Can I fix this Avis “fantasy” rental charge?

Marci Scheuer/Shutterstock
Marci Scheuer/Shutterstock
Harry Good recently prepaid for his rental car through a Swiss company called HolidayCars, which makes sense, since Good is an American expatriate who lives in Switzerland.

But what happened next doesn’t make any sense. When he picked up his car from Avis in Phoenix, where he planned to rent it for three months, all seemed well. Then, a few weeks later and without any warning, he found a $6,742 charge, in addition to the $3,711 he’d already paid HolidayCars.

Elliott Advocacy is underwritten by Trawick International. Trawick International offers a variety of international travel insurance, trip cancellation/interruption, adventure travel and student insurance plans. We offer 24/7 travel assistance to travelers domestically and internationally. We continue to research ground-breaking products and ideas which meet the needs of travelers everywhere. No matter what type of Travel Insurance product you need, we have the perfect travel insurance policy for you! Visit Trawick International to learn more.

Not good.

“The $6742 is a fantasy number,” he says. “I have written to the Avis airport manager in Phoenix, but she hides behind the Avis legal department and has no answers. Phone calls do not get returned.”

Here’s what happened: HolidayCars went bankrupt late last year, taking his $3,711 rental fee with it. It appears Avis realized at some point during his rental that it wasn’t getting paid by HolidayCars, and charged him a same-day rate for three months, which came to $6,742.

“Can Avis charge my credit card without prior consent for items that they acknowledge I have already paid?” he wonders.

Actually, Avis can do pretty much anything it wants with Good’s card, as long as it has the paperwork.

I advised Good to try two things: First, to dispute the HolidayCars charge on his credit card; and second, to speak with Avis about the arbitrary “walk-up” rate his card was charged for his rental without his consent.

It didn’t go well. His credit card company sided with Avis in the dispute, finding that both charges were valid, and Avis continued to insist that the charges were right, even after I asked about his case.

Here’s the official response from his car rental company.

At Avis any difficulties or problems encountered by a customer are a concern to us, and we apologize most sincerely for any inconvenience you may have been caused. In researching this inquiry the following information was found:

HolidayCars filed bankruptcy in December 2012 and this account was put on risk in our system as of November 28, 2012 (which is why the first month’s rental charge was accepted for payment and not the subsequent months. Therefore, because of the bankruptcy, we are unable to secure our payment from HolidayCar; this is why we applied the subsequent months directly to your Visa account for the cost.

We wish you success in your efforts to recover the money you paid this organization and trust you understand our position. Mr. Good, we can only recommend that you contact a consumer advocacy organization, or perhaps if you purchased a travelers insurance that you can file a claim which can aid you in recovering what was prepaid.

Although we realize that we cannot make up for a disappointing experience such as this, Mr. Good, we do appreciate the opportunity to address this inquiry. Only by being made aware of a problem can we address it and offer the high quality of service that Avis customers expect and deserve.

Love the part about the “consumer advocacy” organization. I love you too, Avis.

The letter answers some of Good’s questions, but not all of them. Why does Avis feel it can charge him the highest possible rate for his car? Would it consider lowering his bill to a negotiated, pre-paid rate, given his circumstances?

“I am at a loss on how to proceed,” he says. “Should I contact a lawyer knowledgeable with this issue? Or do you know of a way of resolving the issue without a lawyer? And, as a last resort, what happens if I refuse to pay something I have already paid?”

I think Good deserves better than to have to pay for two rentals. While I totally understand Avis’ position, I think it’s failing to see the big picture.

At the same time, Good’s credit card company is correct. Both of these charges are technically right. But does anyone really think he should pay $10,453 for his rental car?

Should I mediate Harry Good's case?

View Results

Loading ... Loading ...

Update (10:20 a.m.): Via Facebook, Avis has told me this customer “is being taken care of” and that there’s no need to get involved. I’m going to ask Good for an update, and will have more details soon.

93 thoughts on “Can I fix this Avis “fantasy” rental charge?

  1. In this case, the credit card company is at least as much at fault, in my view. He was double-billed by the credit card company, as long as he has paperwork showing the rate he contracted for.

    He probably should get legal advice on the legality of the charges, and in particular about the limits of claims when he has a contract with Party A that goes bankrupt, as well as the limits of the contract terms with that party and any third parties in the transaction. If all else fails, he should go to small claims court.

    1. I think there are a couple of problems with disputing the card. First, it appears he’s a resident of Switzerland and the charge was made to a Swiss company. Accordingly, Swiss consumer protection would likely apply, not US law. Second, the time for disputing the charge has long since passed. HolidayCars went bankrupt in December 2012 and it’s the end of April, 2013. 150 days after they went bankrupt, and Lord knows how long after the initial charge, is probably too late to dispute the charge. Too bad the OP didn’t know HolidayCars went bankrupt — or did he?

      The thing that doesn’t smell right is when he picked up the car at Avis, didn’t he notice the paperwork said, “Oh, hey, we’re gonna charge you double what you already think you already paid in full.” I mean, even just a cursory glance would tell you the estimated charges are north of $6,700. Something doesn’t add up here.

      That all being said, Avis should cut this guy some slack. Serious slack. Like maybe just charge whatever he ‘prepaid’ HolidayCars. That seems fair.

