Hertz is very good | AIER

One thing I teach my students in business ethics is that the focus in business should not be on making money, but that money comes as a result of providing value to customers and running the business ethically and efficiently. When companies fail to do so and try to take advantage of their customers, their customers leave with their feet (and their wallets). But what happens when the company already has the client’s money? How does the client resist?

In May 2021 my family and I flew to Texas so I could attend some meetings and we could take a much needed vacation (albeit a short one). Halfway through the flight, it started raining. Much. And it wasn’t supposed to stop until after we were due to leave. Instead of hanging out for three days in a hotel room with our two young children, my wife and I decided we were going to go home to New Orleans.

We rented a car from Hertz at the Austin airport and it was supposed to be taken back to the Austin airport. We contacted Hertz to find out our options and how much it would cost to change our return location from Austin to a location in New Orleans. But no one picked up. We tried Hertz again a few hours later, and just like before, no one answered the phone. So, my wife and I did what any lawyer (her) and non-lawyer (me) would do: We read the lease.

There were only two clauses in the lease agreement that talked about returning the car to a different location, and the potential fees associated with that. First, that the estimated rental rate “assumes you will rent and return at the locations and times indicated,” and second, that a “$10 return change fee will apply if you return the vehicle to a location different from the specified location… This fee will apply in addition to Any increase in price may occur as a result of changing the delivery location.

So, according to these provisions, if we return the car to a different location than specified in the contract, we will be assessed at $10 and there can be a change in the rental price, although they don’t tell us what that change will be or how it will be calculated. We thought that at worst Hertz would cost us a few hundred dollars, we decided to make the drive.

To our surprise, we received an invoice totaling $1,255 from Hertz the next day to return the car to the New Orleans airport location, $805 above the price listed on our rental agreement. But this increase did not come from a change in the rental rate or even a “yield change fee”. Instead, it came from the previously unincluded $700 “Inter City Fee” that Hertz added to our bill, plus the 15 percent tax on that fee.

$700 seemed a bit excessive, so I called Hertz (via Twitter, it’s always good to get a written record) and asked them to justify the same fee and amount, based on the rental agreement. I was told that the “return change fee” only applies when Hertz has been notified in advance of a change of delivery location, and since I did not notify them in advance, the “one-way fee” [i.e., inter city fee] applied.” I asked where to find this on the rental agreement and was told, “This information is documented in our terms and conditions which can be viewed in rental requirements and qualifications.”

But it wasn’t there. In fact, there was no discussion of “intercity fees” or how they are calculated either in the documents provided to renters or even anywhere on the Hertz website. So I again asked Hertz to direct me to where, exactly, to discuss these charges, and to provide me with a link to them online or the document itself. Their response: “Hi Chris, while I understand your frustration with this matter. Our decision has not changed in this matter nor an amendment [to your bill] in [sic] content. This is our final decision on this matter and it will not be reconsidered.” As I will find out later, this documentation never existed.

Since I wasn’t going anywhere with Hertz, my next step was to dispute the transaction with my credit card provider, Chase. I opened an official dispute and submitted my documents. At the beginning of July, I received a written response. We read in part:[After] Information review [I] and merchant [Hertz] Submitted, [Chase] I found that the merchant informed us that he is authorized for billing [my] Calculating fees related to [my] Rent.” What information Hertz can provide? I was curious, so I decided to put Chase on the phone.

What happened next was even stranger and more frustrating. The Chase agent I spoke with told me that Hertz had, in fact, submitted documents, and that they would be sent to me electronically within 48 hours. When nothing arrived after a few days, I called them again.

I explained my story to the new agent and asked her to send me any information they had received from Hertz. After a long period of silence with the agent reviewing my file, she said she needed to transfer me to a supervisor. I asked, “Hertz didn’t submit anything, did it?” She replied that she did not want to give me inaccurate information and so she was going to transfer me. The supervisor never responded and after about fifteen minutes of waiting, I was hung up on.

I called again. The new agent I spoke with was the most helpful of all. It confirmed what I suspected: Hertz never sent Chase any additional documentation, but there was a note in the file that Hertz told Chase that the lease agreement I signed allowed them to charge whatever fees they wanted. I asked her to look at the documents (which were in front of her) to see if she thought they said something like that. She agreed with me, but then said something surprising: All Chase car rental disputes went to a separate department, and they never reversed disputed charges unless it was clear fraud, due to their agreement with the rental companies. Then I suggested that my best chance of resolving the dispute in my favor would be a different path: arbitration or small claims court.

