Budget blows damage claim, sends bill to collection agency

Car rental companies are known to unleash collection agencies on their customers, often for no good reason. Don’t believe me? Just pick up a car rental trade magazine to see the full-page ads by companies that handle damage claims, which are just a step removed from a collection agency. Or visit my office, and I’ll share the “collection agency” case file with you. Or read this.

Don’t get me wrong: I think these companies have a place in this world. But not in Dorothy Rice-Lara’s world. She rented a car from Budget recently, and says she was hit by a false damage claim, followed shortly thereafter by an unfriendly note from a collection agency. No amount of begging and pleading with Budget would get it to budge.

Here’s Rice-Lara’s story:

Last May, my husband and I went to Washington state to attend his daughter’s wedding. We arrived in Seattle International Airport and rented a Chevy Aveo from Budget.

It was late, and I noticed scratches on the side of the car. I went to the attendant to tell him and he insisted he was aware of it and didn’t have time to do a report as it was at the end of his shift. He indicated that they had it on record and to be sure to do a a disclaimer report when we return the car.

OK, let me just interrupt her for a second. It was late and he didn’t have time? Come on, Budget. Rice-Lara shouldn’t have left the lot without being allowed to note the damage.

Honest as we are, we did just that and shortly thereafter received a bill for $755. I demanded to have a report sent for all activities on this car. Brad from Budget rudely told me they do not perform that kind of service and that I needed to pay it immediately.

Huh? A car rental company doesn’t justify a damage claim? Since when?

My car insurance, Nationwide, covers car rental therefore I didn’t purchase their insurance — something Brad told me was a “big mistake.” He demanded I pay immediately. I contacted my insurance claims department and made an argument that I was only accountable for the $250 deductible in October and paid them $326 in July and that I’m not liable for any difference, per the agreement between Nationwide and Budget.

Budget sent me to the collection agency in October to collect the $755. Mind you, my insurance already paid them 326. My error was I forgot about the $250, as I never received another billing due to waiting to see what the balance was after the insurance paid.

I have been fighting United Collection Corporation ever since I paid them the $250 on October 16, demanding I pay the difference of $429. I call Budget yesterday, and they refuse to discuss it and the lady refuse to provide her name. She did mention that I still owe $179, which covers the three days of rental and administration fees while the car was being repaired. My insurance company indicated that I’m not responsible for that and that was the agreement with Budget.

None of this should have happened, of course. The damage should have been noted before Rice-Lara drove the car off the lot. When she returned it, an employee should have carefully explained the damage claims process. Budget should have come to an agreement with her insurance agency, and a collections agency should have never, ever been involved in this case.

I contacted Budget on her behalf. Several days later, I received the following email from her:

I wanted to say thank you. Budget called me yesterday and finally settle the claim and gave me an apology. The women who called me listened to all my issues and kept apologizing in regards to United Collection Agency not closing the case back in October.

When I asked how this got settled she indicated that her boss received an email from you.

Amazing, I said. I had called and left numerous voice messages to individuals with Budget and never received a phone call.

I can not express enough how thankful I am. Never in my dreams did I think anyone would care. You proved me wrong.

Happy to help, Dorothy.

(Photo of random damaged car by Jen ♥/Flickr Creative Commons)

  • BucksterSF

    Always Always Always mark down damage on a rental before you take it off the lot. Always.

  • Carrie Charney

    If she wasn’t responsible for any of it, why should she and her insurance company have had to pay anything?

  • Aimee

    Did I miss something or did this woman just pay for damages she didn’t cause? Shouldn’t her insurance agent have helped her fight them on this? This sounds like a classic scam and she was much nicer to Budget than they deserved.

  • John

    Chris … think this goes back to the advice I always give my travelers … Never leave the lot with unannotated damage. Even if they state its too small. If the rep won’t document, take a picture of the damage and then a picture of the lot with your cell phone (so the time stamp shows that you never left the lot).

  • Chicky

    While I’m glad Chris was able to get the collections people off her back, it still stinks. Absolutely unnecessary. It cost Budget far more to initiate the collections process than the alleged $755. Good grief.

