Are car rental companies double dipping on damage claims?

June 27, 2007

One of the most common complaints I get from car rental customers is that they’re being charged for damages that they weren’t responsible for. They wonder if the companies are double-dipping — charging multiple customers for the same repair — as at least one franchisee has admitted to doing. But proving that kind of behavior is difficult.

Not to Cynthia Plume, a reader who I advised on her recent damage-related grievance with Thrify.

When she picked up her rental car at the airport late at night in Sarasota, Fla., there was no apparent damage to the vehicle. “We drove it several miles to our home,” she says. “The next morning, as we walked into the garage to leave, we noticed that the front end of the car had been damaged.”

She called Thrifty to report the condition of the car, and was told not to worry about it. The damage was pre-existing, and a representative assured her that anyone reviewing the file would see the report and she wouldn’t be charged.

That didn’t happen. After she returned the car, she received a $700 bill for the dent.

She called me to find out what to do next. I urged her to send a cordial but firm email to Thrifty, asking to substantiate the charge with repair records.

Thrifty backed down almost immediately, sending her a letter that her case had been “closed.”

Plume phoned the company to find out what had happened. “A customer service representative looked up our reservation, and she could not explain it because the file did, in fact, show a damage report prior to our rental,” she says. “It also showed our phone call and the customer service rep’s notations related to the previous accident report.”

The Thrifty agent went on to say she had “no idea” why Plume received a claim.

“Strange, huh?” she adds. “Double dipping? Maybe. Bogus claim? For sure.”

If you suspect you’ve been the victim of a double-dipping scam, send me a note or leave your comments below.

20 comments

{ 20 comments… read them below or add one }

Jim McCann June 27, 2007 at 9:07 pm

Regarding overcharged at the time of rental car return…On a recent visit to Las Vegas, we rented a car from Alamo. When we paid the final bill, we were charged for a full tank of gas ($60.00 on their supposed fillup)even though we filled up 10 minutes from McCarren Airport. I wonder how many people who did not check their “last” bill have overpaid for a gas charge. Obviously, when the ignition is turned off the gauge who register empty. That was our case. After being delayed a half hour, the problem was finally rectifyed to our satisfaction. We never received an apology from anyone. That’s the last time we deal with Alamo.

Michelle June 28, 2007 at 4:40 am

well, its really annoying what had happened. In my case, before my friend parked his rented car on the parking lot of the mall, I’ve never seen any damages on its headlights. When we came back, I’ve noticed a damaged on it. I remember my brother’s car has just replaced new saab headlightsyesterday. Unfortunately, he’s been charged on it.

steven martine June 28, 2007 at 4:05 pm

on a recent trip to maui, I rented a min-van from alamo. backed into the side door of dollar rent a car. received a bill for $1,375.

and then when I looked at pictures..they were billing me for front fender, license plate broken and scrapes under the fron of the car.. when speaking to alamo, and dollar they both copped an attitude. but I persisted, then they relented and took off over $400.

this goes on all the time on the island of hawaii.. renters be aware.. the rental companies are not honest out there.

Ben July 4, 2007 at 10:06 am

I am a photojournalist, so this solution came easily to me. When I rent a car I do the following, and it only takes a few moments. Using a digital camera, it costs nothing. When the rental agent takes me to the car for a walk-around, I photograph the front of the rental office (to show location and company name), the agent standing in front of the car (showing license plate number), then I snap pictures of the car from all four sides and closeups of any existing damage. It takes only an extra minute. I download the images to a file on my computer and forget about it unless I have a dispute. It costs nothing because I do not print the photos until and unless I need them. The digital time and date stamp is automatic.

Sonja August 24, 2007 at 10:37 pm

I just rented a car from Enterprise Rent-A-Car in York, Pennsylvania. The car was brand new and the attendant distracted me, by showing me how to operate the vehicle (toyota hybrid). So, I don’t recall completely walking around the entire vehicle.

Upon returning the vehicle, yesterday, the attendant asked me to wait at the counter. Unbeknown to me he was out inspecting the car without me being present and then came back to inform me of the “discovered damage.”

To make matters worse, they had the audacity to charge my credit card for $500, my entire deductible without even giving me an estimate. I am not sure what the outcome will be, but I’m going to fight the charges to the end.

