California Attorney General Xavier Becerra, with Alameda County District Attorney Nancy E. O’Malley and San Mateo County District Attorney Stephen M. Wagstaffe, announced a $4.6 million settlement involving Advantage Rent A Car and its affiliate E-Z Rent-A-Car (Advantage) following a multi-year joint investigation into violations of California’s consumer protection laws. The settlement – incorporated into a stipulated judgment which also includes comprehensive injunctive terms to prevent future misconduct – resolves allegations that Advantage frequently charged its customers artificially inflated prices for rental vehicle repair.
“Advantage and its affiliate caused real economic harm to California consumers, who naturally assumed that the repair bills they received were accurate,” said Attorney General Xavier Becerra. “This settlement ensures immediate relief for hundreds of Californians, and sends a strong message to companies to abide by the law.”
“We all know how frustrating it is to accidentally damage a rental car. If you happen to do so, you should not be charged an excessive amount to repair the car or need to worry about whether the cost of repair work is being used to generate revenue. My office is dedicated to protecting consumers from practices of this kind,” said Alameda County District Attorney O’Malley. “We are committed to seeing all of California’s consumer protection laws enforced.”
“California law protects consumers from being overcharged for rental car damage by requiring rental companies to pass along discounts on damage repair to the renter. My office is committed to working with my fellow District Attorneys and the California Attorney General to enforce these laws,” said San Mateo County District Attorney Steve Wagstaffe.
Advantage rents vehicles to the public at a number of California locations, and sometimes those vehicles are returned damaged. The complaint alleges that the Advantage billed customers for the damages based on third-party estimates that were often higher than the cost that Advantage actually paid for the repairs. California law requires rental car companies to pass along these discounts to consumers, but Advantage failed to do so.
The complaint further alleges that these unlawful business practices originated at E-Z Rent-A-Car and were then adopted by Advantage following the merger of the two companies in June 2015.
Under the terms of the settlement, Advantage must pay $1 million in restitution to affected consumers and a total of $3.6 million in civil penalties and costs. The settlement also includes a permanent injunction that prohibits Advantage from charging excessive fees in the future. Advantage must also appoint an executive-level employee whose responsibilities include ensuring compliance with the terms of this settlement and stipulated judgment.