual.  We receive complaints similar to this almost every day.  The lesson to consumers is to never use an after-hours drop-off and to turn in rental cars only when the rental office is open.  

If time permits, ask the check-in attendant to walk around the car with you and take note of any visible damage.  If there is none, make a note to that effect on the receipt, initial and date it and note the attendant's name or employee number.  Be nice about it; politeness pays.  Chances are the attendant won't agree to sign it but you will still have your notation that can be used as evidence in disputes of this kind.  

About Khoury

Khoury Alternative Claims is just what its name implies -- an alternative way for car rental companies to pursue claims.  It is basically a collection agency that specializes in hounding customers for damage that allegedly occurred while a rental car was in their possession.

Like most collection agency, Khoury works on contingency, meaning that it gets a percentage of every successful collection.  If it doesn't collect, it doesn't get paid.  

Consumers should vigorously protest any incorrect or excessive claim but should also remember that, legally, they are responsible for all damage to a rental car while it is in their possession.  If a rental car gets dinged while parked and unattended, it's the renter's responsibility. 

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Truman Lewis assisted in reporting this story.