Philippe September 17, 2007 at 4:29 pm

In Maui, when returning a car to Alamo, I was told there would be a surcharge for removing excessive sand in the car (yes, excessive sand, try to avoid that in Maui !). When I asked what the surcharge would be, I was quoted an amount of $50.00
Luckily, I had time to spare before the flight, so I took the car out to a nearby gas station and spent $2.00 (and 5 minutes) to vacuum it. I brought it back and it passed the test.

How can Alamo justify a $ 50.00 charge ? Nice scam, but you lost an old client !!

Tom September 24, 2007 at 9:01 pm

I rented from Dollar Rent-A-Car at Houston Intercontinental Airport for 4 days in April, declining the LDW. I returned the car in perfect condition. Months later, I got a $750 bill for damage.

The bill included repair estimates and photos, including the license plate. The damage claim appears legitimate–I don’t doubt that someone damaged the vehicle at some time, it just wasn’t me. I just assumed that the car got damaged by an employee after I returned it. After some internet research, I now assume it is just a scam.

I now will be photographing all rent cars when I turn them in.

James McManus September 26, 2007 at 10:53 am

1) DELAY: We confirmed our reservation with Dollar Rent A Car TWICE before departure. After presenting our reservation and payment details at Dollar’s desk at San Francisco International Airport, we were forced to wait ONE HOUR AND FIFTEEN MINUTES before our vehicle was ready. Please note—this was not waiting in line to speak with a representative, this was AFTER a representative had confirmed our reservation and taken our credit card details. This after traveling for 6+ hours with two children, ages one and three years. As an explanation, the Dollar representative said the car was “being cleaned”. The representative offered us a different type of vehicle that did not suit our needs and we refused.

2) DAMAGE CLAIM: When I returned the vehicle several days later, a Dollar representative conducted an inspection and pointed out a mark on the rear driver side panel. I inspected the mark and told the Dollar representative that it was only a MARK—not a dent or a scratch—that could be cleaned. The Dollar representative did not indicate that the issue remained unresolved, nor did he tell me to expect to be contacted by Dollar regarding damage to the vehicle in the future. The representative did not request my signature or comments on any damage report. Neither did the representative take any photographs of the vehicle in my presence. Imagine my surprise when, on September 17, 2007 I received a letter from Dollar claiming damage totaling $431.00 with an attached “Accident/Damage/Incident Report” and a photo of the alleged “damage”. Under the section titled “Describe How Accident Happened” someone, presumably the Dollar representative who conducted the damage inspection, had written “REFUSE TO SIGN” (sic).

3) THOUGHTS: How extremely irritating that a) a family traveling long distance was forced to wait over an hour for a car that was reserved in advance; b) a Dollar representative would point out a dirt mark and try to pass it off as “damage”; c) a Dollar representative failed to communicate to the customer that he considered the matter unresolved and that the customer would likely be contacted by Dollar in the future; but instead led the customer to assume that the transaction was complete; d) a Dollar representative would indicate a customer had “refused to sign” a damage report when in fact such a request had never been made of the customer; d) Dollar would claim $431 to clean a dirt mark off the vehicle.
After receiving this letter, I conducted an Internet search using the words “rental car damage dispute”—please note that I did NOT include the word “Dollar” in the search. I was shocked to note that TWO OF THE TOP THREE search results returned were links to websites that detailed Dollar customer complaints regarding disputed damage claims. How interesting…
Initially, I conceived of this communication as having two separate, unrelated complaints: the one hour and fifteen minute wait, and the frivolous damage claim. However, after contacting a representative from my credit card company, it occurred to me that perhaps there was a connection. I asked the credit card company representative if he could provide advice for disputing a damage claim from a rental car vendor. He said, in short, that car rental companies’ business model is not only to make a margin on renting cars; the margin contribution also comes from selling insurance to customers. In addition, a percentage of fleet maintenance costs can be mitigated by claiming damages against customers who do not purchase rental agency insurance packages. He said that car rental companies routinely claim damages in the $300-$900 range from customers who do not purchase the car rental company’s insurance package, because most customers have personal car insurance, or a credit card company, that will cover such charges, up to a certain amount. In this way, the car rental company can pass on the bulk of maintenance costs to those customers (and the customers’ credit card and car insurance vendors) who do not purchase rental agency insurance packages.
If this is true, the motivation for Dollar managers to maximize the sale of insurance packages, and also to maximize damage claims against customers who do not purchase insurance packages, clearly exists. One way to increase the probability of being able to file a damage claim against a rental customer is to minimize how much time the customer spends inspecting the vehicle prior to exiting the rental facility—theoretically, that would make it possible for the rental agency to claim damages against a customer who did not, in fact, cause those damages. What types of customers are least likely to conduct a thorough investigation? High on that list would have to be parents with young children on a long trip…force that customer, likely already stressed and exhausted, to wait an additional one hour and fifteen minutes, and the amount of time he spends conducting a thorough inspection further decreases…

