Hertz Accuses 8,000 Customers Of Theft For Renting Their Cars Each Year

Recently, former Hertz Rental Car customers have filed lawsuits accusing the company of arrests it has made for car theft. Hertz files complaints against customers, according to these lawsuits. Now, news comes that the company carries out around 8,000 theft reports every year for the last few years. 

A judge ordered Hertz release the information

Hertz Rental order desk
Hertz Rental order desk at an airport | Getty

A large number happens each year, as determined from internal documents. A judge ordered the company to release this data. What we don’t know from the data is what these theft reports contain.

The breakdown isn’t public, so it is unclear how many of these reports involve customers, or some other form of car theft? In many cases, when Hertz tells police about a stolen car, the customers have valid rental contracts. Those are the people filing lawsuits against Hertz. 

Hertz has said in reports that the “vast majority” of those arrests were customers. It says the cases were for bills that were weeks or months overdue. According to the judge who ordered the data released, 220 customers are suing the company so far. CBS News obtained the data through the courts.

Some were thrown in jail

Hertz Rentals | Getty
Hertz Rentals | Getty-Getty

Sometimes those customers falsely arrested were also jailed. And in some cases, the arrests and jail happened years after they had rented a car. Only hours after paying their bill, one customer was held at gunpoint.  

The judge handling these lawsuits, Judge Mary Walrath, was also the judge overseeing Hertz’s Chapter 11 bankruptcy proceedings. Some of the lawsuits now before her are demanding they be paid the same way as creditors in bankruptcy.

The lawsuits spell out a similar method that the company allegedly uses to determine customers trying to steal cars. It starts when a customer wants to extend their rental. Customers call Hertz, and the company puts a hold for payment on the credit card used to first rent the car.

Hertz reported cars stolen “by conversion”

Hertz Rental Car sign
Hertz Rental Car sign | Getty

Then, Hertz reports the car stolen “by conversion” if the hold fails. It could fail because the cardholder is close to their credit limit and hasn’t paid it down. According to the Philidelphia Inquirer, when the customer pays the bill the company doesn’t remove the theft report. Even after the car has already been returned, it can happen.

One customer found out through a background check. But he paid the car rental bill, which happened years before. And throughout that period, she had never been notified of the problem. 

A problem that has persisted throughout the investigations for these lawsuits is that allegedly Hertz has tried to keep as many of these false arrest incidents out of the public eye. It argues that to release the info would put them at a “competitive disadvantage.” Hertz Vice President Michael Severance testified in court that competitors can determine the proprietary management of their inventories through this information.  

What the Hertz Vice President says “by conversion is 

Hertz Rental order desk
Hertz Rental order desk at O’Hare airport | Getty

“I can imagine a scenario where let’s say, they know the number of annual police reports that they file and now they know ours,” he said. “Let’s say they file more or less than us, so they could interpret that to mean we have better front-end controls, for example, preventing thefts. And they could look for ways to improve their abilities to reduce thefts.” Judge Walrath denied Hertz’s request, and so the company revealed how many theft reports were doled out by conversion. 

For its part, Hertz says that it cares deeply about its customers, and the vast majority of its theft reports are filed because rental cars are weeks or months overdue and customers have stopped communicating with the company.

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