No damage to rental car, but they called a collection agency anyway

Richard Hartman rented a car from Alamo in Montreal this summer. It’s a decision he regrets.

“When I returned their rental car on June 21st, the Alamo staff reported no damage after their inspection but,” he says. But a few weeks later, the car rental company changed its tune. It now claimed he owed $646 for damage to his car.

That isn’t unusual. Damage to a rental car can be assessed after the vehicle is returned, but it’s not a best practice. Ideally, the dent or ding would be IDd before the customer leaves the car rental facility. And that’s usually how it’s done, according to rental customers I’ve spoken with.

Hartman explains,

Their Damages Recovery Unit has received my numerous voicemails, print letters, phone calls and emails disputing their claim for $646 in damages that never occurred when I used the car.

Based on my information, my credit card company has stopped payment on their billing of Aug 7th and Chase Visa told me that Alamo was going to enter a credit to erase this debt.

OK, so he vehemently denies damaging the rental car, his credit card is siding with him, but Alamo has insisted on taking this rental car case to a collection agency.

Not good.

Related: In today’s edition of Is this a scam?, find out if Imagine That Vacation is the real deal.

Making matters worse, the paperwork from Alamo on this rental is confusing. He explains,

I have a letter from Alamo dated Oct 7th that states that I owe $0.00.

Alamo responded on Oct. 26 stating I still owe $646 and on Oct. 24 I got a dunning notice from their collection agency with the notice that an unpaid balance will accrue interest of 19.5 percent per annum.

That looks as if one hand doesn’t know what the other is doing.

Let’s hand the mike to Alamo. When I asked about Hartman’s case, here’s what a representative told me.

We have reviewed – and re-reviewed – this matter, and our conclusions remain the same:

· The damage was not on the original inspection sheet.

· The damage report was written immediately.

· The damage was significant enough to have not been “missed” when the car was rented.

Furthermore, the customer was advised of our decision and kept informed throughout the claims process (up to being sent to a collections agency).

Unbelievable. I feel as if I’m mediating two completely separate cases. And yet they are one and the same.

I’m almost certain that someone is bending the truth, but who?

Is it the renter who maybe glossed over the fact that the damage was noted when he returned the car? Or is it the car rental company, which might have a paperwork problem?

I don’t know.

At this point, I start to feel like one of those poor souls in the 1981 horror flick Scanners. My head is about to explode.

I’m tempted to slide this into the “case dismissed” file because I can’t really figure out who’s telling the truth. Fortunately, I don’t need to.

Alamo adds,

The customer sincerely seems to believe there was some sort of misunderstanding. As a result, we are closing this claim, and hope that you and he understand we are putting his customer-service concerns first.

Ah, I love a happy ending. But was this the right ending?

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at . Got a question or comment? You can post it on the new forum.

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  • LeeAnneClark

    Of course they should have dropped their claim. It was undoubtedly fraudulent. This is a well-known scam, and given the number of times rental agencies have pulled this exact scam, there is not a doubt in my mind that Mr. Hartman did not damage that car, and Alamo is once again just trying to extort money from an innocent customer.

    The only reason they are dropping this claim is because they got caught at it by you.

    The only comment I might offer is that Mr. Hartman should have taken the necessary steps to protect himself: photographing the entire vehicle both at pick-up and drop-off. I do this every time I rent a car, and one time I was able to use these photos to prove that the large scratch on the trunk they wanted to charge ME for was already on there when I picked it up.

    Keep up the pressure, Christopher. Keep writing about these scams. The more travelers are aware, the more will take the necessary steps to protect themselves…and the rental agencies will no longer be able to use fraudulent damage claims as a profit center.

  • y_p_w

    I’ve never had an issue with a rented car, and that includes cars that had minor scratches when I picked them up, but weren’t noted because they were considered too minor.

    I’m almost too terrified to rent a car now after hearing about all these “damage claims” that have gone well after the return or any chance to explain.  There are things like light scratches that might be covered by dust or mud.  For the most part I’ve experienced cars that were mildly scratche up, but where the employees didn’t care enough to list it when picked up or returned.  It almost seems like these days they’re looking at damages as some sort of additional revenue stream, where I guess they can later sell the vehicles for a higher price when used.

  • Elmo Clarity

    Of course they are dropping it.  If they wanted to go forward with it, and it ended up in court, all Mr. Hartman would need to do is present the letter from Alamo stating that he owed $0 (letter dated Oct 7th) and the case would be over.  He has proof that Alamo has stated the account has been settled.