Ward October 18, 2007 at 6:04 pm

I recently rented a car from Budget and was not given the “walk around” when I picked up the car. The agent did not leave his seat in the office. When I returned the car 3 days later the receiving agent pointed out a big series of scratches on the right front end. I did not do any damage to the vehicle and assume it was damaged before I got the car. He told me not to worry about it and to write the above down on the accident claim form. Yesterday I received a bill for $1000 from Budget. They say that I am responsible, even though there was no paperwork showing that the car given to me was not already damaged. What do I do?!

cheryl October 29, 2007 at 6:41 pm

A few years ago I experienced Hertz trying to rip me off for gas even though I filled up prior to return. They’ll do anything to trick the customer, hoping you don’t notice. I haven’t rented a car since because I see they’ve changed their policies now and blame the customer for poor road conditions that can damage the car and make them responsible. The could make more money this way then for the car rental so it makes much sense that they encourage this activity. I believe they get a huge discount on the cars they buy and then sell.

zmy November 9, 2007 at 12:56 am

On 9/7/07 I rented a car from Dollar Rent-A-Car at the Fort Lauderdale Airport. I used the car until 9/10/07 and returned it with just over 64 miles driven sustaining absolutely no damages during my rental period. Dollar recently made a claim against me for damages incurred which has no merit at all. I believe the claim is a hoax and is perhaps insurance fraud for the following reasons:

1. I have the check out slip that I filled out when I rented the car.
All of the damage that is stated in the incident report is on the check out slip that I filled out on the date I rented the car — BEFORE I EVEN GOT IN THE CAR. Their claim does not include this piece of documentation. They are assuming that I don’t have this piece of paper or perhaps I would just give the information over to my
insurance company or credit card. Note: the slip that I filled out with the damages upon renting the car says it is a “check-in” slip, even though technically I was checking the car out; regardless, this is the slip that shows what damages were on the car
before I drove it off Dollar’s lot. Oddly enough, this slip does not have Dollar’s logo on it and was not signed by anyone.

2. The damage incident report says the “customer say he pick up the car with the damage.” Aside from being a poorly worded sentence, I wonder why Dollar Rent A Car didn’t check out the check out slip from the date I picked up the car to either CONFIRM OR DISCONFIRM if, in fact, the damages were sustained before I rented the car. More importantly, I never said anything to the person I was returning the car to except perhaps “thank you.” I absolutely said nothing about the damage when I returned the car. I returned it and figured that the documentation that I filled out before leaving the Dollar lot the first moment makes the scratches a moot issue. I said nothing to the attendant of that sort, so the statement that I said anything about damage is a lie, even though in fact, I did pick up the car with the damage.

2. The mileage on the auto repair estimate Dollar sent me is over 325 miles higher than the milage on the car when I turned it back in. Somewhere between the 10th, when I rented the car, and the 11th, when the damage was assessed, someone drove the car well over 300 miles. Yahoo maps puts the address written on the damage assessment only 2.8 miles from the FLL airport where I rented the car. Why does the car have approximately 6 hours of driving on it from the time I returned it, to the time it went to the damage assessment unit, the very next day?

3. One of the calls I got from the claims office to my phone asked for someone else, so I got to thinking. They are calling someone else, but with my telephone number. Perhaps a mistake, but perhaps they are calling multiple people for the same claim. What are the chances of two claims, two different people, and the same car? I suspect the company is
submitting claims for the same damages, on the same car, to different people and never repairing the damage. AND HERE IS WHY: The paperwork given to me is only for an estimate of the repair, NOT a bill for the actual repair. So there is no proof that they aren’t submitting this to multiple people for the same damages and never actually fixing the car. Why are they sending me an estimate of the repairs? Why don’t they just send me what they paid for the repairs?

