Price-gouging by Payless Car Rental after fraud causes credit card cancellation

By | September 20th, 2016

It’s bad enough that Eric Loch was the victim of credit card fraud. But when he found himself forced to pay more than three times as much to rent a car as he had already prepaid because his car rental agency wouldn’t accept his new card, it’s infuriating — and just plain wrong.

Car rental companies, particularly ones like Payless Car Rental that offer “lower” rates, are notorious for looking for any excuse to charge customers in order to pad their bottom lines. But car rental companies have no business charging customers three times as much as they prepaid for the same car. That’s price-gouging, and it’s terrible customer service.

Loch reserved a car from Payless Car Rental, a subsidiary of Avis, at one of its Orlando, Florida locations. He prepaid for the reservation using his Bank of America Visa card. But a few weeks before he was scheduled to pick up the car, Loch discovered a fraud issue on his Bank of America Visa account. He notified Bank of America, which issued Loch a new card and instructed him to destroy the previous card. In the meantime, Loch had made no other changes to his account.

When Loch arrived at the Orlando Payless facility to pick up the car, the Payless agent on duty told Loch that Payless could not honor Loch’s prepaid rate of $148 per day because the bank had changed the credit card Loch used to make the reservation. The agent said that Loch would have to pay $475 per day for that same car.

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Loch showed the agent his identification and his replacement Bank of America Visa card. The agent told Loch that he could wait for the manager, who was due to arrive in 90 minutes. As Loch was already delayed for an appointment in Sarasota, he could not wait. He had to take the car at the rate of $475 per day.

When Loch complained to Payless, its agent merely responded that “Unfortunately we are unable to match the rate to your original reservation; keep in mind rates can change at any time. The prepaid was refunded back to your account.”

While Loch was no doubt relieved to have his prepayment refunded, that amount was what Payless should have honored in the first place. He contacted our advocates to ask for help in securing a refund of the price differential between the $148 daily prepaid rate and the $475 daily rate he was forced to pay.

Unfortunately for Loch, Payless’s “Pay Now Terms & Conditions,” which he would have used to make the prepayment, indicate that

Your credit or debit card will be charged upon reservation confirmation. Method of prepayment toward your rental may not be changed after confirmation.

The same credit or debit card used to complete an online prepaid reservation must be presented at the rental pick-up counter as a form of identification. At time of rental pick-up, the last name on all rental credentials (license and credit or debit card) must match the last name on the reservation. If the last names do not match, for security purposes the prepaid reservation will not be honored.

Your quoted rental rate is based on the exact parameters (locations, dated, etc.) of your particular rental – changing your confirmed reservation parameters could result in a different rate.

Payless doesn’t care about the fraud or that there were no other changes to Loch’s credit card — only that the card he showed its agent didn’t match the one he made the reservation with.

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But even though Payless states directly that it doesn’t have to honor the prepaid rate when the confirmed reservation parameters don’t match, the only change to the parameters in Loch’s case was the credit card number — which was changed because of fraud. The car he was renting didn’t change — so charging him a different rate doesn’t make sense.

Loch and his wife, Anne, contacted our advocacy team for assistance. (Company contacts for Payless can be found on our website.)

Our advocates contacted Payless on Loch’s behalf, who explained that the new rate also included a charge for an upgraded vehicle which Loch had neither requested nor wanted.

Anne Loch asked how the problem could have been avoided, but was told by Payless’s agent that her husband could have shown the closed card at the time of rental and paid with the new card. (Since he’d destroyed the old card on orders from Bank of America, he couldn’t have done this.) The Lochs also asked whether they could have alerted Payless to the issue prior to the date Loch picked up the car, but Payless’s agent explained that the car would have had to be rebooked under the new card and the daily rate would have changed anyway. Why the daily rate would have changed is not clear to us or to the Lochs.

Sadly for Payless, they probably lost a loyal customer by adding an unrequested upgrade to Loch’s rental car reservation and then engaging in price-gouging. But Payless did agree to refund the Lochs the price differential for the daily rates that Loch was forced to pay in Orlando.

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  • sirwired

    I’m trying to come up with a reason for this policy, and I’m baffled. The only thing I can come up with is that their computer system is too stupid to have one card pay for the rental, and have a second number on file for any post-rental charges, so changing the credit card means cancelling the existing reservation and making a new one (which will be charged at walk-up rates.) That does seem to be something a manager would be needed to override, but it shouldn’t have been that much work to get this cleared up later.

  • Jeff W.

    I’ve seen rules that prohibit the changing of credit cards. Typically as some cards have insurance benefits and others do not.

