Hertz To Pay $168 Million To Customers Arrested Due To Their False Police Reports

Hertz announced a $168 million settlement covering 364 claims against them, at an average of just over $460,000 per customer.

There are perhaps a dozen more customers who are suing Hertz, that are not a part of the settlement. I have to think that in many of those cases the customers believe the egregiousness of their experience warrants a greater cash payout and that it makes sense to get closer to trial.

It’s hard to imagine that – given the substantial evidence of Hertz incompetence, wrongdoing, and callousness (a refusal, for instance, to retract false police reports out of fear that the retractions would lead police to stop trusting their false reports) that we won’t see additional liability.

Here are a handful of examples of what happened. One elite member chalked up 4 arrests spending 30 days in jail, where she suffered a miscarriage. And:

  • Connie Totman, who rented a car from Hertz in South Carolina and returned the car in Georgia. Hertz subsequently overcharged Ms. Totman in error and falsely reported the vehicle as stolen to South Carolina police. Because of this false theft report, Ms. Totman was then arrested on three separate occasions, twice in Georgia and once in South Carolina, over the course of a year. Charges against her were ultimately dismissed.

  • Saleema Lovelace, who was arrested at gunpoint two days before the date on which she had agreed to return her rental car to Hertz. Despite paying for her rental in full, Hertz reported the vehicle as stolen after deleting records of Ms. Lovelace’s payment and of her rental extension agreements. Ms. Lovelace remains under ongoing prosecution today.

In its release, Hertz says they believe “a meaningful portion of the settlement” will be covered by insurance so ‘no big deal’ to them what they did to customers, at least for investors. Meanwhile their CEO shrugs in an included statement saying they “will not always be perfect.”

“As I have said since joining Hertz earlier this year, my intention is to lead a company that puts the customer first. In resolving these claims, we are holding ourselves to that objective,” said Stephen Scherr, CEO of Hertz. “While we will not always be perfect, the professionals at Hertz will continue to work every day to provide best-in-class service to the tens of millions of people we serve each year. Moving forward, it is our intention to reshape the future of our company through electrification, shared mobility and a great digital-first customer experience.”

I’m not sure how “shared mobility,” electric cars and a strong mobile app will keep them from reporting cars stolen that haven’t been stolen? And you have to think a $100 million-plus insurance payout will affect their rates at least. But it’s something for a majority of current claims they’re facing, at least.

Unquestionably getting these stories out of the news benefits Hertz. But the trick is to stop this from continuing to happen. Hopefully working with Palantir will help them do a better job tracking their fleet.

(HT: Jonathan W)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. “While we will not always be perfect” – that should be reserved for when a car has a flat tire or there’s a long line at the counter – not false arrest.

    Usually when insurance has to make these payouts, it’s the insurance companies who puts in standards to make sure it doesn’t happen again (i.e., you need to update X and have Y procedures in place) or else they won’t pay out a future claim.

  2. “19 Things I Love About The Capital One Venture X Card”
    by Gary Leff on November 13, 2022

    #17. Hertz elite status

  3. Palantir is a truly *high tech* company. Bringing them in is akin to solving the exploding Pinto problem by adding automatic braking… which is to say, it doesn’t at all address an unsafe underlying engineering issue.

    I do not look forward to the coming years of arrest reports from Hertz customers (and non-customers!) because they still don’t know how or refuse to spend the money to fix their IT stack. It’s clear they have a problem with tech debt, it’s even clearer they still have the problems with leadership that led to that tech debt in the first place.

    If I were a betting man, I’d be shorting Hertz right now, on anything from a 6 to 24 month timeframe.

  4. Knowing Palantir, their involvement will likely entail assisting the cops in wrongfully arresting customers with greater efficiency.

  5. A day in jail for the CEO for every customer arrested.it would stop the bad practices immediately.

  6. Hertz has become my last resort for transportation right after riding in a shopping cart.
    You know when you are near one, you can smell the corruption.

  7. The whole traditional car rental industry is at play here, not just Hertz. I would avoid using the whole lot of them. If you really need to rent a car, look to one of the newer online players in the space, but only those having good ratings and reviews.

  8. Part of this nightmare and this morning I am more disgusted and disturbed then I was on the day of my f arrest due to Hertz false police report. I needed to express myself before my time to do so runs out! I will soon be forced to delete all of my social media post comments etc regarding this matter as Hertz has ordered us all to do! Such a great company..make sure to book your next rental thru them!!

  9. Why any insurance company would cover false arrest of customers is beyond comprehension. I would like to know who their insurance company is so I can make sure I don’t use them. Hertz should pay 100% of the cost of their stupidity and incomptence.

  10. Hertz used to be my first choice but for this reason ( false arrests) and the fact that they wiped out all my points due to inactivity during the pandemic they are my last choice.

  11. I will not rent from Hertz unless and until there are at least 2 years with zero reports of innocent customer arrests. Being an unlucky one could easily result in jail time and job loss, so it just isn’t worth saving $5 a day relative to National’s rates when the downside risk is so extreme.

  12. Beachfan is correct.

    This is just a business decision by Hertz that does nothing to fix the underlying problem. It is equivalent to Boeing paying a settlement to the 737-MAX survivors without fixing the underlying problem.

    Nothing will change until the CEO is jailed.

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