4. I have the paperwork I filled out on the date I picked up the
car that shows the mileage, the damages clearly documented, etc. The company conveniently did not include this in its recent letter asking me for money — over $500.

5. The claims office is totally unresponsive and they insist only on returning my calls on the number that was on the original paperwork. I have left several messages with Dollar saying that this is no longer my telephone number. My experience has shown that lack of professionalism and unresponsiveness go hand-in-hand with poor business ethics. I have called them 8 to 9 times per day and they never pick up and I have left many messages and they have yet to return my call.

I did get through with them once and got in touch with a “Christine”, who had written me the letters. The moment I got on, I got another call and I apologized and told her to hold on a moment and I’ll get the other call off the line. About 10 seconds into the call I switched into, I heard her hang up. I got off the phone with the caller (I was getting my floors refinished that day and I couldn’t afford to at least take his call momentarily) and I called back less than a minute later. No answer. I called Christine back about 4 times that hour, no answer. I have left numerous messages and no one has returned my calls; although, I noticed that they called back on my old telephone number from the contract.

I believe that they really do not want to talk to me but would prefer that the claim just goes to a collection agency or that I get tired of fighting and just pay up.

My hunch is that rental car franchises make claims against people who opt not to take insurance because:

1. The rental company can make multiple claims on the same incident, only sending an “estimate of damages” and not a receipt for repairs actually completed.

2. An insurance company would ask for a receipt of actual repairs and perhaps the paperwork for the previous 3 rentals for that particular car. This would reveal that the car perhaps already had damage. An insurance company would probably also send out an adjuster, who might argue (and would likely argue) that the damage claims are inflated.

3. People would prefer to pay out of pocket than bring in their insurance company (some people’s auto insurance for their car at home covers damages to rental cars). For someone to bring in their insurance company for $500 to $1000 and get hit with higher premiums for the next 3 years seems unlikely. Also, don’t forget that most people’s auto insurance has a deductible which is probably $500 to $1000.

I am sharing my experience so that people can be on the lookout for this.

Kenya Car rental April 1, 2008 at 7:25 am

wow the comments speak for themselves. I wouldn’t say interesting read because some of the comments are of concern.

Max April 24, 2008 at 12:50 pm

My situation is very similar to what others have described about being charged by Budget Rental car for damages that I did not do. I recvd a $500 charge to my credit card which I had removed against a total damage bill of $750. Budget sent my account to collections which is currently hurting my credit rating. I am curious if these occurences that seem to be widespread should trigger a class action lawsuit against Budget and others. Any comments would be welcome.

Lois Gilmore May 12, 2008 at 7:48 pm

Wednesday – I took my new Cadillac CTS to the dealership where I purchased it due to a recent recall onstar informed me of. I also had concern about the brakes on my right front wheel asting up while turning into my assigned parking space at work. The dealership has an Enterprise Car Rental office inside its place of business, so they issued me a new rental car (less than a 1/4 tank of gas) as a replacement while mine was being serviced. Of course the service work was covered under warranty & recall and they were to be billed for the rental car as well, but I gave a credit card for security.

Thursday – I received a call my car was ready so I went to pick it up and return the rental car. Got there only to find the garage closed but just so happen a service manager was in the sales lobby and he helped me… Bummer my brake still isn’t right my car hasn’t been fixed.

Friday – 5:20 I got another call saying my car was for sure ready this time but they closed at 6:00pm. Being in the metro area there was no way I could get there within time allowed so I told them I would be in on Saturday evening.

Saturday – I was called out to work and so I gave the dealership the courtesy of a call and said since my schedule and theirs has not allowed us to meet these past couple of days, please set my car out and lock the keys inside it.. Once I got off work I drove to the dealership and parked the car under a lamp post and dropped the keys in the night depository box at the service department and although certain I did a walk around to make sure I had returned the rental car in the same condition as I had gotten it. I got into my car and drove home glad to have my Cadillac back !!!

Monday – I go to work as normal, when I get home (7:30pm) I have a couple of messages on the answering machine.

1st – This is XXXXX with Enterprise we see that you returned the car but we can’t find the keys…. Please call us as soon as you get this message,

2nd – Ms G. this is XXXXX again with Enterprise and we have found the keys but I am calling to inform you there is damage on the driver’s door of the car. Please call us immediately.