          1. Do EU or local laws require the company’s website to disclose the company is undergoing bankruptcy process?

      1. “I think there are a couple of problems with disputing the card. First,
        it appears he’s a resident of Switzerland and the charge was made to a
        Swiss company. Accordingly, Swiss consumer protection would likely
        apply, not US law. Second, the time for disputing the charge has long
        since passed.”

        That is all technically true, but it doesn’t necessarily mean that the credit card company won’t work with you if you ask. They are not OBLIGATED to take a dispute if the merchant is outside the U.S. and you are outside the 60-day window, but that doesn’t mean they won’t. I had a similar situation where I was living overseas and a foreign merchant didn’t deliver some merchandise as promised, and the dispute window had passed, but I decided to try my luck with Capital One anyway and they still processed the dispute. It doesn’t hurt to ask at least.

        1. My card gives you 120 days to dispute a charge, but they go by VISA rules. I wish I had used Discover. Even though the charge card company sided with me and tried to find a way around fraud isn’t disputable if you received the service you paid for (which pertains in this case and my case. Even when you are told a refund awaits they can renege on any verbal promises. My charge card company even called United in a three way call and we were told a refund would come. I feel really terrible for this renter because it’s a stacked deck against him.

  2. How can Amex say the charge by a bankrupt company that has failed to deliver the services paid for is valid? Seems bizarre.

    1. i agree. I think THIS is the angle that should be explored.

      yes, Avis took the easy way out; charging the customer instead of the charging HolidayCars,

      but if the $3,711 just disappeared in to the darkness dimension- someone needs to take responsibility- and that someone should be the credit card company.

    2. Swiss resident charging something from a Swiss company over five months ago. Not sure what Swiss consumer protections are offered, but that’s what would apply, not US law. And not sure the credit card company should be held accountable for something charged six months ago or longer and he says he ‘already paid’ for it, so I assume that means he already paid the credit card bill.

  3. This reminds me of doctor visits. If the insurance doesn’t pay you have to (and if you have large bills like we do for our child’s cancer, you often can’t get the discount the insurance companies [or Holiday Cars] receive. Will Holiday Cars owe Avis anything if a bankruptcy court gets involved? If so, Avis is in a better position to fight this than the person facing this type of bill. One wonders how you can protect yourself from this type of mess (I am in one myself right now, and came here to read about outcomes. So, obviously, I would think you should try to mediate something for this innocent renter who is paying the price for the negligence of a trusted travel discounter. I am extremely grateful for your help with our own overcharge from an airline. If it is true that Discover Card is the best card to have with a dispute I think it may be wise to start booking with certain cards that will take disputes of worth more easily. Avis didn’t just charge this man a reasonable fee, they hit him full force. Other than that, these stories (and our own) makes traveling these days a bit Marco Polo’ish on the monetary scale:)

    1. I’m sure that the OP would be a creditor of HolidayCars in the bankrupcy court. But his debt would be likely unsecured – and thus very low on the list of creditors, and hence unlikely to ever see a cent.

      I think the key here is the contract and invoices between the OP and Avis. If the invoice shows that the rental fee was paid by HolidayCars, then Avis shouldn’t charge him again – that means Avis is a creditor of HolidayCars rather than the OP. But it sounds like Avis only credited him for the first month?

      But I agree that it’s totally ludicrous that Avis won’t give him a discounted rate, equal to what they would have received from HolidayCars if the bankrupcy hadn’t happened. That is something you can certainly mediate.

      1. The problem is that in the travel industry, when you contract for services that are billed to someone else, you the recipient are also personally liable should the third party not pay.

        1. If this was a non-refundable voucher purchased in advance, then does that still apply?

          It would seem to me that if Avis confirms a non-refundable reservation and then allows HolidayCars to float their payments (if that is what happened here) then that decision and that risk rightfully belongs to Avis.

          1. Try to rent a car in JFK using Holidaycars. Then read the T&Cs …

            Terms and conditions:
            Booking Group has arranged your car rental with the car rental company indicated above. You should present voucher on car pick up at the rental desk. Please notice that the voucher is not a rental agreement and when you pick up the vehicle, you must sign a rental agreement with Rental Company named on this voucher which will be subject to local laws. Rental amount stated on first page of voucher should be paid to car rental Company. All local fees for services not included in the rental are billed by and under a contract with, the Rental Company and are billed in local currency.

            WHAT? He paid all the money to an ARRANGER???
            Do people even read the T&Cs?

          2. Not sure where you are pulling that language from or how it meaningfully differs from the T&Cs of other OTAs offering prepaid rates (which at a glance also have provisions about needing to sign a rental agreement and meet “qualifications” — such as a valid driver’s license and presumably a passable driving record).

            I’m looking here:

            and here:

          3. As I said go to the motions of renting a car from them. Then at the final page before you pay, the real T&Cs are there.

          4. If there’s a red flag, it’s that the T&C’s on the home page don’t match up with or fully agree with the T&C’s on the booking page.

            I don’t see how the provision about signing a rental agreement is notable or unusual.

          5. Yeah! Didn’t you see the ARRANGER is a different company, not holidaycars.
            And would you fork over more the $3.7k to some company you don’t even know whose only obligation is to ARRANGE a rental car? That’s too huge a stupid tax to pay.