    This is just another reason *NEVER* to rent from the National family (I believe Alamo is part of that dysfunctional family.)  I also find it a bit ironic/humorous that right next to the comment block is an ad for Alamo.  I’m sure it was triggered by topic of the story.

  • emanon256

    Thank goodness Chris.  I got scared reading your article when you mentioned it might go to the case dismissed file.  I am glad Alamo finally did the right thing.  But this scam seems to keep happening more and more often and I feel sorry for the poor people who are not aware of you and can’t do anything about the rental car companies.

  • Chris in NC

    Who knows.

    Personally, I do not have good experiences with Alamo, especially with some of the franchise locations. Why do I have the suspicion that the location Hartman rented from is a franchise location?

    Alternatively, it is possible that an employee damaged the car after Hartman returned it (ie driving it to the car wash) and tried to pawn the damage onto Hartman.

    I am also deeply disturbed by the increasing practice of travel providers calling collection agents after receiving a chargeback when losing a credit card dispute.

  • tomRI

    Like LeeAnne, I was in Oslo and had the same problem, but they do not inspect the car with you before OR after drop off — they are inside the airport building so they do not even see the car.  I took pictures of the before and they took pictures of the after along with a bill for $1600.  I sent them my pictures of the before and told them it was there to begin with and if not hen it was covered under the CDW that I was forced to buy there.  Good thing i closed my credit card once in returned to the states. 

    Take pictures before and after and mark every area on that sheet with scratches because they are there — we do not all have our microscopes on when we pick up the car but they have them on when they we drop them off.

  • cjr001

    “Ideally, the dent or ding would be IDd before the customer leaves the car rental facility.”

    No, it should be mandatory.

  • cjr001

    Don’t allow yourself to be terrified. But everybody should be prepared and vigilant against this possibility of this happening to them.

  • john4868

    Chris… Winning or losing a credit card dispute isn’t about the merits of the underlying issue. Its only about whether the merchant followed the procedures outlined by the credit card company and if they had authorization to charge the card.

    In this case, he may have argued that he didn’t authorize the charge and Alamo couldn’t provide the evidence that he had. It doesn’t change that he may or may not have owed Alamo the money.

    Having listened to Alamo’s side and not jumping to the “all rental car companies are evil” mantra, I’m not sure who is telling the truth but someone isn’t. I do know that I have been told by rental car company employees that they know of situations where other employees have damaged vehicles after turn in and blamed the previous renter so it could be an Alamo employee.

    It was probably cheaper from Alamo to drop the claim since the media was involved.

  • sirwired

    Damage noted AFTER the customer has a receipt printed by a returns employee is simply not collectible.  Not a single court in the land is going to enforce such a “debt.”

    The time to note any additional damage is when the keys are handed over the counter.  Period.  End of story.

    This seems like a situation ripe for consumer protection legislation by states.

  • Linda

    TAKE PICTURES BEFORE YOU LEAVE THE LOT!  i have rented cars in Europe and in the USA and my camera phone always takes pictures and I make sure the agent sees me doing just that!  Enough, already!

  • BlondieDC

    Take photos of every inch of the car with your cell phone.  Hang onto them for 90 days.  Having to deal with this sort of thing is just crap!  If a car is damaged, the rental agency needs to make the customer aware when it’s dropped off.  Period.

  • Carver

    I agree.  I’m certainly not on the all rental car companies are evil bandwagon. However, in this case, the facts and implication are with the OP.  Two things jump out.  The first is the zero balance letter sent months after the car was returned and Alamo’s claim that the damage was noted at the time of the return.

    I am very skeptical that the OP would lie about receiving a damage report.

  • scot2512

    I too have had issues with the “National Family”  Because there was no indication on the vehicle, I put gas in a deisel van.     Normally there is a sticker by the gas tank but it was missing and no other documentation.     Despite the fact I had a signed release from the location three weeks later they tried to charge me $800.00 damage.    It took a couple of months and several phone calls, emails etc., between myself, credit card company and car company in Europe but I finally won.   I couldn’t believe they persisted despite the signed form saying “Customer not at fault” 

  • http://www.pipdigital.com Nancy Dickinson

    Since I started reading this column, I now make an issue of taking photos with either my phone or camera every time I rent now and I always make it an obvious thing so the employees of the rental agencies see me doing it.

