Hertz Australia Pty Ltd - s.87B undertaking

Company or individual details

  • Hertz Australia Pty Ltd

Undertaking

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Hertz Australia Pty Ltd (Hertz) in relation to Hertz incorrectly invoicing and charging customers for pre-existing vehicle damage and failing to pass on spare parts discounts to customers.

Hertz is a privately owned company that operates a car rental business across Australia. From January 2014 to December 2015, Hertz entered into approximately 1.89 million vehicle rentals to customers.

From at least November 2013 to August 2015, Hertz incorrectly made representations to some of its customers that:

  • the vehicle the customer hired from Hertz had sustained damage during the customers’ rental period when, in fact, the damage was pre-existing and not caused during the customer’s rental period; and
  • Hertz was entitled, pursuant to the rental agreement between the customer and Hertz, to charge the customer for the pre-existing damage when, in fact, Hertz was not entitled to charge the customer for that damage. 
  • From January 2013 to August 2015, Hertz also incorrectly made representations to some of its customers that:

  • the amount Hertz had invoiced and charged the customer for repair costs for damage sustained during the customer’s rental period was the actual cost to Hertz for repair of that damage.
  • In fact, the cost to Hertz was lower than the amount charged to customers partly because Hertz received spare parts discounts that it did not pass on to those customers.

    Hertz has acknowledged that its conduct was likely to contravene sections 18 and 29(1)(m) of the Australian Consumer Law (ACL).

    In response to concerns raised by the ACCC, Hertz has agreed to take various steps to address the conduct, including court enforceable undertakings to:

  • contact and refund customers who were charged for pre-existing damage or overcharged for vehicle repairs due to errors in Hertz’s repair charging processes; 
  • conduct damage reviews prior to charging customers for suspected new vehicle damage to confirm that the damage is not pre-existing damage or existing “fair wear and tear”;
  • make improvements to its damage recording procedures to minimise the risk of pre-existing damage charging and overcharging for vehicle repairs; and
  • engage an independent external auditor to monitor Hertz’s compliance with the undertaking.