          6. Taking a quick glance at the T&C’s of other OTA’s, it’s not so unusual that the arranger is a different business entity either. Although, granted, in most cases the related entities share a common brand name.

            The OP is from Switzerland and he used a Swiss company. I wouldn’t assume he didn’t know HolidayCars. Or at least he may have *thought* he knew them.

            And the reason to use them would be if it saves money. If the OP needed insurance, and $3,700 for 3 months really includes CDW and ALI as the site advertises it does for non-North Americans (before we get to some concerning language about that in the booking page terms) then that’s a MUCH better deal than he would get directly from Avis ($26.99/day extra for LDW and $14.49/day extra for ALI at the PHX location).

  4. Unfortunately, this happens more than you would think. You prepay a flight/hotel/rental car through Agency A with Travel Supplier B. Agency A goes out of business, and doesn’t pay Travel Supplier B before that happens. As far as Travel Supplier B is concerned, it never got paid, so your reservation is no good. Money has basically disappeared down Black Hole C.

    However, a couple of things about this story don’t make sense to me:

    1) If he was slammed with a bill for $6,700 a few weeks into a three month rental, why not just return the car? Unless he agreed to a prepaid rate with Avis, I don’t see how they could charge for a rental before the entire rental was completed. Or should the story read that he was charged the extra money a few weeks after he RETURNED the car?
    2) Why didn’t he try a credit card dispute against the $3,711 paid to HolidayCars? Most credit cards have clauses that provide protection against supplier default, assuming the services are never provided. In fact, when ATA went bankrupt a few years ago, they actively advertised that even though they couldn’t provide refunds, passengers with paid reservations should contact their credit card companies for assistance.

    1. I’m with you, particularly on point #1. Did he actually keep the car after basically being pre-billed that crazy sum? Why not just return it and then rent another car? Surely, it wouldn’t have been hard to beat the day rate. He possibly could have worked out a much better deal with Avis when he was doing the return and kept the very same car.

      My fear is that if he indeed kept the car for the whole time, that he accepted those terms by doing so. The time to dispute and negotiate something like this is before, not afterwards. Totally different story, obviously, if he’d been billed only after it was all over, but he got billed early on. But that still doesn’t excuse Avis from hitting him with a day rate charge when they clearly could have cut him a much better deal. It sounds like they were taking their pound of flesh from him because the other company went under.

    2. #2 was my thought too.

      Darn ATA, a sore spot for me. I used my miles to get 2 flights for my wife and I. Then they shut down. No way to get anything back since the flights were free and it was too close to our travel date to buy another flight on an alternate carrier. Turned our vacation into a staycation.

      1. I was always under the impression that credit card companies don’t want to mess with the courts.
        So once the thing is filed in bankruptcy court, all bets are off, and you become one of the thousands of unsecured creditors.

        1. I think this is under their protective services, like the warranty extension and such. They protect the user against a company who files for bankruptcy. I don’t think the credit card company actively pursues them in bankruptcy court, its just a service they offer. Mine also says that if I pre-pay for travel, and the service is not received, it is not subject to the 60 day limit for a dispute, I can dispute it up until 30 days after the date the pre-paid service was supposed to occur.

          I have seen a few local places go out of business and put up a sign that if you paid for something that they can’t refund, but encourage you to dispute it with the credit card including a blinds place we almost used, and am glad we didn’t.

          1. This reminds of all those bridal shop closing stories we see on NYC TV news. Now the list includes furniture stores whose suppliers in China have shut down leaving them with no inventory to deliver.

          2. I’m curious too. Later it said someone at Citi Bank said they will charge it back even if its been paid off. I refuse to carry a balance and have never had a problem with a charge-back when its been necessary.

            If the protection is offered, I don’t see how it would make a difference if it was paid off or not.

            I wonder if this is one of those consumer protection officers who encourages people to run up as much credit card debt as possible before they file for bankruptcy.

    3. Possible answer to Q#1 – he did not know at that time that HolidayCars was not paying its suppliers or in bankruptcy. He thought the voucher was still good.

      1. I get that – but what I was trying to get at was if he received a mysterious bill three weeks into his rental, why didn’t he just return the car to Avis at that time. I’m pretty sure they would have had to take the car back and charge him for only the period of time he kept the car.

        1. Agree. Sometimes people just have to help themselves not getting screwed even more. With the kind of money being mentioned here, it was cheaper to buy a car and then sell it after 3 months.

  5. This is the sort of situation ripe for mediation… nothing can be done about the money that went down the black hole. (It’s almost certainly out of the credit card dispute period.) But I think Avis maybe could be convinced to cut him a break on the rental rate. Maybe the originally contracted rate? Certainly charging him the walk-up rate, without notice, was a bit much. (It WAS without notice, wasn’t it?)

  6. From the snip of the Avis response, it sounds like the charge was for only 2 months (they state “the first month’s rental charge was accepted .. but not the subsequent months”). I just went to the Avis web site and not using any special rate or discount, an economy car is around $1800 for three months and I can rent a nice BMW from them for the full 3 months for a thousand dollars less than he was charged by Avis! Not sure what type of vehicle he rented, but this really is outrageous. He could have bought a used car for less and sold it back. Why did he not rent directly from Avis anyway since they seem to offer a better price than the company he used is difficult to understand.