Of course I called immediately. No one there…. I am upset now, I know damn good and well there was no damage to the car. I was very careful while driving this strange car to begin with and besides that I would never drive my Cadillac any other way. My assigned parking spot at work is the last spot on the row I requested it this way so I wouldn’t be near anyone because of door dings that can occur and the lady next to my spot was in the hospital all week with bronchitis besides she would park on the passenger side of me if there.

They have now charged my card 1000.00 for damages, my credit card offers me free rental car insurance coverage but since the dealership was paying for the rental I am not eligible for the coverage (IF THERE REALLY IS ANY DAMAGE).

Of course I have not seen this damage they are claiming. How can I dispute this and prove I returned this car in the new condition I accepted it in after the fact? The rental car company has taken the car to their garage offsite according to the dealership manager.

All comments and advise is welcomed and appreciated…

Thank you,
Lois

Damon Reno July 21, 2008 at 8:23 pm

I recently rented from National car rental in Little Rock, Arkansas. I got the vehicle key from the desk and proceeded to the parking garage to get the vehicle. I was not given a form or even informed that I should document the condition of the vehicle before I left. I noticed substantial scratches and dings all over the vehicle, but just assumed it was ok because it was there before I rented the vehicle. I used the vehicle for one evening, brought it back the next morning, and departed on my flight. I got a call today, which is about one month later saying that I am responsible for $1300 in scratch and dent repair for the vehicle. This is totally bogus. I inquired if they had any before or after photos of the vehicle, or if I could see the damage claim records of the previous renter of the vehicle. They became beligerant and told me that the claim information was in the mail to me and that if I didn’t pay, it would be reported on my credit. All of this just happened, so I am not done with them yet. I talked to a lawyer friend of mine, and he said that he rented a vehicle from Alamo car rental a couple of months ago, and it was the same procedure. He got in his car and noticed in the fine print paper work a form that he was suppose to fill out documenting the condition of the vehicle and turn it in before he left. He was never told about it by the person that rented him the car. He noticed the form, filled it out, and turned it in. I was not so lucky.

amurgrades August 16, 2008 at 9:05 am

Clearly. Thanks!
:))

DK November 17, 2008 at 9:46 pm

Similar to Damon’s experience – I just found out Alamo is trying to charge me close to $1,200 for damage to car I rented in September. I have been in an Alamo rental car since Aug 2. The car I rented had a chip in the windshield, large dent/stratches, and a license plate falling off I kept having to fix. However, I had been driving a car with low MPG and requested an exchange for a more fuel efficient car and I was happy to get the car. I just assumed the condition of the vehicle was known. This was a very small Alamo location. I had the car for a while and do not believe any damage occurred while I had the car. I find it even more suspicious that they didn’t mention any damage when I turned the car in. How can they wait days/weeks later to make a damage accusation. How do I know who has had the car since then. In fact, when I was exchanging a car at the same Alamo location, I observed a worker pulling the floor mats out of the front of a returned car and beating them on the side of the car to knock the dust/dirt out. I mean beating the mat against the car HARD. I wonder who got charged from scratches?

yc November 18, 2008 at 12:54 pm

Avis — I am being charged 1100 for a car part, left front suspension. They sent pictures of the part. I’m not understanding how a defective part (if it is/was defective) constitutes damages! Anyone have any ideas? Thanks.

Tom May 5, 2009 at 1:57 pm

I posted about fraud from Dollar above on September 24th, 2007.

My follow up: I continued to receive some letters and phone calls from Dollar requesting that I pay for the damage. Each time I categorically denied that I committed any damage and that I would pay nothing. I sent all letters via registered mail. One caller raised her voice and threatened to sick “collections” on me. No matter, I calmly denied everything. After about 6 months, it stopped. If a collection agency is involved, they haven’t tried to contact me. And even if they did, my response would be the same.

Jeanette May 26, 2009 at 6:02 pm

We rented a car in Germany from Avis. We paid for the vehicle before we arrived. My husband signed what he thought was the document for us to take the car. Now Avis says that we agreed to their insurance- which we clearly did not in Canada and verbally at the Munich airport.
Why is our word worth nothing? The credit card company will not back us up either!!!!!!!!!!
We feel really ripped off!!!!!!!!!!Anything we can do short of hiring a lawyer?
The insurance was much more than the rental of the car!!!
Jeanette

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