    My husband, on the other hand, does all his renting through his company and just hops in and goes.  This bit him in the behind a few months ago when he was contacted by his employer and told they got a damage claim and he had to pay it and asking for his insurance information.  It was a total front-end wipe out and there was no way he could have done it and not known it.  His company fought the claim after talking to him and the rental agency dropped it, probably because it was fraudulent against my husband’s employer and they didn’t want to lose a large customer.

    He now takes pictures with his cell phone.

  • Carver

    Damage noted AFTER the customer has a receipt printed by a returns employee is simply not collectible. Not a single court in the land is going to enforce such a “debt.”

    Unfortunately, that’s not true.  The rental car company simply needs to provide credible evidence as to why the employee missed the damage.

  • Chicky

    Photos, photos, photos. Take ‘em, people. I’ve mentioned here before that I usually take my photos at the gas station while I’m filling up — mostly because the car is generally in daylight and everything will show up. If you do this, ALWAYS make sure you get the license plates in the photos, which will help substantiate any claim you make. If your phone has video capabilities, then just use that and walk around the car. And as other posters have said, keep the photos for a while, both on your phone, and saved on on your computer.

  • Mark K

    Closing your credit card account does not prevent legitimate charges from still being billed to you.  Your credit card company can report you to credit bureaus or send your bill to a collection agency if they want.

    Of course the charges being discussed here can be proven to not be legitimate.

  • jim6555

    You say “never rent from the National family”. That doesn’t solve the problem since he same scam is used by all of the car rental companies, including Hertz and Avis. 

    My guess is that the damage scam problem is the result of the car rental companies putting pressure on location managers to produce more revenue out of each unit rented. Even if the manager has the best counter people that can be found, it is almost impossible to convince everyone to purchase very expensive insurance packages or to upgrade from a compact car to a Cadillac. The station manager who wants to keep his/her job realizes that charging for damage that is pre-existing or non-existing can add thousands to the location’s bottom line. 

    To the local managers, it’s just a way of making sure that they keep their jobs and earn bonuses. To the rest of us, it’s a scam that needs to be eliminated by the car rental industry. 

    If the rental companies refuse to act, phony damage claims need to be made a criminal offense under Federal law.

  • Mark K

    I completely believe that Alamo was trying to recover for damage done by its own employees or another renter who bought the damage waiver.  

    Exactly what the damage was that Alamo was charging for was not stated, and it is possible that it was damage to the underside of the car that may not have been noted immediately because the return agents do not crawl under the car.  However, waiting weeks to send the notice and then sending a letter saying zero was still owed followed by the collection notice shows me that Alamo has internal issues that need to be addressed.  They dropped the claim because of the bad publicity and will probably charge the next renter for the same damage.

    Alamo used to be one of my favorite rental companies because they seemed to be more forgiving of nicks and scratches.  But no more.  Since they were bought by National everything changed and I avoid them like the plague. 

  • Mark K

    I agree.  And phony claims should include repeated claims for the same damage paid by multiple renters.

  • Tom

    Also try to include the current front page of a local daily newspaper (prop it on the bumper, etc) when taking your pics before returning.  That saved me from a supposed damage charge as the company initially claimed I could have taken the pics anytime, not necessarily just before returning the vehicle.  Paper proved the date of the pic showing no damage.

  • john4868

    Carver… Zero balance letter could have been sent after they charged his card but before the cc chargeback was noted. In that case, he would have had a 0 balance at the time the letter was printed. He would have had a balance as soon as the chargeback hit his account. This would be a very easy argument to make in court and a reasonable explanation.

    Because of this, I saw the 0 balance letter as having little to do with the merits of the argument from either side.

  • Elizabeth

    Thanks to all of your posts on this issue, I was smart enough to take photos of my recent car rental (and I had rented a Challenger, not a cheap car to fix), and had no issues.  There might not have been issues anyways, but I am glad to have the knowledge with which to arm myself with as a preventative measure.  

  • Linda Tomberlin

    The claim may have been true, but because Alamo screwed up, they should have dropped the claim.

    Again, renters, photograph the car at pickup and drop off!!!

  • Sharonmargret

    I think I would also take a camera shot of the odometer.

  • MVFlyer

    Notice how it takes “a few weeks” after the OP returns the car for the rental company to send him a bill?  Would they (honestly) tell you how many times the car was rented out subsequent to his rental?

