The company agreed to settle a spate of lawsuits for $168 million after plaintiffs successfully showed that Hertz lost track of rented vehicles, falsely charged accounts with overdue return, and rented out cars that were listed in the system as stolen.
In some instances, customers were pulled over and arrested, including at least one at gunpoint, after police ran the tags and identified the Hertz vehicles as "stolen." It turns out Hertz employees were responsible for improperly processing the vehicles in the company system.
Hertz also owns the Dollar and Thrifty rental brands, and some of those companies' customers faced similar false charges and arrests as they, too, were accused of stealing company vehicles due to employee errors.
Every year, Hertz files around 3,365 police reports accusing customers of theft. It is unclear at this point what percentage of those are false reports based on company errors.
Plaintiffs say they suffered mental anguish, lost wages, and all sorts of other problems that require compensation from Hertz. The first round of settlement offers began in June.
Hertz filed for Chapter 11 bankruptcy in mid-2020 following pandemic losses
Just this month alone, Hertz added another 364 claims to the settlement pool, while 95 percent of the remainder are to be settled by the end of the year, according to a December 5 press release from the company.
Hertz says it "expects to recover a meaningful portion of the ($168 million) settlement amount from its insurance carriers."
CEP Stephen Scherr, who was appointed at Hertz back in February, has promised to "do right" by his customers who were mistreated, falsely charged, and falsely imprisoned due to the company's internal problems.
"My intention is to lead a company that puts the customer first," Scherr said 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."
In June 2020, Hertz filed for Chapter 11 bankruptcy protection after taking a significant hit due to the Wuhan coronavirus (Covid-19) "pandemic." The $168 million settlement is not likely to have a "material impact on [the company's] capital allocation plans for the balance of 2022 and 2023," the company indicated.
In the comments, one person wanted to know how Hertz can claim insurance coverage for this fiasco since the company was responsible for falsely accusing people of theft that led to false imprisonment.
"They've got the 'idiot employee' rider on their policy," another joked in response.
"My guess is they have some sort of lawsuit coverage," responded another.
Someone else suggested that $168 million is not nearly enough, and that people need to "stop going to Hertz" to make their voices heard and address this the way it needs to be addressed.
"Can you imagine if suddenly no one was renting cars from them?" this person wrote. "That's all it takes."
"When we give someone or some company our money, we are giving away some of our power. We have the power to give our money to others mindfully, being aware of who it is we are giving some of our power away to. We can stop financing our enemies."
Another person agreed, highlighting the case of one man in San Francisco who was falsely arrested and thrown into a jail cell where the other inmates allegedly "knocked out all his teeth and broke his jaw in several places, disfiguring him."
"He should get more than the full settlement amount just for himself," this person suggested.
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