    But I have to say, the price gouging started with the initial reservation. Did they rent a flying car? I really have to believe there are cheaper rates in Orlando — tourist capital of the world — than $148 a day.

    But I am glad it worked out. With credit card fraud and breaches becoming more prevalent, a better way has to be there to protect everyone.

  • LDVinVA

    I too wondered about the $148/day. I remember when you could rent a car for a week in Orlando for less than that!

  • MarkKelling

    The rules prohibiting changing credit cards for insurance purposes are rules from the credit card side, not the rental car company side. If you book with a card that offers insurance then change to a card that has lower interest rates or better benefits, the original card will not cover your insurance issues if you have some. Most rental car companies I deal with don’t care how you pay for the car as long as they get paid. But then I also don’t do the prepaid, the price difference is not enough to do away with the flexibility of just not showing up when something changes in my travel plans.

    I don’t know what or when the rental was, but that rate is ridiculous even for the original pre paid booking. And the new price is complete bull. I just looked and I can get a basic car at the Payless location at the Orlando airport for less than $20 per day booking a couple weeks out. Even if I want a car today, they quote the $148 per day he was quoted for a reservation made much earlier in advance.

  • fairmont1955

    My takeaway here is to never rent a car from Payless.

  • ArizonaRoadWarrior

    The price-gouging in this story is ridiculous! Was he renting a high end vehicle such as a Jaguar or Mercedes? At $ 148 per day that is high but at $ 475 per day…that is a monthly car payment or lease payment for $ 40,000 to $ 60,000 vehicle.

    Unless he was renting some special vehicle, I would have walk off the rental lot and go to another rental company.

  • From the point of view of a business, a Visa is a Visa. I have never heard of differential policy for sale or rental of anything based on which Visa a customer presents. In fact, I would bet that non-discrimination of this sort is written into the Visa contract.

    Either there is missing information here or Payless is a company we just have to stay away from.

  • ArizonaRoadWarrior

    It could be credit card fraud.

  • disqus_00YDCZxqDV

    every car I rent no matter what firm, they tell you to present the same card used to make the reservation on line, at the desk. I often wondered what would happen if I got a replacement card between the reservation and the pickup – now I know.

  • ArizonaRoadWarrior

    It could be a luxury vehicle.

  • sirwired

    Seems kind of bass-ackwards. I mean, if somebody’s used a stolen credit card number to pay for a rental, the proverbial gig is going to be up when the legit one is presented at the counter. Makes it kind of easy to track down the crook when you have a driver’s license and credit card.

    EDIT: Maybe requiring the card converts the Card-Not-Present transaction into a Card-Present one, which is both a cheaper transaction for the provider, and shifts fraud liability (however unlikely) away from the business.

  • ArizonaRoadWarrior

    The take away is if your credit card is replaced…start to call the companies that you have monthly automatic payments; travel reservations; etc.

  • cscasi

    I agree. However, we do not know what type of vehicle he rented. Perhaps he got one of those high end “expensive” types and they certainly can cost that much a day or more. But, what he rented what not a part of the story.

  • sirwired

    It’s not unusual at all for pre-paid things to require presenting the paying credit card. (For instance, in-store pickup at a retail store.)

    I can totally understand why they ASK for the original card, but they should have been able to re-price the “new” booking to match the old one.

  • RightNow9435

    I would have done the same. For that kind of difference ($327 per day), he definitely should have gone to another rental that time.

  • Pegtoo

    Two times I’ve been caught in that situation: once purchased Bruce Springsteen tickets, needed to show card used for payment to get in. Of course, I remembered that approx. 30 seconds AFTER cutting the “bad” card in two. Taped the pieces together and showed the guy at the gate. It was a great concert.

    Second time I had returns at a store, and they needed to run the card used for purchase. Worried I’d have to settle for store credit. I gave them the new card (new number) and it went fine. VISA links the old/new account… so no problem.

    Now I keep the old card around for a while, in case something comes up.

  • Chris Johnson

    $475 per day? In Orlando? From Payless? Are you KIDDING me? Even $148 per day seems on the high side. There must have been a HUGE convention in town or something. Or he rented a bigger, higher end car, but because it was just him traveling and being Payless, I doubt it. I’ve paid some high car rental charges, but $ 148 per day is way up there for me even with taxes and other fees factored in.

  • Altosk

    Payless. Careless. Yeah, not doing business with this shady operation any time soon.