  • Rarnold2000

    If, as Alamo told you, “the damage was significant enough to not have been ‘missed’ when the car was rented,” then how could Alamo have “missed” it and not included it in the report when the car was returned?  The answer?  It’s clearly a scam.

  • Zedp3

    My one and only experience with renting a car in Montreal (with another major name brand) was incredibly “shady” vs. any experience in the U.S. – forcing me to take insurance that doubled the price of the rental, because I didn’t have printed proof of third party insurance (and they said they wouldn’t accept a fax from USAA, my insurer). Then to top it off, I had to wait nearly three hours for a car because they had no cars – this was at YUL, mind you, not a tiny office – and didn’t want to take a 15 passenger van for the week!

    So, I am a big fan of Canada but I can’t tell you if the car rental regulation there is looser or if it goes by province or what…

  • Bodega

    We rented a car in DEN a few weeks ago with Hertz and we are both Hertz Gold members.  Because of concerns addressed here, I filled out a prerental form on dents and scratches, which I never have before until a prior rental.  I noted them all over the car to cover myself as shown to me to do by another Hertz employee on that prior rental.  The gate agent accepted it and off we went.  Upon return we were directed where to park the car and it was very tight getting out due to the car parked next to us.  We were very careful getting out and stood waiting for the attendant. When he arrived he quickly opened the driver’s door, to get the mileage and slammed it into the car next to it. We noted a chip in our door afterwards.  It made me think about how employees handle these cars after we drop them off and protecting yourslef from a claim by the rental car company afterwards.  

  • Joe Farrell

    This one is sooooo simple – when a collection agency gets called:

    You must send a letter in a format that acknowledges receipt – be it a fax, delivery confirmation letter- something.

    That letter states:

    “I dispute that I owe you or your principal anything.  I claim that I owe nothing. 

    “If you contend I still owe you money, then please send me, within 10 calendar days, copies of all documents upon which you base your claim for money.  If you fail to send all documents within that time period, I shall conclude you have waived your right to payment.  Failure to send all relevant documents, receipts and other information shall be construed as an attempt to actively conceal information concerning the debt.

    “Further, demand is made for copies of all documents related to the rental of the vehicle for which a claim is being made at any time subsequent to my rental.  This means rental contracts, vehicle condition forms, and any materials pertaining to rentals subsequent to the transaction as I contend this is a fraudulent claim and these documents are necessary to prove that this claim you are seeking to collect is fraudulent.  I remind you of your obligation as an agent of your principal that you cannot attempt to collect a fraudulent debt with co-liability for that attempt.

    “I invoke all rights under the Fair Credit Billing and collections Act, request that you not call me concerning this claim and that all communications be in writing.  Further, if you attempt credit reporting you are required to state the fact that I dispute the full amount of the claim and contend the debt is fraudulent and no a valid claim, and that I owe nothing.”

    I’d be REALLY surprised if you ever hear anything from anyone –

  • Marvin

    This is really a sugggestion for Chris Elliott:

    This subject has come up in your blog a number of times; sufficient for you to recommend a modus operandi for your readers… or perhaps readers can suggest some defensive measures.

    Allow me to begin:

    With a digital camera set to record the date and time, take pictures of various views of the car, particularly noting existing dents and scratches.  When doing this, stand far enough away (perhaps in another shot) to show the location of the scratch/ding, and another close up.

    Mark the defect on the contract margin and ask the attendent to initial your remark.

  • http://elliott.org Christopher Elliott

    Great suggestion. Maybe I’ll do a series on this.

  • Joe Farrell

    PS:  Charging interest without an agreement to do so – and at 19.5% – probably violates the usury laws of most states, as well as federal regulations.

    I love these collection agencies. . . .  I had one actually sue me for a credit card debt of my mothers [not for necessaries] in a state without a reciprocal duty of support law that applied to parents.  Anyone can claim anything they want – but actually collecting it is another issue.  You see, Alamo cannot charge 19.% interest on its claim without a written agreement specifying the amount in a certain type face and identifying the amount charged. 

    Anyway – folks – the photographs are great but why can’t Alamo simply produce the documents they claim exist?  They make all these derivative claims – show us the real documents with their damage notations on them and then the rental log of the vehicle – if they rented it again – they are toast. 

