Rental Car Companies Settle Alameda County Overcharging Lawsuit

ALAMEDA COUNTY, CA -- Two rental car companies have settled a lawsuit alleging that they overcharged customers for repairs to damaged rental cars.

Alameda County District Attorney Nancy O'Malley said Tuesday that E-Z Rent-a-Car and Advantage OpCo LLC, which acquired E-Z in 2015, have agreed to pay $3.3 million in civil penalties, $1 million in restitution and $300,000 for investigative costs to settle the consumer protection lawsuit, which was filed in Alameda County Superior Court.

E-Z and Advantage are in the business of renting automobiles to the public and operate at many locations in California, including airports, O'Malley said.

The lawsuit alleged that E-Z and Advantage frequently billed renters for damaged rental car repairs based on third-party repair estimates that were higher than the actual cost of repair and failed to pass along the discounts they received.

The complaint alleges that the overcharging practices started with E-Z and were incorporated into Advantage following the merger between the two companies in June 2015.

California laws prohibit a rental car company from making a claim against the renter that is more than the actual cost of repair, including any discounts and price reductions the company receives, which means that rental companies must pass along the discounts they receive.

"We all know how frustrating it is to accidentally damage a rental car. If you happen to do so, you should not be charged an excessive amount to repair the car or need to worry about whether the cost of repair work is being used to generate revenue," O'Malley said in a statement.

About half of the $1 million in restitution will be distributed by the rental car companies as direct refunds. The rest will be distributed by prosecutors as set forth in the settlement, she said.

Bay City News contributed to this report.