Two US senators are calling on the government to investigate the practices of rental car giant Hertz, whose reports of stolen rental cars to police have allegedly led to the false arrests of hundreds of customers. Lawmakers cited CBS News’ coverage as a catalyst for their demands.
Democratic Sen. Elizabeth Warren of Massachusetts, in a letter obtained exclusively by CBS News, calls on the White House Competition Council to investigate consolidation in the rental car industry, saying it has “resulted in rising prices and diminished services for consumers.”
In her letter, Warren pointed to Hertz customers who are said to have been “repeatedly arrested for driving rental vehicles that the company accidentally reported stolen.” She called it a “disturbing pattern that has led to traumatic experiences, job losses and even jail time for clients.”
Warren cited examples from a CBS News investigation into alleged false arrests, including “a NASA employee arrested at gunpoint in Florida and a real estate agent who lost her professional license for a year.”
In an interview with CBS News, Democratic Sen. Richard Blumenthal of Connecticut, chairman of the Senate Consumer Protection Subcommittee, called for a state investigation into the false arrest allegations. Blumenthal called CBS News’ coverage “powerful and important because it has uncovered a practice, a pattern of wrongdoing, that is absolutely mind-boggling in its magnitude.”
In response to Blumenthal’s comments, Hertz said in a statement to CBS News, “As we’ve said before, Hertz cares deeply about our customers and successfully provides rental vehicles to tens of millions of travelers each year. As a company, we strive to deliver what’s right for our customers.” do while continuing to protect and defend against activities designed to harm Hertz.”
The false arrest claims of former Hertz customers have been filed in the federal bankruptcy court in Delaware. The claims have been deferred pending the completion of the company’s bankruptcy proceedings. The insolvency judge responsible is currently examining how many of the approximately 230 plaintiffs are allowed to pursue their lawsuits against the landlord.
Hertz has said in the past that virtually all allegations of false arrests are “baseless” and should not be allowed. The company filed for bankruptcy in May 2020, citing the pandemic and massive debt. The reorganization plan was approved in June last year.
Hertz tried to seal information about the number of police reports it had filed against customers, but after CBS News objected, the judgedisclosed these records. The company then announced that it had filed an average of more than 3,300 theft reports against customers each year for a four-year period.
Hertz told CBS News that it had neither seen nor received Warren’s letter and was therefore unable to comment.
The company has previously said that “the vast majority of these cases involve renters who have been many weeks or even months overdue to return vehicles and who have stopped communicating with us well past the scheduled due date.” Hertz claims that “situations where vehicles are reported to the authorities are very rare and only occur after extensive attempts to reach the customer.”
One of the lawyers representing the plaintiffs in bankruptcy court, Francis Alexander Malofiy, has accused the company of turning legitimate tenants into criminals.
“They have been aware of this for years and instead of doing the right thing and addressing it, they are trying to sweep this under the rug, even through bankruptcy,” Malofiy said.
One of Malofiy’s clients, James Tolen,that a surprise traffic stop in Houston in late 2020 turned into a frightening police encounter that left him fearing for his life. After completing a project for a client of his home renovation company, Tolen drove home on December 23 in a Hertz-rented pickup truck.
He and his fiancee, Krystal Carter, who is also a plaintiff, said they rentedabout a dozen times in 2020 — but that didn’t stop him from being pulled over by police for driving a car that the company had reported stolen. At around 10 p.m. that evening, he said police stopped him and ordered him over a loudspeaker to exit the car and told him to pull up his shirt and walk back to them.
“As I turn around, I see both officers pointing guns at me,” Tolen told CBS News consumer correspondent Anna Werner.
“It was just terrifying. It was bad. Actually, I really thought I wasn’t going to make it home,” he said.
Tolen said officers handcuffed him and then told him he was driving a stolen car.
“I thought, ‘This is impossible. I rent from Hertz. I’m a contractor,'” he recalled telling police.
Tolen asked officers to look at his rental agreement, which he said listed as an authorized driver. He said that after seeing the document, one of the officers called Hertz and confirmed that Tolen had a valid contract. He said the officer then told the Hertz representative, “We’re going to give him the vehicle back and you’ll have to get a better system.” This guy could have lost his life.”
Carter and Tolen said they later found out that the truck they rented had been reported stolen by Hertz three months earlier.
“I was hot. Hot,” Carter said. “For example, we have rented from them several times this year. Several.”
CBS News also found that in a similar case in 2019, the attorney for a South Carolina plaintiffwhether there have been any other lawsuits against the company for false arrests and similar allegations. Hertz then provided the attorney with a database that he believed contained over 300 claims filed from 2008 to 2016.
“I was overwhelmed by the number in just eight years,” said attorney Fritz Jekel. CBS News could not see the database because Hertz had marked it as confidential and kept it secret from the public.
Hertz declined to answer questions about the database.