    But I have an issue with this. Didn’t Avis attempt to contact the OP during the rental or at the time of the rental and inform him the pre-paid rate would not be accepted due to the payor going bankrupt? Did the OP blindly sign the rental agreement without reading it and missed the rate stated on the forms? (The Avis rental agreement is one of the most difficult to read of any rental car agency I ever used.) Since the credit card company sided with Avis on that charge, it would seem there is signed paperwork showing the charges. The credit card really failed him if they did not reverse the charge paid to the bankrupt company. Not sure about the rules in Switzerland, but I thought they were consistent world wide.

    Yes, definitely pursue this, if only to get the complete story.

    EDIT: Forgot the taxes on the rental. For the economy car that is an additional $1500 making the three month rental $3300. Still only half of what Avis charged the OP.

    1. I think either Avis realized DURING the rental that it wasn’t getting paid and retroactively charged him without saying anything OR the payment showed up after he returned the car. I don’t think anyone would keep the car knowing the rate he was being charged. The facts could be better written, though.

      1. I can’t believe anybody would keep the car after getting a $6,700 pre-billing, but the story seems pretty clear that is what happened:

        “When he picked up his car from Avis in Phoenix, where he planned to rent it for three months, all seemed well. Then, a few weeks later and without any warning, he found a $6,742 charge, in addition to the $3,711 he’d already paid HolidayCars.”

        Unless it was supposed to say “a few weeks after the trip was over.” I’m quite confused why he didn’t either outright return it or work out a better deal with Avis. Hard to imagine that a phone call wouldn’t have resulted in him getting better than the day rate that they apparently ended up charging him.

  7. The thing that is REALLY confusing is that Avis is saying the first month he paid WAS applied to his rental? So he paid $6700ish for TWO months? Or was that for THREE months and then what happened to the first month Avis says was already applied. Something is way wrong here. At the very least. Avis needed to charge him the negotiated amount and no more. The reaction from the credit card company is deplorable. Avis presumably had some sort of agreement with HolidayCars before it went bankrupt (to allow it to take reservations and send customers and money to Avis) and so Avis should have been stuck with that negotiated rate. The credit card company should have reduced the amount to that, at least. There is no reason he should have been billed the full rate. I would also argue that it’s AVIS that is a creditor and not the customer. He paid one company which didn’t pay another company. This isn’t like an airline that went bankrupt. The service was being provided by Avis, not HolidayCars, so Avis really should be the one stuck with this bill. Even if you want to argue that the customer should be the creditor, he still shouldn’t have to pay the full rate.

    1. The whole thing is rather confusing. I’m having a rough time figuring out exactly how things went down. Basically a month into his 3-month trip he gets a $6,700 extra charge for the rental car he’s already paid for. Surely, he contacted them immediately about that, yet the letter only mentions him writing to the manager in Phoenix, which must have happened well after the fact when he was trying to get his money back. He calls it a “phantom” charge, but if I’m reading it correctly it actually was a pre-billing for the other two months of his rental (the first month being paid prior to the HolidayCars place going bankrupt). What did they tell him when he first contacted them asking where he could drop the car off? Because, he wouldn’t have just kept the car after getting that charge and not attempted to sort things out immediately, would he?

  8. I’m reading through this and I just don’t agree with people blaming AVIS. Could AVIS have simply honored the rate they gave HolidayCars? Yes. Should they have delivered their service without payment because they company the OP paid went bankrupt? No. Either way, the OP ends up having to pay AVIS again because the company he paid did not pay AVIS for the car. Its a risk you take introducing a third party into the transaction.

    The issue here is between the OP, HolidayCars & his credit card company. Shame on his CC company for not refunding the payment to HolidayCars.

    1. Some of us are blaming Avis because at a minimum they should have honored the original price. Avis is making a huge windfall in this transaction. If HolidayCars was charging the OP 3k, it was paying Avis less than that. Thus Avis is taking advantage of HolidayCars misfortune to make double the money it would have made had the contract been properly fulfilled. I certainly understand Avis not wanted to take a loss, but making more than a double profit at the OPs expense is unethical and morally reprehensible, particularly as the OP is blameless in this matter

      1. Exactly. The other company went under and Avis can’t hammer them, so they’re getting their pound of flesh from this poor guy. I can’t fathom the fact they charged him a day rate on a 2-month rental just because they could. You’re a lawyer, Carver, is that even legal? They’re not out that amount, so how can they charge the end party more than they lost on the transaction with the middle man?

  9. The average daily corporate rate at Avis is $36USD…which for 30 days is $1080 before taxes…$2160 for 2 months before taxes. To charge $6700+ is the biggest rip-off I have seen yet in the shady world of car rental firms. Furthermore, if they only told him AFTER the fact that he was being charged, I am sure that there might be an attorney out there who might care to take the case on a contingency basis to counter-sue for 6 or 7 figures, and watch how fast the New Jersey weasels crawl back into their holes.

    1. Don’t forget taxes on that $36 and insurance too. Taxes alone will double the rate. Insurance charged by the rental car companies can easily double that rate too.