  • http://www.angrymarks.com/ Kevin Fields

    It’s a shame that we cannot trust an employee or a company at their word. Fortunately I learned two lessons years ago before I ever encountered them myself:

    1) If you are the customer and there is a dispute about something that may end up costing money, DOCUMENT DOCUMENT DOCUMENT and do not let anybody out of the loop until everybody documents it, signs off on it and you get a copy of it all

    2) If you are the employee and there is a dispute about something that may end up costing money, DOCUMENT DOCUMENT DOCUMENT and make sure that you do EVERYTHING in your power to properly resolve it before you pass it up the chain of command. It’s quite possible that you might be able to resolve it yourself, and there’s not excuse not to do that as a representative of your company. But if you don’t do everything that you can or should, and you pass it off to somebody else, and the company has to pay for it later, you can be sure that they’ll come back and put the entire blame on you.

  • LeeAnne

    Having almost been a victim to this type of scam myself (saved only by my photo of the damage before I left the lot), this is a sore point with me. I continue to be horrified by this criminal scam that car rental agencies are running. And the ONLY person I see out there fighting it is Christopher. Where are our legislators? Why are these companies allowed to continue to steal from their customers? Why isn’t someone pushing a bill or passing a law?

    On another note, it’s always refreshing to see these companies roll over the moment they hear from Christopher “Corleone” Elliott. Refreshing, but also irritating that it takes the threat of media attention for them to stop knowingly ripping people off. It makes me laugh…AND it makes me angry!

  • Ed

    Whenever I rent a car, I whip out my camera phone and start snapping pictures. Then using a little app called Shozu, this app sees that I have new pictures which it then automatically begins to upload to my Flickr account. This way, if I loose my phone, I will always have those images on Flickr. And the images on Flickr act as a kind of “time-stamp” showing the time and date that the images were uploaded to Flickr (I was once accused of doctoring a photograph’s file timestamp from a car rental company. Until I showed them the EXIF information in the actual JPEG corroborated the file’s timestamp)
    Ed

  • Jerry Mandel

    Also, dispute the charges with your credit card company. Note: If your card is Amex, forget it. They always decide in favor of the vendor, regardless of history or documents.

  • Noah

    @Jerry Mandel—

    There must be more than one Amex company, because the one that provides my charge card certainly doesn’t “always” decide in favor of the vendor. I’m 1 for 1 on Amex challenges – with a car rental company no less.

  • Justin

    @ Chris,

    Why is she happy for HAVING to pay for someone else’s damage? She is Grateful that her claim got closed out for a 755 mistake that was not her fault? She does realize that HER RATES will go up on her insurance due to a claim? Maybe I am missing something, but I would DEMAND PROOF of damage before they received a dime.

  • Gerry

    “Always Always Always mark down damage on a rental before you take it off the lot. Always.”

    @BucksterSF, that’s a good start, but it isn’t nearly enough. What if Dorothy HAD insisted on writing down the damage? Would the damage report have “disappeared” the way Budget “disappeared” a damage report I once filled out? Would she have gotten a call about damage that wasn’t there when she brought the car back, as others have?

    Dorothy’s only real mistake was not to trust her instincts and turn around and leave when the car rental company’s agent insisted he didn’t have time to do a damage report. I have rented from Budget all over the U.S. (though I’ll never rent from them again) and I’ve never seen a Budget Rent-A-Car franchise where an agent does the damage report. YOU do the damage report, using a form that is generally in the car when you pick it up. That agent was running a scam on her, with the cooperation and complicity of Budget’s corporate office.

    I’ve rented cars for hundreds of weeks over the past decade, and I’ve talked to many other frequent travelers in recent years, and nearly all of them have a rental car damage scam story. I’ve even heard about corporate complicity in damage scams from people who work on the rental car lot. It’s not rare, and as Budget Rent-a-car’s obstructive and aggressive response to Dorothy shows, Budget Corporate has put a lot of effort into their get-money-for-nothing business model.

