Hertz says it will pay approximately $168 million by the end of the year to settle the majority of the lawsuits brought against the rental car company by some of its customers who were wrongly accused of stealing cars they had rented.
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In April Hertz CEO Stephen Scherr, who took over the role in February, said that he was working to fix a glitch in the company’s systems that led to the incidents.
Hertz Global Holdings Inc. said Monday that the settlement of 364 pending claims related to vehicle theft reporting would bring resolution to more than 95% of the pending theft reporting claims.
“As I have said since joining Hertz earlier this year, my intention is to lead a company that puts the customer first. In resolving these claims, we are holding ourselves to that objective,” Scherr said in a statement.
Hertz anticipates recovering a “meaningful portion” of the settlement amount from its insurance carriers. The Estero, Florida-based company doesn’t expect the resolution of the claims to have a material impact on its capital allocation plans for the balance of the year or for 2023.
Hertz filed for bankruptcy protection in 2020, as it struggled under heavy debt and a drop in travel caused by the pandemic. It operates Hertz, Dollar and Thrifty car-rental brands.
I’ve found in the majority of times that I’ve had to rent cars over the years, that it is a most unpleasant experience, especially when returning the car. Many times, the renter tries to pressure you into a more expensive renter, or will lie, and tell you that “they don;t have the less expensive one that was reserved”. One time, when returning a car in Florida, the attendant thoroughly inspected the car (which I rented at night), and alleged that I caused a large scratch on the side of the car. After I protested their “finding”, they admited after further checking that their computer revealed that the scratch had previously been reported by another renter. Who knows how many other renters they tried to pull that scam on? Regarding Hertz, I read that there was a problem a number of years ago, in the NYC metropolitan area, whereby a major car rental company had an unwritten policy called “No Yeshivahs”, whereby they refused to rent cars to ultra-orthodox Jews. This went on until they were successfully sued.