    2. Don’t count on it. The most likely best case scenario would be a refund of the additional charges.

  10. I work for a car rental wholesaler in Australia. 90% of our business is travel agents, the rest direct clients. (Besides the point) In Australia we have something called the TCF – Travel Compensation Fund. Basically to get a travel agent licensee and to be allowed to operate in NSW you have to contribute to this fund. The role of the fund is to ensure that what was booked and paid is delivered. In cases such as this where bankruptcy occurs the fund can assist those who have been affected with refunds and assistance in recouping there losses. A recent, highly publicized case in the industry involved the collapse of Air Australia. It highlighted the importance of the fund in providing the few who had booked through the travel agent refunds from the money lost. Those who hadn’t booked through a agency were at a loss. Just wondering if such a thing exists in the US/ Switzerland, as this would/could benefit/benefited the OP??

    1. No such thing in America except in CAL. CAL has a restitution fund but I don’t think rental cars are covered. Bodega can explain.

  11. AVIS agreed to pay HolidayCars something less than $3711 for Mr. Good’s car rental. HC went bankrupt, leaving AVIS unpaid. To be fair and honest, AVIS should demand to be paid the agreed-to amount for their car rental – not twice as much.

    “Therefore, because of the bankruptcy, we are unable to secure our payment from HolidayCar; this is why we applied the subsequent months directly to your Visa account for the cost.”

    “The cost” certainly isn’t $6742. Assuming the ridiculous – that HolidayCars is a non-profit with zero overhead – “the cost” is $2474.

  12. To unravel this we need to enlist the help of one of our travel agent friends who can explain the contract between Avis, HolidayCars, and the OP. However, in the meantime, I’m guessing that HolidayCars is a reseller; that they rent cars from Avis at a discount and then re-rent the cars at a higher price. If that’s the case here is the problem for the OP. The money that was paid to HolidayCars is tied up as part of the Bankruptcy proceedings. He is entitled to a refund of that amount. However, since he’s an unsecured creditor he will probably get loose change. Depending on the timing and type of bankruptcy, the credit card company cannot debit HolidayCars account as all funds belong to the bankrupt estate and are under court control. The credit card company can decline to add additional funds, but it cannot take any out.

    That leaves the OP with Avis’ car and no discounted rate, hence the outrageous charge by Avis.
    If the above is correct, the credit card company had no choice but to rule against the OP.
    Regarding Avis, the OP had the car and no contract with Avis. Avis’s charge is valid, even though the amount is repugnant.

    This entire mess really sucks.

    1. I agree that the OP becomes an unsecured creditor. Nothing the credit card company can do UNLESS you can prove that it withheld a part of your payment to HolidayCars. I am not sure what the holdbacks would be for a car rental company.

    2. Carver, we need to see the contract signed by the OP when he picked up the car.
      Even if the OP (pre)paid HolidayCars (a merchant / agent) and he presented a payment voucher issued by Holidaycars when he picked up the car from the actual provider, he could have signed a contract with the actual provider and left his credit card with the actual provider (for other charges). That contract is essential. It *may* have given the provider the right to charge his car if the merchant/agent that marketed him the rental could not pay the provider.
      The lesson here is to stay away from prepaid MERCHANTS and TOUR OPERATORS that are you are not sure is financially sound. The travel industry in Europe must be crumbling together with the economy. Do not believe the BS you read from Travel Agents who make a commission selling prepaid crap. Always POST PAY.
      Let the hate mail begin !

      1. Not hate mail, but confusion. I did have a good experience with my recent trip to England, where my travel agent had me present prepaid vouchers to 3 different hotels. I paid the travel agent with VISA, TA paid the arranging company, and I got 3 vouchers for 3 hotels. I also had to leave a credit card number at each place for “incidentals”.

        This was based on my travel agent’s advice. But you are offering different advice. Wouldn’t my agent have also received a commission for booking me with those hotels or have been paid by a fee from me? I’m not seeing the connection between a TA receiving a commission from pre-paid arrangements and a bad deal. Help, please?

        1. HolidayCars is an agency. It takes your money and then pays the car rental company. It is safer to just pay the car company directly. As you can see when the agency went bankrupt, the OP lost his money. It’s that simple.
          A travel agency can still make commission booking a car for the OP and without getting his money. Same with hotels. I don’t need to get your money to book a hotel or car for you. I can simply enter your credit card for the car company and hotel to charge you.
          This whole prepaid vouchers started with FIT and TOs because at that time you had to bundle a lot of services together. Then it morphed to a wholesale merchant model ala Expedia and Priceline.
          By the way who would suspect Holidaycars would go bankrupt? They even had groupon deals in the UK. Do I know the financial condition of all my suppliers. No. No one can tell when a firm will go bankrupt unless you are inside and pretty high up. Did anyone here now AA would go bankrupt?

        2. Next time you talk to your travel agent ask the real reason WHY TAs prefer to sell prepaid hotel and cars. You know why? Because even if their consortium has a commission plan it is very hard to collect commissions (if you post pay the hotel or car company). With prepaid you pay the travel agent and the TA gets their commission (or markup) up front. What TA will not like that?

          This whole voucher thing started because Tour Operators (TO) and those selling to Free & Independent Travel (FIT) needed to put together quite complex itineraries like a European 10 city tour, etc. Now the same product are sold by wholesale merchants like Expedia and Priceline even for a single night stay in one hotel. The former needs prepay because you are creating a BUNDLE. The latter is like buying Coke from a vending machine.