    With so many indications that you are dealing with a predatory business, you have to approach rental car franchises with the attitude that they’re all crooked and that you need to think really hard about how you’re going to avoid getting ripped off. It’s just too costly to do otherwise. Christopher Elliot’s blog is replete with good advice on photographing rental cars when you pick them up and bring them back, on saving every single piece of paper you get from the rental car agency for at least a year, and on other safeguards against being scammed, but you can’t keep up with people like those who run Budget Rent-A-Car.

    You have to think hard all the time you’re dealing with the rental car company’s agents. Did the agent tell you something? Got proof of that? Then he never said it. Did the CSR tell you something when you called? Got proof? Then they have “no record of that call.” Was the car damaged when you picked it up? Was the car undamaged when you returned it? Got proof? Then pay up or Budget Rent-a-car will turn you over to a collection agency. They can’t do that? Sure they can! How are you going to stop them? Heck, I haven’t rented from Budget in four years, and I expect to get a call from Budget Rent-a-car’s collection agency any day now for damage to a car I never rented in a city I never visited. Why not? Budget Rent-A-Car doesn’t think it has to give you any proof of anything to collect from you. Why stop at actual damage from actual rentals? There’s a whole untapped market out there of people who didn’t even rent!

    So the advice to write down damage is good, but really, how bad do you want to do business with the kind of people who run Budget Rent-A-Car? Or Payless, or Enterprise, famous for asking for your insurance deductible and coming in with damage just barely less than that amount? Seattle now has light rail to the airport, and so do most cities you might want to visit. Pack light and take the train, and support light rail in your area. Get a hotel that is walking distance to the things you want to see. It’s worth it in so many ways, not least in that you don’t have to do business with Budget Rent-A-Car. Drive yourself in your own car if you can. Or skip travel altogether. Too many people just hop on a plane for everything. Spring break? Birthday party? Business meeting with an important client? Why not! Long distance travel is a minefield that people treat ridiculously casually.

    By the way, I live in Seattle, and now I know to warn visitors off SeaTac Budget Rent-A-Car, not that I would be such a bad hostess that I’d let my visitors rent a car.

    Gerry

  • Tim@OKC

    I too have almost been victimized by this scam, fortunately I was able to provide documentation/photo showing that the damage pre-existed. However that was before the economic downturn, and now with profits being reduced, car rental companies are taking a much harsher stand on propogating this scam on unwitting customers. What did I learn from my experience? I have learned to not only photo the vehicle from ALL sides, incl glass, where I see damage. BUT to also note it somewhere on the rental agreement, and get the EXIT gate attendent to sign it. (as others have also said to do)
    One attendent refused to sign it, and it became a waiting game with vehicles piling up behind me at the exit gate. (not fair to those drivers I understand that) He folded after 3 other drivers became impatient and started honking, and scribbled his name on the form, but it saved me when I returned the car and they started looking for damage.
    I once had a rental company try and ding me for a mechanical repair, when there was an issue with the electrical system (car died) on a car I’d rented. They actually told me that ” when you rent a car, you become liable for mechanical repairs to it, just like to your personal automobile”.
    It’s a shame that the travel industry tries to pull the various scams that they do, all to pad the bottom line with profits. But they do.

  • Josh

    This could be solved with a few simple “consumer protection” laws — simply require that the damage claim be documented with before and after photographs. This puts the onus on the rental company to document the condition, and removes any “he said, she said” or interpretation (return agent keying on a tiny scratch that normal people, including the checkout agent, wouldn’t notice) from the process. No dated photos, no claim.

    Not that it’s not a good idea to take your own photos, but this would standardize the process and make it much more fair.

  • http://rjtalestold.blogspot.com/ Dick Jordan

    I have picked up rental cars in poorly lit parking garages (e.g., Hertz in downtown Seattle) where it would be impossible to conduct a thorough inspection of the car and photograph any existing damage, and where there is no nearby on-street parking where one could stop and check out the car before driving very far.

    These stories strongly suggest that the best approach to renting a car is not to do so at all. Take public transportation, taxis, walk, or rent a limo (probably cheaper in the longer run if the car rental companies are going to continue badgering customers over damage claims) where those alternatives work for you.

  • LeeAnne

    @Gerry – excellent post! And you hit the nail on the head: this is not an occasional rip-off by the rare unscrupulous manager bending the rules. I am quite confident that this is no less than a tried-and-true business model, well-known at the highest levels of the corporations. It’s too prevalent – and too profitable. The reality is that MOST customers roll over and pay up at the threat of collections.

    Unfortunately, some of us do still want to do long-distance travel, and need to rent cars. Personally I refuse to let criminal corporations stop me from doing what I love – which involves frequent travel to far-away locations, often requiring car rentals. (I’m a scuba diver, and I can’t exactly carry my scuba gear on public transportation.) If we curtail our travel and inconvenience ourselves to avoid crime, then the bad guys have won.

    My solution is to not give in – either by allowing them to steal my money, or by reducing my travel to avoid the possibility altogether. There are numerous suggestions in this blog and on other travel sites on what to do to avoid this particular scam. Keeping up with the latest trends of travel scams will keep you informed, and aware of how to protect yourself.

  • Christian

    Just a thought. All of these rental places resell their rental fleet after using the cars for X amount of mileage. If they can get an unwise traveler to pay for damaged body work before reselling these cars then the price that they resell them for is significant higher.
    You just wonder if this is built into their business plan. I did a quick look on Kelly blue book and there is roughly a 10% value difference between good and Excellent. That is huge when you look at the size of their fleets.

  • Scott

    I work in the insurance industry, and have had personal experience with Budget Rent A Car (who is owned by Avis if you want to know). Not only do these companies scam the renters, they also attempt to scam the insurance company.
    They submit repair bills, which is our first notice of claim, well after the fact, so as to not give the insurance company the right to inspect the damage. Then they pad their bill with “diminished value”, “loss of use” and “administration fees” That $750.00 bill comes out to be over $1,500.00 by the time it gets to the adjuster’s desk.

    If the insurance company refuses to pay, they go after the customer. Not legally, where their actions would be laughed out of court, and the insurance company can provide a defense. They are afraid to go to court, as they would be forced to disclose how little they pay for the vehicles, and how poorly they repair them. They go after the renter on their credit report. They attempt to ruin the customer’s credit. They even tell the customer “Make your insurance company pay the whole thing or we will simply turn it over to a collection agent and it will be put on your credit report”

    Budget is not the only company who does this. I have also seen Thrifty and others do the same thing. Enterprise is not quite the same. The reason for this is that Enterprise makes 80% of their profits from “insurance replacement” rentals. When you are in a wreck, your insurance company will place you in a rental, usually though Enterprise. They are the largest insurance replacement rental company out there. They need to stay on the good side of the insurance industry, otherwise we would simply quit using them. (And when you are a State Farm or Allstate, and you quit using a rental company that makes it’s money from insurance replacement, the rental company loses millions!)

    The rental company wants you to buy their “insurance”. They get 2 times the rental price in pure profit, and any damage is either not fixed, or poorly repaired so it doesn’t show. Then they turn around and sell that same rental car as ” Lease return”… to an unsuspecting customer.

    As has been previously mentioned here, your best defense is to document any damage prior to leaving the facility. If the rental agent doesn’t “have time” ask the agent’s name and then demand to see the manager! Spend 2-3 minutes walking around the car. Bend down and look along the edge of the hood, trunk and roof for hail damage. Check for rock cracks in the windshield ( from the inside, where they are visible). Look under the bumper in front to see if it has been run up onto the wheel stops in the parking lot. Look for cigarette burns and cuts in the seats ( front and back!). Make sure that the damage is noted on the contract and that you are handed a copy of the contract with the damage noted. If you return the vehicle with damage, make sure that the damage is noted on BOTH your copy of the contract and their copy of contract.

