Hertz will pay $168 million as part of settlement agreements tied to claims the rental car company leveled accusations of vehicle theft against numerous individuals over multiple years. The rental car company says the settlement payments will be delivered before the end of 2022.
The news marks the close of “364 pending claims relating to vehicle theft reporting,” said the statement. As a result, the rental car company claims it has resolved “more than 95% of its pending theft reporting claims.”
In some cases, people involved in the settlement allegedly faced arrest after being erroneously accused of stealing rental vehicles.
While the price tag for the settlement is substantial, Hertz anticipates that its insurance carriers will reimburse a “meaningful portion” of the cost. Accordingly, the company says that the event will not have a “material impact on its capital allocation plans for the balance of 2022 and 2023.”
Stephen Scherr, who joined Hertz earlier this year as CEO, says the settlement represents his efforts “to lead a company that puts the customer first.” With the resolutions of these claims, says Scherr, Hertz is holdings itself “to that objective.”
When Scherr was interviewed earlier this spring, the new CEO said resolving the allegations was a “priority.” At the time, Scherr stated that the company had implemented policies “that will mitigate, if not remove, the risk of that happening again,” referring to the false accusations of theft against customers. He went on to say, “For a customer who was not dealt well, we’re going to do right by them.”
While the false claims go back two years, news of their existence did not surface until February 2022. At the time, a Colorado man named Drew Seaser revealed to CBS news that he had been wrongly reported to the police by Hertz. The car company alleged the man failed to return his vehicle in Georgia, a state he had never even visited.
Not only had Seaser never stepped foot in Georgia, he had never rented a car from Hertz. Still, the man was arrested and jailed for over 24 hours.
“I was terrified,” Mr. Seaser told CBS at the time. “I still don’t sleep well. My life will never be the same after that day,” he said.
Of course, Seaser is far from alone. In some instances, legitimate customers did, in fact, rent from Hertz and return their rental, only to later find out the company had accused them of stealing the vehicle.
“I am one of their best customers. And here I am sitting in jail,” said Charles Doucette after his February arrest.
According to court documents, Hertz files roughly 3,400 police reports annually charging customers with theft.