          Ask yourself this question. Do you need a travel agent to rent a car in Phoenix? Don’t think so. The rental car lot there is larger than my town’s airport (Westchester NY). No lack of choice. What possible help can a travel agent give you for such a simple task? In the case of the OP, he added (monetary) RISK to his problem.

          1. Okay, that answers my question as to why for my rather complex trip to England my agent used vouchers.

            But I think the bigger problem is compensation via commissions. I pay an attorney an hourly rate. I pay my electrician and craftsmen hourly rates or by the job. Why shouldn’t I pay my travel agent by the job or an hourly rate? I know, I know, I’m being rather naïve. But by doing so, I’d remove all incentive for my agent to suggest pre-pay vs. post-pay. And these kinds of situations wouldn’t happen. Mr. Good would only be out the mark-up, rather than the entire amount he paid to HolidayCars.

          2. Jeanne, I, personally, am moving to this model (pay me for my skill not what I sell to you).

            I do not like the current model where travel agents have to distribute (sell) a product to make money.

            We should be travel consultants not sales people.

            I am already practicing and mastering this new method. There is really not much HIDDEN anymore when it comes to travel products.

            It is double work because I still do the work (research) as I normally do but there is additional work in providing instructions on how to book it yourself. In other words I want to consult for DIYers because that is where all of this is going (in my opinion). My supreme challenge is if I am able to sell myself to the younger set. So far so good but it can get crazy as they kayak, skyscanner, momondo everything you say.

            Some TA might tell you they have a great exclusive rate on a hotel, etc. But, really, what great hotel will subject itself to that BS exclusive deal? In my opinion hotels are mostly location, location, location. And really good hotels know they are good so they don’t beg. Unless you have personally stayed in that hotel, you cannot really talk about it. Same with destinations. Unless you have been there and walked around the town for a couple of days, you really don’t know squat about the place. You might as well read Rick Steve’s books.

            So I think you nailed it. Find a professional for the travel you want to do and pay them a professional fee.
            Of course there will be travel expenses that still has to be prepaid, but you will be open to see more where the money is really going.
            As for the OP, I think he made a big mistake. Never give $$$$ to some outfit you don’t know even if they have a great website.
            If you try to book a car from that site today for let’s say JFK, you will be dealing with a wholesale consolidator from LATVIA.
            What? Why do I have to pay someone in Latvia for a car in Queens, NY? I’ve gotta be crazy to believe them.

          3. My former travel agent went this way. She specialized in wine tours, and when Mrs. Emanon and I went to Napa few years ago for the first time she interviewed us and then prepared a multi-page choose your own adventure guide for us which included time lines (when to go to what place and in what order), coupons, instructions on how to make specific reservations, restaurants and their phone numbers, maps, amazing insights down to the view in certain areas and what time of day to use what road. This was all tailored based on our tastes. I was quite impressed.

            She also did my work hotel bookings for a while until my hotel stopped offering comissionable rates, then she said she would have to charge me hourly to book, so I booked myself after that point.

            She focused more on a customized travel experience and charged by the hour for her work. Also, whenever I went on vacation I would pick my hotel, call her, and she would always get me a better deal. Usually the same rate, but with a resort credit or free meals. She made the reservation, and I never had to pre-pay. I always paid the hotel and she got the commission from them.

            The only reason she is my former TA is she moved to a state that has very weird laws concerning travel agents and sales tax on commissions and additional licenses and such. I hope she starts back up soon.

  13. Shame on Avis for charging him the walk-up rate. I’ve always rented from Avis and felt good about them, but this gives me a very bad feeling for them now. He should certainly get legal help in recouping the money he paid to HC (which really is not Avis’ problem and they are probably also trying to get paid through the bankruptcy), but Avis should not charge him the walk-up rate after he’s already had the car for one month. At the very least, please mediate to get Avis to reduce the rate for the second two months to be inline with what he was paying for the first month..

  14. Wow, I just can’t believe this! It’s not Good’s fault HolidayCars went out of business. He contracted through them, in good faith, for an Avis car, the least Avis could have done is contact him BEFORE charging his card. To me, it seems Avis stole his money, plain and simple. Will I ever rent from Avis again? I think not.

    1. It is not out of business. It was just forced into bankruptcy. The website is still up and dangerous for those who have no idea what’s going on.

  15. i would refuse to pay the charge. when they put it on a credit report id dispute the black mark by sending a letter of explanantion to the credit bureau…

    1. Works better in theory than reality. I’ve heard so many horror stories of people struggling to get black marks off their credit reports even in cases where the charge in question was 100% fraudulent. In this case, the guy apparently kept the car and used it for the entire time and didn’t complain about the crazy high rate until after the fact. I don’t think he’d stand a chance with the credit bureau, particularly since his credit card company already ruled against him.

  16. why can’t they just charge him the negotiated rate for the rest of the time he had the car and be done with it? their actual loss on his rental due to the bankruptcy of the partner they had an agreement with is much less than they’re charging him. Avis sucks.

    1. Definitely would have been the fair way to handle it. Frankly, given the circumstances, I’m surprised they didn’t contact him and give him the option of returning the car immediately when they found out they weren’t going to be paid by the reseller. That would have given the customer the option of being out no extra money and Avis getting their vehicle back. Instead, they very much took the stance that he wasn’t really their customer, so they could treat him as badly as they wanted.