      

  • y_p_w

    Well – if a bumper needs to be repainted because of a couple of scratches, it costs about the same to repaint it with over a dozen scratches.  I would think that legally a rental company is supposed to take a car out of circulation for repair if they charge for damages.  If they just issue the same bill to multiple renters who contributed to requiring the same repair, then that’s out and out fraud.

    I could understand why a car might not be taken out for cosmetic damage, if the location is short on cars.

  • y_p_w

    Might be due to dirt, mud, etc covering up any damage.

  • Chris in NC

    No, car companies aren’t evil. Due to my travels, I have to deal with car companies on a regular basis. Unfortunately, you have to pick and choose who you rent from carefully. I go out of my way to rent from CORPORATE locations and avoid FRANCHISE locations whenever possible. Does this guarantee that rentals are trouble free? No, but corporate locations seem to behave by the book.

    Personally, I have not had good experiences with Alamo. The final straw was not some petty issue, it was something serious enough that made me send letters to corporate headquarters to register the complaint. It also takes a lot (not something petty) for me to personally blacklist a company.

    I will add that I don’t believe that Alamo corporate is dishonest, nor is there a policy or conspiracy to bilk renters from damage. I do believe that some franchise locations are dishonest, and that corporate doesn’t have the resources or is afraid to go after the bad apples.

  • Chris in NC

    @jim6555:disqus In my experience it seems to be more of a franchise vs corporate location rather than a company specific policy.

    As in my previous post, I go out of my way to go to a Corporate location. Seems better managed, better run and less irregular behavior

  • Chris in NC

    One other thing, when I return a car, I get a photo that includes the employee checking in the car. I also make it obvious that I am taking photos of the car.

  • Chris in NC

    Take a picture that includes the employee checking your car in!

  • Mark K

    There is no legal requirement that damage paid for has to be repaired.  This is the same if it is a corporation or an individual person being paid for the damage done to their vehicle.

    However, if a person makes repeated claims to get the same damage repaired by different people and just pockets the money it is considered fraud.  While it is apparently just considered normal business when a corporation does it.

  • Jack in NW Wyoming

    After reading your comments I remembered an incident with a Thrifty franchisee in my area.  Apparently Chris picked it up:

    http://www.elliott.org/blog/a-chipped-windshield-scam/

    The last few times I’ve driven by this place they seemed to be closed.

  • Powergirl

    Joe – are you an attorney?  Because I will cut & paste this and keep it in my file.  We are off for Thxgiving and I’m terrified of renting a car.  Even if you win out in the end, it seems like such a tremendous waste of time and energy and stress!

    We just signed up with AMEX for their insurance program.  Has anyone ever used it and is it worthwhile? 

    Thanks.

  • jim6555

    Also make certain that at least one picture includes the license plate to prevent a lawyer for the rental company from asserting in court that your pictures could be of a vehicle that is not the one that was rented. 

  • jim6555

    Chris in NC, many of the incidents that Chris Elliott has reported on have occurred at airport locations in major cities. I doubt that major car rental companies sell franchises at busy airports like LAX, ORD, ATL or JFK. They will keep these very lucrative locations for themselves.

  • Elmo Clarity

    Jim, while it may occur at other rental companies, if you go back and look at all the stories Chris has dealt with on this blog concerning this, there is one company that stands out, and that is the National Family.  And as others have mentioned, it is more a franchise vs corporate issue.  But I still blame the corporate for it because they hear about all the claim challenges and yet don’t seem to do anything to rein in the out of control locations.

  • Elmo Clarity

    But isn’t that what the rental companies do?  Since they have so many cars that are identical, they just take a picture of the same model/color car you rented and say it was yours.  But what about the license plate being in the picture?  You know how long it takes to detach the plate from one car and put it on another?  Yeah.  Not long.  Get pictures of the VIN tag.  That one is not so easy to switch.

  • Carver

    Possibly.

    Although the chargeback occured 2 months before the letter was printed so I am skeptical.

  • cjr001

    And yet, seeing how the rental companies are always dropping these claims when called out on it, they apparently rarely have credible evidence.

  • Russ

    I always make them note all scratches / dings even when they tell me that it does not matter if the size less than a quarter.  I also take pictures.  I rented 1 car in Sarasota FL with drop off at Miami.  The car had many scratches / dents and I had them note them all on the paperwork when I picked up the car.  It came in handy as when I dropped it off in Miami, they immediately wanted to claim damages, till I showed them the forms from the pickup point and the photos.