Allen Friedman says he declined the optional insurance when he rented a Chevrolet Impala from Dollar Rent a Car at Denver International Airport recently.
So when Friedman, a retired dentist from Sarasota, Fla., returned the vehicle a few days later, he was surprised to see an extra $215 for insurance and $53 for “roadside assistance” added to his bill – charges Dollar insisted were legitimate because it said Friedman had signed an agreement asking for the additional coverage.
Friedman’s complaint is the basis of a lawsuit brought against Dollar in federal court in Colorado by lawyer and consumer advocate John Mattes, who says hundreds of other car rental customers have faced similar fraudulent charges.
Dollar says that the claims are without merit. “We deny the allegations and intend to defend the case vigorously,” says Anna Bootenhoff, a company representative. The company declined to answer questions about Friedman’s bill.
But according to the lawsuit, which is seeking class-action status, the rental company brushed Friedman off with a form response. When he disputed the charge on his credit card, Dollar wouldn’t budge. It showed his credit card company a signature that it claimed was his. When Friedman finally obtained copies, he realized that his signature had been forged, Mattes alleges in the complaint.
Friedman eventually got his money back after his credit card company sided with him and reversed the charges. But others aren’t so lucky. Mattes says he has a file of complaints from other car rental customers who verbally opted out of extra services but then found them on their final bill. Faced with a form-letter rejection from their car rental company, they gave in and paid up.
“I truly find it difficult to believe that anyone would forge a signature – ever,” says Sharon Faulkner, the executive director of the American Car Rental Association, a trade group. As a former owner of a Dollar franchise, she says no one ever accused her employees of forgery, although some customers complained that they were sold something they didn’t want.
“If the renter was truly upset and apparently confused about their decision, I would reduce their rental so they were satisfied with their final bill,” she told me. “If it meant either removing coverage they realized they did not want or reducing their rental fees to make them return again to do business with me, then I always decided that was more important.”
What’s the source of this conflict? Mattes says it has to do with how companies make money and compensate their employees. Like other travel companies, car rental firms derive a significant portion of their profits from “upselling” optional services such as insurance, roadside assistance and fuel-purchase options. Car rental employees, he says, are often paid the minimum wage but offered a generous commission – as high as 12 percent – from the sale of those extras. That gives employees an incentive to strong-arm customers into taking the insurance and, if they don’t, to forge their signatures, he says.
“Insiders have told me that if employees fail to obtain an average level of upsells per month, they may be terminated,” says Mattes.
Those allegations aren’t new. This class of dispute, which I call the “sign here” scam, was plaguing car rental customers when I started mediating travel disputes, in the 1990s. Back then, car rental customers were issued contracts printed by a fuzzy line-printer and were told that the contact was the same one they’d agreed to when they made their reservation. Only later would they find out that they’d initialed the square to buy insurance they didn’t want or need.
In recent years, technology has made this ruse even harder to detect. Contracts today often are signed electronically, through a touch pad at the counter. That favors the car rental company, which could conceivably forward any e-signature to a credit card company that’s contesting a charge. (And if Friedman’s allegations prove to be true, they have.)
Most frustrating, perhaps, is that even if Friedman prevails against Dollar, the effects on consumers would be minimal. Car rental firms are routinely fined by courts for consumer-unfriendly practices, but because the industry is not federally regulated, it can ignore any ruling except in the state in which it’s made.
As the case against Dollar notes, this is not the first time the company has been accused of deceptive sales practices. In a 1989 California case, Dollar was accused of instructing its workers to aggressively sell optional products in return for high commissions. An appeals court sided with consumers.
Until the federal government – either by legislation or regulation – steps in to put an end to these “gotchas,” they are likely to continue, even if Friedman wins his case. In the meantime, you can benefit from the artificially low car rental prices subsidized by drivers who are talked – or tricked – into buying services they might not need.
Always read whatever you sign. Otherwise, you could end up in court.