  17. I say mediate. Although it does not appear that you will get far I have noticed that your intervention usually helps consumers.

    On another point, how many third party sites have caused problems?

  18. So, how much was he actually out? I’m assuming he immediately returned the car when he got billed the $6K at a daily rental rate, didn’t he? (The timeline says he got billed that a few weeks after picking up the car for what was going to be a 3-month rental.) Wouldn’t he have returned it immediately to avoid that daily rate? Surely, he couldn’t have been held to that rate once the car was returned, given it was a tremendous increase in what he was supposed to pay and wasn’t even coming from the company he’d contracted with. And if he kept the car for the whole time, I fear he may be out of luck because his keeping it would basically be an acceptance of that crazy-high rate.

    1. Maybe he didn’t check his credit card statement/account until much later so although it was charged a few weeks after picking up the car, he did not see it until much later

  19. In many states and countries, consumers are protected against bankrupt in Travel industries by a public trust fund contributed by all consumers (in Quebec every certified agent, including Airlines or any web operators, must charge and contribute 2$ for every 1000$ sale to this Fund). If I remember well (I lived in Geneva before moving to Quebec), some Swiss Cantons have similar Fund. HolidayCars must be a certified agent to operate in Switzerland. Usually the consumer need to make the claim to the Fund if he had purchased from a certified agent (which can be airlines, or web third party like Expedia,etc…).

  20. I’m voting yes, and what I think you should do it try to get Avis to adjust the charge to what they would have been paid by HolidayCars for the second two months. That way Avis comes out whole, and got what they would have gotten had HolidayCars not filed for bankruptcy. I am surprised Avis didn’t do this from the beginning.

    As for the charge by HolidayCars, did Harry dispute that charge as well? That is what I would do, and hopefully he will recover the money that way as it is unlikely he will in court since they are bankrupt.

    How many times do things like this need to happen before people learn not to pre-pay through these dinky little travel vending machines. Heck, problems similar to this happen with the big vending machines too and even when not pre-paying. Its not worth the risks. Use a real agent, or book with the service provider directly, and never ever ever pre-pay unless you are paying the actual rental car company, hotel, etc. When working with my agents, I almost never pre-paid, and when I did it was to the hotel, rental company, or airline. Though I often will opt for a higher rate to not have to pre-pay.

  21. I really hope you gives us an update. That “we are working on it, don’t get involved” answer is rather rude. I would like to know what happens to Mr. Good, and if I should keep doing business with Avis.

  22. so much for AVIS and customer NO service at least a beretter monthly rate could have beern charged by avis for a long tern use vs a high daily rate>?>>??he could have bought a used car for $10,000+++ or even one from another rental company that sells at the end of each year?? he was highly abused by avis

  23. Looking at HolidayCars’ archived terms and conditions, it seems that the OP’s reservation would have been non-refundable and non-changeable inside of 48 hours of pick-up time.

    So one question I have is: why didn’t Avis collect the whole amount they were due up front? Why did they allow HolidayCars to float the payments month-by-month? Whose fault is that and who should take on that risk?

    Did HolidayCars’ arrangement with Avis entitle them to pocket the whole difference if a customer cancels beyond the deadline or returns a vehicle early?

    1. Not saying this is the case here, but with my former company I had a multi-month rental through Avis, and Avis billed me monthly for the car. So if it is similar in this case, they billed Holiday travel each month, and only got paid for the first and then learned it would not get paid anymore, so started billing Harry.

      In my case, Avis upgraded me to a luxury car since it was such a long term rental. I would not be surprised if they did the same thing for Harry, and are now being total jerks and charging him full price daily rate for the upgraded rental rather than what he reserved. Again, I am just assuming here, based on my experience.

      1. I’ve done month-to-month business rentals with Avis myself, so I’m familiar with that.

        But those (at least in my experience) can be cancelled at any time with no penalty (other than daily/weekly charges for partial months). That doesn’t seem to have been the case here.

        1. Good point. I turned it in 2 weeks early and they adjusted it accordingly based on the weekly rate. They also always billed at the end of each month.

  24. There is no arbitration to be had here. This is going to take one hell of a lawyer and one that works with international bankruptcy counts. I would turn the car in ASAP and go to a travel agent to find something a heck of alot cheaper. I wonder in the back of my head, what does the contract have to say about monthly vs dayly rates? The story addressed both, both did not address when they changed.

  25. Mediate. Charging the customer because their agent went bankrupt after the customer paid the agent is wrong-maybe not legally or in a general business sense, but it sure makes no sense customer service wise.

  26. I am new to this board so I wondered if airlines, or rental car companies care all that much…on a public relations scale? Do they care that they are creating enough customer dissatisfaction that Avis will lose this $6000 in future sales? I am keenly interested because United ripped us off for $4000 (somehow a piece of paper was missing from the packet they gave us and we had to repurchase a ticket or get stranded overseas in Scotland…begging and pleading didn’t help:). A trip we took to make our daughter with cancer happy. It was the airlines fault (refusing to print the missing piece of paper) and we are still stuck in refund limbo land (the refunds method seems rigged…you can’t talk to anyone with authority and it takes almost a month to hear back). We have a false sense of a security blanket in thinking that the government has regulated travel to protect us, but after reading through these posts it’s highly discouraging. These Terms of Agreement are so purposefully set up to protect the company and consumers are without recourse unless they find a place like this blog that will help. It just feels like a RICO’ish type of set up that benefits the epitome of crony capitalism that is flustering the public. It feels like it takes an act of God to get a refund, even when you did nothing wrong.

