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September 17, 2012 / Christian Przybylowski

For A Few Dollars More: Dollar Rent-a-Car Sued for Signature Scam

A federal class action against Dollar Rent a Car accuses the company of charging customers for additional insurance and other upgrades, against the customer’s wishes.  According to the lawsuit, there is a systematic scam employed by Dollar employees that is unofficially sanctioned by the company.

Customers at the rental counter who decline the additional insurance and upgrades are asked to sign an electronic signature pad acknowledging their rental agreement.  They are told to initial or sign additional screens if they want to decline the additional insurance and upgrades.  These additional screens are actually agreements to the additional services.  In other cases the electronic signature is transferred to an electronic contract that indicates the customer wants the additional services.  These charges can add up to more than the cost of the rental itself.

Customers are not aware of these charges until they return the vehicles.  A majority of customers have flights that are leaving and cannot take the time to dispute the charges at the office.  When a complaint is made to Dollar’s corporate headquarters, a standard response indicates that the customer made a mistake, includes the electronic signature next to the acceptance of the additional services, and informs the customer that because they had the benefit of the insurance during their rental that they are ineligible for a refund.  A multitude of customers around the country have complained and described the same scenario, but Dollar continues to blame the customers for not understanding what they are signing.  Many similar complaints describing the scam are available online.

The class action accuses Dollar of incentivizing and ignoring these practices.  Representatives at the rental counter are paid minimum wage, but they receive a 12% commission on any upgraded service they sell.  This commission can lead to up to $6,000 a month in additional compensation.  Further, if Dollar employees fail to sell an average of 30 upgrades per day for three months, they can be fired and are ineligible for unemployment benefits.  With the draw of additional compensation, the fear of being fired, and the lack of consequences, Dollar employees are incentivized to take advantage of customers, lie about what they are signing, or even to forge customer’s signatures.

The Dollar Rent a Car class action lawsuit charges Dollar with multiple violations of the California Business and Professions Code section 17200 (unfair business practices), the California Consumer Legal Remedies Act (California Civil Code section 1750), and breach of contract.  The lawsuit seeks to refund all the gains Dollar has received as a result of the scam and is brought on behalf of all customers who have paid for additional services — including collision damage waivers, additional insurance, and other “upgrade” products — that they specifically declined or did not authorize, within the last four years.

This is not the first time Dollar has been accused of unfair practices.  In 1989, a California Court of Appeal upheld a judgment against Dollar for misrepresenting the scope of its collision damage waiver provisions.  The Court found that Dollar incentivized employees to aggressively sell these products in exchange for high commissions.  Additionally Dollar used contracts with tiny print that, according to the Court, a reasonable customer would be unable to read in the short time they spent at the rental window and made confusion by the customer “not only likely, but inevitable.”

If you or a loved one feels that you have been the victim of unfair business practices or unfairly charged for services you did not want, please contact Khorrami, LLP for a confidential evaluation of your rights.


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