  • Tricia K

    I would never have agreed to the original rental rate of $148 a day, let alone the ridiculous rate they felt stuck with. For anyone else that finds themselves in this situation (or something similar), call around to other rental companies and explain the situation and see what they can do as far as a rate is concerned. I realize that isn’t always an option in a small town, but it certainly is in Orlando. We reserved a mini van to drive our daughter to college from Memphis to Delaware, Ohio. We went to pick it up and they didn’t have a minivan available and tried to rent us a car that wouldn’t work, and for the same rate. We called a few rental agencies and we found one that honored gave us the minivan and even gave us a better rate. I’m not big on pre-paying for car rentals either, unless it is fully refundable. I had to concede to my policy and pre-pay in Philaldephia in June because every other place was three times as much as pre-paying.

  • Tricia K

    I was thinking that too. It could be a luxury car, but that’s not likely from Payless.

  • Bill___A

    It was the same account even if it wasn’t the same card number. Companies that don’t have a procedure for working with replacement cards baffle me. It also baffles me that they are even allowed to take credit cards if they do this. $475 a day for a car is pretty outrageous. The original one he reserved should have been available. Even the rate for that seemed high. This whole thing is wrong on so many levels.
    I was going to say that I would have checked with Payless about the card change issue before arriving at the counter, but realistically it is unlikely I would ever deal with an outfit like that.

  • Bill___A

    Except that it wasn’t.

  • ChelseaGirl

    Wow. If you have a rule about no change in the form of payment, an exception needs to be made if someone’s card is stolen. They are penalizing customers for having their card stolen! And the rate they charged him is outrageous. I won’t be using Payless.

  • Michael__K

    Has the customer complained to their credit card company? I wouldn’t be surprised if the merchant card agreement (which would trump Payless’s arbitrary silly terms) prohibits this type of discrimination against customers whose cards are re-issued for fraud protection.

  • Michael__K

    Check their rates as of today for any rentals between Dec 18 & Dec 29 2016 [starting from $179.99/day before taxes…]

    If this was during a similar major holiday / peak period, it’s possible the competition was sold out.

  • Rebecca

    That’s what I was thinking. The chargeback rules change, and that’s their reasoning. Any chargeback to the original prepaid rental charge would have to be initiated 60 days from the date of the original reservation. (There are ways around this and disputing a ruling in favor of the merchant is possible, but most people don’t know this, and it isn’t something the credit card company is necessarily going to offer up.) Many visitors to Orlando probably book more than 60 days out. Depending on how they run the charge and authorization, they may be protecting themselves from chargebacks initiated on any additional amount charged at checkin/checkout by attaching it to the original reservation date. A new card means the clock starts over when the car is picked up.

  • Rebecca

    I’m thinking it was maybe a day on a holiday weekend and probably an SUV or something? Fourth of July was a Monday this year, and maybe he needed it the Friday or Saturday before? That’s the most recent big holiday and I can’t think of any other reason.

  • mythsayer

    I was in Orlando and Jacksonville in May. I picked up a car at the Orlando AIRPORT (more expensive usually than off site location) and did a ONE WAY rental dropping off in Jacksonville. I had the car from May 5 through May 13 (so 9 days). It only cost me $300.

    So yeah…this rate is insane.

  • joycexyz

    How absolutely ridiculous! I can’t think of any sane reason for this policy, other than to play “gotcha” with the renters. Had Mr. Loch not been in a hurry, a call to the credit card company might have helped, but maybe not. Those agents have their feet dug in deep.

  • joycexyz

    For that price, it should be a Rolls with a chauffeur.

  • greg watson

    Allthough I usually feel this question is not on point, I am really curious. “What type of vehicle was he renting? My last experience was a couple of years ago, when we rented a new Prius for a week at a rate of ~$30 / day in Tucson in their off season. We carried an insurance coverage card from our insurer at
    home & didn’t pay any additional fees. What vehicles are worth $148 or $475 per day. Ferrari, Bentley,………….what? My cat & I are dying to know ! More info please.

  • Annie M

    Just when you think you’ve heard every dumb rule a company could have, this comes along. I guess I can understand the small risk of fraud that could happen by not having the exact same card number that was used to book (and I really had to stretch to think) but he had a new card and his ID and a legitimate excuse as to why the card wasn’t the same.

    I beginning to think any company that starts with the words Payless or Cheapo or LowCost or something similar should be steered away from.

    I never would have read those terms and conditions when I booked and I also would not have held on to card that I knew fraud was done on just to rent a car.


  • Annie M

    I think Michael K has made a god point. I think the credit card company should be told about this.

  • greg watson


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