  27. I don’t understand why the challenge to the HolidayCars fee wasn’t approved. He gave them that money to pay Avis. They didn’t pay Avis.

    Avis is probably right about the charge for the period for which it didn’t get paid, but good customer service would suggest that it should charge him the same discounted rate he would have otherwise had. He’d still be double paying because he got screwed by HolidayCars, but at least it’d be at a better rate.

  28. Even European Union Consumer Centers have given up on Holiday Cars cases
    So you think Americans or Elliott can do better? Nyet!

    The Dutch ECC informed our Centre that the Dutch company Holiday Cars B.V, which was acting as intermediary in worldwide car rental, has declared bankrupt.

    As it was already mentioned, the company acted as an agent and mediated between the renter and the local car rental company. Although the car rental agreement was concluded between the renter and the car rental company, the client (the renter) booked the car via and paid them for the rental. The customer voucher was issued by the Holiday Cars B.V. This proof allowed the renter to collect the car from the local car rental company.

    According to the Dutch ECC it can happens that the Holiday Cars B.V. did not pay the local rental company, so the vouchers remained unpaid due to the financial difficulties and starting of the liquidation procedure against the company. In these cases it is most likely that consumers will have to pay (again) at the local rental company in order to collect their rental car. It’s very important to carefully read the rental agreement before signing it, because it is possible that the local company reserves the right to make deduction from the renter’s bank account, so the consumer has to pay for the rental twice.

    Consumers can lodge their claim to the bankruptcy trustee via the following e-mail address: [email protected]

    Copy of the invoice/voucher provided by the Holiday Cars B.V. and the proof of payment must be attached to the email.

    We would like to draw your attention that the website is still operating, so according to the above mentioned it is risky to book a car through this site.

    Taking into account that the liquidation procedure of Holidays Cars B.V. has started, the European Consumer Centre cannot provide assistance to consumers in settling their complaints against the Holiday Cars.

    Liquidation of Dutch society Holiday Cars International BV / Holiday Cars BV Group – 14/01/2013

    The European Consumer Centre (ECC) France informs us of the recent bankruptcy of the Dutch company Holiday Cars International BV / Holiday Cars Group BV
    Consumers who have a dispute with this company may submit a claim with the liquidator whose email is: [email protected]
    Consumers are invited to write their email in English and attach copies of documents relating to the dispute (booking confirmation / voucher, proof of payment, email exchanges, etc..).
    However, it is recommended that consumers who paid their order by credit card to contact their bank and / or card issuer to stop payment as soon as possible. If payment is new, consumers can call the telephone number reserved for interbank oppositions: 0892705705 (0.34 € / min) or the phone number provided by your bank to the opposition. These numbers work 24h/24 and 7/7.
    However, it is recommended that consumers contact the rental vehicle to see if the property can be maintained and whether it has been paid by the company Holiday Cars International BV / Holidays Cars Group BV
    Finally, if the consumer has booked a car through a travel agency, it will check with it if an alternative can be implemented.

    In addition, the CEC France reminds consumers that it is a judicial process and that their services are not able to assist consumers or represent.

  29. I would like to know why we are talking about Swiss laws.

    From what I gather in the internet HolidayCars is a DUTCH company.

    Holiday Cars Group Bv with trading name Holiday Cars in Sassenheim (Zuid-Holland) was declared bankrupt by the court in Den-Haag by termination of the suspension of payment on 03-01-2013. The appointed curator is mr. C.A. de Weerdt. The insolvency number of this case is F.09/12/960. The (main) activity of Holiday Cars Group Bv is travel agency, tour operator and other reservation service and related.

    If you are a Swiss citizen with a laptop making a reservation ONLINE with HolidayCars, do Switzerland laws apply? Certainly AMERICAN laws will apply if you pick up the car in Phoenix. Where was the credit card processed? The Netherlands? Where was the contract done? Can lawyers here please explain cross border internet business contract law? Thanks.

  30. At the very least, Avis should have sent a warning: Your rental is not paid for, we’ll start charging you this and that. Or communicated that at the counter.

  31. I don’t rent cars, but my kids do, and often, it’s from Avis. I will now tell them that while Avis may still be #2, (I don’t know if they still are,) they no longer try harder for the customer. Their deterioration is a disappointment. I will tell everyone I know who rents cars to no longer trust them.

  32. So, someone used this guy’s reservation to commit credit card fraud and Avis is saying their hands are tied and he can go get in line with the other bankruptcy creditors? Oh heck no. If they don’t take a serious review of this matter, I will be really concerned as a consumer.

  33. Avis had a moral/ethical obligation to inform Mr Good (BEFORE they automatically charged him their own rate), that his reservation with Holiday was null and void, and to give him the option of having Avis take over the rental. To me, the way Avis handled it was just plain white collar crime.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: