Hertz files approximately 3,365 police reports each year charging customers with car theft after renting its cars. The number emerged on Thursday, after the car rental company lost a lawsuit in its effort to keep the information sealed and out of public view.
The number is part of evidence in an ongoing lawsuit in which more than 100 customers are suing Hertz for $529.7 million in bankruptcy court after being detained by police, arrested and sometimes spent months in jail for allegedly “stole” cars that they had simply rented. . Most of these reports of theft occur when a customer renting a vehicle wants to extend the rental, according to the lawsuit. The customer calls Hertz to request an extension, and the company temporarily suspends payment on the credit or debit card the customer used to rent the car.
If that hold fails, for example because a customer is close to their credit card limit and hasn’t paid their bill yet, Hertz reports the car as stolen “by conversion” to local law enforcement, says the trial. After the customer pays — and even after they return the car — the company doesn’t withdraw the theft report, a Hertz spokesperson said. Recount The Philadelphia Investigator. As a result, at least one former Hertz customer says she learned during a background check that there was a warrant for her arrest, even though her car rental had been completed and paid for several years prior, and that she had never been told there was a problem.
A competitive disadvantage?
Hertz has kept the number of conversion theft reports it files carefully hidden from public view throughout this lawsuit, arguing that if it became known, it would put the company at a competitive disadvantage. Not for the obvious reason that it might make people hesitant to rent from Hertz, but because other car rental companies might use this information to determine how the company manages its inventory. At least, that’s how Michael Severance, vice president of fleet for the Americas at Hertz, explained it in court.
“I can imagine a scenario where, say, they know the number of annual police reports they file and now they know ours,” he said. “Let’s say they deposit more or less than us, so they could interpret that to mean that we have better front-end controls, for example, preventing theft, and they could be looking at ways to improve their abilities to reduce flights.” This argument did not convince Bankruptcy Judge Mary Walrath, and she ordered Hertz to reveal the number of conversion theft reports it files. She allowed the company to keep other types of police reports secret.
When asked to comment, Hertz repeated its earlier statement that it cares deeply about its customers and that the vast majority of its theft reports are filed because rental cars are weeks or months late. and that customers have stopped communicating with the company. In response to this week’s ruling, the company said:
Although we believe that business numbers provided to the court under seal are commercially confidential information, we will respect the decision. We believe that a review of these figures reinforces what we have always said: situations where vehicles are reported to the authorities are very rare and only occur after exhaustive attempts to reach the customer.
As for the hard numbers, of the more than 25 million rental transactions by Hertz in the United States per year, 0.014% fall into the rare situation where vehicles are reported to authorities after exhaustive attempts to reach the customer.
If you do the math, that’s 1.4 theft reports per conversion per 10,000 rentals, plus an unknown number of other types of theft reports, since the other categories are still under wraps.
If nothing else, now that the number of conversion theft reports is public, it undermines Hertz’s oft-repeated argument that only a very small fraction – “tiny, tiny” – of its police reports result in the arrest of innocent people. Consider that Hertz was prosecuted for these conversion arrests as far back as 2008. If he really has filed 3,365 police reports on tenants every year since then, that’s over 47,000 reports. This could mean that more than 47,000 customers have been stopped or arrested by the police – at least in some cases, for no good reason. Many of them may now want to join the lawsuit against Hertz. It doesn’t seem so small anymore.