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We don’t exactly know why it continued for years but Hertz Rentals had a habit of accusing customers of stealing its cars. The accusations turned out to be false. But some arrests were made at gunpoint. Others spent time in jail and charged with felonies. But a settlement this week cost the rental company $168 million for its false accusations. The settlement will go to 364 customers accused of stealing rental cars. 

Why were so many Hertz rental customers falsely accused?

Hertz rentals
A row of Hertz rental cars | Matthew Staver/Bloomberg via Getty

“As I have said since joining Hertz earlier this year, my intention is to lead a company that puts the customer first,” CEO Stephen Scherr said in a statement. “In resolving these claims, we are holding ourselves to that objective.” Scherr became CEO in April this year.

Hertz says around 3,500 cars are reported stolen each year out of 25 million rentals. But it is clear that sloppy rental records and shifting policies regarding theft resulted in most of these theft allegations being untrue. In the meantime, most customers incurred legal fees, some spent months in jail, and others lost job opportunities with potential felony charges hanging over them. 

When Hertz entered into bankruptcy proceedings in 2020, it tried to keep the theft issues from becoming public. The lawsuits became known as the court reviewed Hertz’s potential debt. Once revealed, Hertz claimed it spent “exhaustive attempts to reach each customer” accused. That proved not to be the case.

What was Hertz doing wrong?

Hertz Corp. employees Carrie Roper and Andrew MacLean at Denver Airport | Jerry Cleveland/The Denver Post via Getty

According to NPR, a majority of these theft cases stemmed from customers extending rental periods. But the extensions were not properly filed to Hertz’s computer system, and some of the cases were never closed. The cars remained in police systems as stolen. 

In other incidents, the wrong customers were linked to legitimately stolen rental cars. “As a result of this routine and systemic mass reporting, without verification or investigation, many innocent customers have been wrongfully detained, arrested, thrown in prison, prosecuted, and had their lives destroyed,” according to one lawsuit. 

What happened when some of the Hertz customers were arrested?

Hertz worker assists a customer | Tim Boyle/Getty

A woman driving a Hertz rental car in Chicago got a flat tire. The car was towed away and a new one was substituted. Back home months later the police pulled her over during a routine traffic stop. Running her driver’s license, an arrest warrant popped up. She was arrested spending more than a month in jail before resolving the mixup. 

Another customer’s rental was reported stolen, though it had been returned on time and paid in full. A hearing was scheduled, but the customer was never informed of it and missed the date. He was then arrested and “spent months in jail” while prosecutors unraveled the mixup. 

These are only three of the many problems cited in the lawsuits that former Hertz customers went through from being accused of car theft. Hertz says it will release the money by January 1.