What was most frustrating about this experience with Chase was seeing how often complaints like those of the rental car companies happen and how clear the situation is against the consumer. Even if Chase agrees to chargebacks, I still have a legal obligation to pay Hertz if the charges are legitimate. But instead of me being the one doing the extra work to respond, Hertz should have taken these extra steps.

Since I wasn’t getting anywhere with Chase or Hertz, a few weeks later I filed a lawsuit against Hertz in local small claims court. My argument was the same: The contract didn’t allow Hertz to charge whatever it wanted for returning the car to a different location. Furthermore, the contract only allowed them to change the Rental Price or assess the $10 Return Change Fee, not the previously unmentioned Inter City Fee, regardless of the amount. Furthermore, I filed my complaint with the Louisiana Attorney General as unfair business practices. Hertz was notified and continued the practice of evaluating their customers (including me) “Inter City fees”, so I was entitled to triple damages by law. I asked for a judgment of more than $2,500.

The filing process was actually very easy, albeit slow. Towards the end of the year, the court informed me that they had received a subjective response from Hertz denying my allegations and had coordinated with me and Hertz to set a trial date – August 10, 2022, over a year after I was rented.

I showed up for the trial on August 10th, and to my surprise, someone from Hertz was also there. But as soon as I knew this person was not a lawyer. It was a young employee from their local office who had been served the suit earlier that morning and was told to come. The judge came and asked who we were, and immediately started talking to the person from Hertz. “Look, I think most of what this guy says is bullshit — you can’t take the car back to New Orleans when it’s supposed to be back in Austin and don’t expect to be charged. But I’ve looked through all the docs multiple times and nowhere does it say anything about it.” These Inter City fees or how they will be determined.

The judge then proceeded to ask the Hertz employee all kinds of questions about these fees, including how they were determined and whether there was any discussion about their assessment in the lease agreement or in any of the documents referenced in the lease agreement. The employee replied not only that he didn’t know how it was assessed (saying the computer spit it out but didn’t think it was based on mileage), but also that he wasn’t aware of any documents referring to this fee, or explaining to clients that it would be assessed, or how much it would be if it was rate it. The judge replied, “This is a problem.”

The judge then asked him what he wanted to do, either have him give his judgment at that time or proceed with the trial formally (which appears to have a predetermined outcome). The Hertz employee said we should go ahead with the trial, and then the judge looked at me strangely, and then said, “Well, Mr. Surprenant, present your case.” Then I repeated the facts of the case as I understood them in about a minute, focusing only on what the judge had already determined as the winning position. The judge then asked a Hertz representative if he had any questions for me. There was a long pause before he answered in the negative, at which time the judge made him present Hertz’s position. Once finished, the judge ruled in my favor.

It’s time to determine my damage. “Mr. Surprise,” said the judge, “one thing in your petition I didn’t understand was that you were asking for over $2,500 in damages, but I only saw about $840 in damages. How did you get to this number? I explained why I believed Hertz’s conduct qualified them for a triple damages assessment under the Unfair Business Practices Act. He laughed, said he does not deal with such matters in this court, and awarded me my actual damages, court costs, and judicial interest. Hertz did not contest the ruling, and after About two weeks ago I received my check.

For me, this fight was not about money, and I agreed with the judge that there should be some sort of fee assessed for someone who is supposed to drop a car in Austin but ends up dropping it in New Orleans. What bothered me was the behavior of Hertz. It was clear that the clause they were trying to impose wasn’t in our agreement, and he basically claimed something was at issue: well, we already charged you and we’re cooperating with credit card companies, so good luck getting your money back.

In these cases, it is essential that the client does not just walk away. The process of filing lawsuits is relatively easy and there is enough information available online that logically minded people can defend themselves, assuming they have the time. When companies behave badly, they count on the customer not getting into a fight, whining and complaining that they will never do business with such and such again. One way to stop this – perhaps the only way to stop it – is if clients use the tools of the legal system to fight back.

Chris surprise

Chris W. Surprenant (PhD, Boston University, 2009) is Professor of Ethics, Strategy, and Public Policy and Director of the Institute for Entrepreneurship and Urban Policy at the University of New Orleans. is an author Injustice for All: How Financial Incentives Corrupted and Can Fix the US Criminal Justice System (Routledge 2019).

Follow him on Twitter @employee

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