Hertz to Pay $168 Million in Settlements Over False Robbery Claims, Which Led to Jailing of Customers

Cars at the Hertz Rent-A-Car rental lot at San Francisco International Airport, Calif. on April 30, 2020. Justin Sullivan/Getty Images

Hertz, the rental car company, has agreed to pay $168 million to settle multiple claims in the United States over false car robbery charges against some of its customers, which led to imprisonment in many cases.

Customers of the rental car company alleged that they were pulled over, arrested, thrown in prison, and falsely charged with stealing Hertz’s vehicles.

The plaintiffs said that after Hertz employees could not find the rented vehicles or reported them overdue, the company was accused of filing charges, even if they were returned to car depots.

The company was then accused of falsely pressing non-payment charges against these customers who were innocent of car theft.

Hertz was also accused of failing to withdraw the false reports made to law enforcement, with some customers being held at gunpoint by the police while under arrest over the mix-up.

The plaintiffs also seek additional compensation over things ranging from lost wages to mental anguish.

The car rental also operates the Dollar and Thrifty rental services, meaning the claims likely involve all three brands.

Hertz Agrees To Pay Damages

Hertz began distributing its first round of settlement offers in June.

This month, the car service decided to settle another round of 364 claims, to resolve 95 percent of all remaining claims and pay around $168 million to the plaintiffs by the end of the year, according to a company press release released Dec. 5.

Hertz said it “expects to recover a meaningful portion of the settlement amount from its insurance carriers.”

Stephen Scherr was appointed CEO of Hertz in early February, with a promise to remedy the scandal as a top priority, and said that he would “do right” to customers who had been mistreated.

“My intention is to lead a company that puts the customer first,” said Scherr in a statement.

“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,” he added.

Pandemic Era Bankruptcy

After taking a significant hit due to the pandemic, the car rental service filed for Chapter 11 protection in June 2020, with false arrest charges starting to become more common after that.

The lawyers for the customers calculated that the total amount of damages owed would be over $960 million before Hertz’s settlements, but the company said that the plaintiffs’ figure was exaggerated.

Meanwhile, Hertz spokesman Jonathan Stern said in June that Hertz was “reviewing and considering each claim” brought against them on their individual merits.”

“We have begun extending settlement offers to dozens of claimants and will continue to do so on a case by case basis,” he said.

Some cases were previously moved out of bankruptcy court to state courts.

Hertz stated that the legal settlement is unlikely to have a “material impact on its capital allocation plans for the balance of 2022 and 2023.”

According to court documents, Hertz filed about 3,365 police reports annually, accusing customers of car theft.

It is not known how many of Hertz’s car theft reports may have been improperly filed.

There are an estimated 30,000 rental cars stolen in the United States every year alone, to the National Insurance Crime Bureau.