    I don’t worry much about mechanical problems. If the rental company rents me a vehicle improperly maintained, I believe I have a strong case for their breach of contract. Mostly worry about the cosmetic damage. Photos of the damage is a great idea.

    2-3 minutes of your time when you rent the vehicle could save you hundreds or thousands of dollars. It could save your insurance company money, your deductible and even prevent a raise in your premiums.

  • LeeAnne

    I’ve written about this incident before in similar articles on this blog, but it seems appropriate to trot this story out again…

    I was at an Avis rental agency near Rome several years ago. I’d asked the attendant to do a pre-check and report before I left, but he refused. So I snapped pictures of the entire exterior of the car, including some noticable scratches on the trunk, and went on my way. When I brought the car back, the attendant pointed out those very same scratches and told me he was going to have to file a damage report and charge me for the repair. I smiled and told him to get his manager. The manager came over and began insisting that I was responsible for the damage, and would have to pay. I just laughed and whipped out my digital camera, showing him the photos of the car IN the lot (date-stamped on the day I picked up the car).

    He began sputtering, and stalked off without another word. I never heard from them.

    It was one of my most satisfying travel experiences! ;-)

    This was several years ago, tho…it’s important to note that these days, more often than not they won’t even bother with notifying you when you drop the car off. They just slap you with a bill, sometimes weeks after you’ve forgotten all about that trip (and deleted any photos). Lesson: SAVE all your pre-rental photos! I always download them to my computer now, in a folder for each date that I rented a car. So if I ever get hit with a bill after-the-fact, I’ve got my proof. At this point I’m actually looking forward to it happening again – I think I would have a case for suing them for knowingly attempting to defraud me!

  • kiki d

    i am actually taking very careful notes of all these comments, as i just found out i have to go the mainland in april and will need to rent a car for the first time in a decade…ugh, times have sure changed. :(

  • Sarah Di

    With a video feature on most digital cameras today, I’d not only take pictures with date stamps, but I would also take video of any pertinent information, such as the attendant refusing to do a damage check for being too busy. That way if, when you return the car, they say that they always do a damage report before the car leaves the lot, you have proof that they refused. Or showing them that you are taking video of the refusal, might prompt them to do the damage check. Plus, it would be highly amusing to see the reaction when you returned and they were caught in the act.

  • J P

    It is definitely a great idea to take pictures of both the outside and inside of your rental if there are any damages. I would also recommend that after you take the pictures, take a picture of the odometer. That way you have the time stamp on the photos as well as the mileage of the vehicle at the time of rental.

  • Joe Farrell

    its even easier solved -

    when Budget calls – you claim – Not my damage – prove the condition of the vehicle when took it out and checked it in. “I dispute that I owe you anything and contend I owe you nothing.” Keep that story.

    when the collection agency comes calling – “I owe your principal nothing. I dispute the entire amount of the charge. I will not pay you or your principal and I invoke all rights under the fair credit billing and collection Act. do not contact me any longer. If you sue me and lose, you will be liable for my attorneys fees. If you inaccurately report to any credit reporting agency, you will be sued for defamation.” I usually add – Choose carefully, a $755 debt for which you get to keep $400 if you are successfuul is not worth $10, 20 or $50k in attorneys fees defending yourself.”

    When and if anyone sues you, immediately upon receipt send out a notice to produce. You want all documents relating to the vehicle since delivery. EVery rental, every damage record, every report. Documents include photographic records, such as cameras covering departure corridors. Interrogatories [questions they need to respond to under oath] are ‘list every rental in the 12 months before and 12 months after.’ You want to contact these people BEFORE your rental to see if they remember any damage.

    If someone from Budget shows up to testify without a lawyer – object. Corporations cannot represent themselves in most states small claims court – they need a lawyer. Read the local rules of court or ask a clerk, they often can tell you those rules even if they cannot provide legal advice. If the collection agency shows up – object- they have no direct evidence of anything – its hearsay. Make sure before you start there is a court reporter taking down everything – if there is no reporter and no tape – ask for one. Judges and lawyers acting as judges will be less inclined to just move things along if their decisions are being recorded.

