Hertz will fork over nearly $170 million to settle a lawsuit that alleges the car rental company falsely accused customers of stealing cars.
On Monday, the company’s CEO Stephen Scherr released a statement sharing that the suit will cover 364 claims filed by customers back in July in Delaware Superior Court. The lawsuit claims Hertz prematurely filed criminal charges against customers who didn’t return vehicles on time. These reports resulted in numerous arrests, including one of a man in Colorado who spent a day in jail for allegedly stealing a Hertz vehicle in Georgia. The victim never rented a car from Hertz, nor had he been in the state.
In other cases, customers were pulled over and arrested for auto theft when Hertz’s tracking system failed, leaving the company unable to account for vehicles that were returned.
A spotlight had been shined on Hertz in recent years after it was reported that they’d seen an influx in auto theft reports. However, hundreds of renters spoke out against the predatory practices, which sparked an investigation.
Scherr, who took over as CEO in February, vowed to address the issue and restore customers’ faith in them.
“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 shared.
In May 2020, Hertz filed for Chapter 11 bankruptcy after taking a hit during the COVID-19 pandemic. At the time of the filing, there were only a little over 20 false theft claims. However, they quickly increased. Hertz exited bankruptcy oversight last year. Several cases were transferred out of bankruptcy court to state court, with their restructuring failing to protect them from the lawsuits.
The settlement, which is $168 million in total, will settle about 95% of the claims filed.