Car rental company Hertz will be paying customers after the company wrongfully accused them of stealing cars that had been legally rented.
The Associated Press reported that Hertz claimed a glitch in the company’s computer systems led to cars that had been rented, being reported as stolen.
CNN reported that the company did not record rental extensions, said customers did not pay, did not track vehicle inventory and did not correct false reports to police.
Hertz CEO Stephen Scherr told CNBC earlier this year that one of the first things he did when taking over the company was to fix the problem.
“We have changed our policies to avoid the possibility of this happening again,” Scherr said. “No one customer should be put through that.”
Customers used social media and news programs to share their accounts of being arrested or stopped at border crossings after Hertz reported them to police for stealing cars that they hadn’t taken illegally, The Washington Post reported. In most cases, the cars had been paid for and returned weeks or months before the arrests or had never been rented.
In one case, Drew Seaser, a real estate appraiser from Colorado, had an arrest warrant in his name and was put in jail for more than 24 hours after Hertz said he rented a car in Georgia. Seaser said he had never been to Georgia and had not rented a car. He was released and the charges were dropped after his lawyer showed proof that he had an alibi, CBS News reported.
Earlier this year, Hertz told CBS News that the company has more than 25 million rental transactions each year and that 0.014% of them are reported to the police when the renters don’t return the vehicle and Hertz has exhausted all attempts to reach the person.
The settlement takes care of 364 pending claims and would bring an end to 95% of the pending theft reporting claims, the AP reported. Most of the settlement money will be covered by insurance and is not expected to impact the company’s capital allocations for the rest of 2022 or the next year.
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