Former customers sue Hertz over claims of false arrests

Photo (c) boonchai wedmakawand - Getty Images

The suit says the company unlawfully charged plaintiffs with car theft

Two hundred thirty former Hertz customers have signed onto a lawsuit against the rental car giant, claiming they were unlawfully arrested because Hertz accused them of stealing their rental car instead of turning it in.

Francis Alexander Malofiy, the Pennsylvania-based lead attorney for the plaintiffs, says the former customers have faced prosecution in some cases that required them to hire legal counsel.

It turns out Hertz is targeting more than just a few of its customers. Recently unsealed court records reveal that Hertz files 3,365 police reports each year that claim customers have “stolen” its cars.

Internal issues

Malofiy told ConsumerAffairs that part of the issue stems from the way Hertz controls its inventory and how the company processes debit cards.

The legal team for the plaintiffs says many of the alleged thefts are actually sloppy bookkeeping. They say a customer may call Hertz and ask to extend the rental agreement for a few more days, resulting in a temporary hold on the customer’s payment card.

But if the hold fails to go through for one reason or another, Hertz reports the car as “stolen by conversion,” a term that applies when someone is legally using personal property or funds and then takes control of the property in a way that violates an original agreement.

The Philadelphia Inquirer quotes a Hertz spokesperson as saying that the company does not withdraw the theft report to law enforcement, even when the customer eventually pays for the rental and returns the car.

Hertz’s response

In one widely reported instance, a former Hertz customer applying for a job at her local sheriff's office was handcuffed and taken into custody when her background check revealed the arrest warrant triggered by Hertz’s theft report.

In a statement to USA Today, Hertz said it “cares deeply” about its customers and successfully provides rental cars to millions of consumers, However, it stopped short of directly addressing the arrests.

"Unfortunately, in the legal matters being discussed, the attorneys have a track record of making baseless claims that blatantly misrepresent the facts," the company stated.

Hertz also claims that most of the customers involved in the suits failed to return their cars for "weeks past their due date," violating their rental agreements.

The Bankruptcy Court recently ruled that some of the cases can move forward. Malofiy says the 230 former Hertz customers he represents are the “tip of the iceberg,” saying there are likely thousands more who have faced arrest and even prosecution.

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