    Carver – jump in here for anything I’ve missed. If you cost the company enough time and money they will eventually go away. Be sure to check your credit history regularly however.

  • Linda Snow

    Horrible stories and great useful suggestions in this discussion. I did notice that no one mentioned being scammed by National car rental. I used them for many years because my employers had a preference for them, and continued to do so after I retired. I never experienced any kind of damage scam from them.

  • RaeA

    It seems to me that it’s past time for legislation protecting car rental customers that’s along the same lines as the Federal Fair Debt Collection Practices Act.

  • Gerry

    @Joe Farrell, can you go to small claims court to stop Budget’s collection goons from trashing your credit report? Aren’t those kinds of demands classified as “equitable remedies,” requiring a trip to Superior Court?

    That’s the real problem with the whole debt collection extortion racket. Their position is: “Pay up, or we mess up your credit rating.” And if you want an injunction, you have to pay for a lawyer, which, as you have pointed out, is far more expensive than just paying the protection money. It is also often impossibly difficult to get representation for little cases.

    Any advice?

    Gerry

  • Joe Farrell

    if a collection agency ‘trashes’ your credit rating and what they say is false factually, and you following the rules [meaning you told them in no uncertain terms you owed them and their principal no money] then you need to find a lawyer to sue in a court that can award damages a little bit higher than small claims court. The cost to repair your credit rating and the increased credit costs in the future far exceed small claims jursidiction levels.

    I cannot give you legal advice – so you need to find a lawyer – but generally speaking – tell budget or their collection agent you owe them nothing – and if you agree you owe them something – pay them the something – and dispute the rest.

  • Dorothy Rice-Lara

    Good afternoon everyone, My mistake not taking pictures and trusting a company employees word. My insurance company as well as I requested all records on this car but they refused to work with us. I had no proof that the damages were prior. Someone mention lawyer, I have talked to a lawyer and advice that it would cost more to hire him then the claim itself and even if I took them to court it would take years and without proof of prior damage I don’t have a leg to stand on and his advice was free. This occured back in May and both my insurance company and I been fighting it with the collections agency until I came accross this web site. The issue here is that Budget and the collection agancy does not communicate with each other. The collection agency had no proof that my insurance company made a payment. To be honest I value my credit rating as it is excellent and having experience identity theft it took years to clean up that mess and just not worth it. So word of advice learn from your mistakes, and take pictures. Oh by the way I didn’t have to pay that $179.00 of administration fee and 3 day car rental that Budget try to get out of me.

  • http://www.money4uinagreement.co.uk/ Claim any extortionate charges on your credit agreements

    I cannot give you legal advice – so you need to find a lawyer – but generally speaking – tell budget or their collection agent you owe them nothing – and if you agree you owe them something – pay them the something – and dispute the rest

  • http://www.money4uinagreement.co.uk/ Kind Regard

    That’s the real problem with the whole debt collection extortion racket. Their position is: “Pay up, or we mess up your credit rating.” And if you want an injunction, you have to pay for a lawyer, which, as you have pointed out, is far more expensive than just paying the protection money. It is also often impossibly difficult to get representation for little cases.

  • http://www.singleinthe011.blogspot.com Lauri

    I wanted to comment on this before I deleted the bookmark. I was involved in a fender bender between my car and a Budget Rental car on President’s Day. It was snowing heavily and the police didn’t come. I contacted my insurance company who ended up denying Budget’s claim. Three months later, I received notice from a collection agency. I referred her to the claim adjuster. A couple days later, I followed up with the adjuster. She said they had not contacted her and was upset that they would contact me. She followed up with Budget and the collection agency to receive confirmation. I couldn’t believe they would have the nerve to think I wouldn’t know that if the insurance company denies the claim I don’t have liability.

  • http://www.facebook.com/msfincannon Katy Fincannon

    I was recentley in a wreck that involved a budget moving truck and they are dragging out the days that they will get me a rental car because the budget truck was at fault.  It’s been 5 days so far that ive been with out a car. Rediculous budget is just an aweful company.