Rental car company Hertz will pay more than $250 million to settle lawsuits from customers who were wrongly accused of stealing cars they had rented.
The company is facing claims from hundreds of customers who said they were falsely arrested for auto theft as a result of the thousands of criminal complaints Hertz files each year.
In April, the company’s CEO Stephen Scherr said it was working to fix a glitch that saw the company erroneously file criminal complaints against customers who had not returned vehicles on time, according to AP.
The settlement will cover 364 claims related to vehicle theft reporting, representing 95 per cent of its pending theft report claims.
Hertz said it will pay USD$168 million ($250,484,649) by the end of the year to resolve these disputes, adding that it believes it will recover a “meaningful portion” of this sum from its insurance carriers.
“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.
“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.”
Hertz, which operates Dollar and Thrifty, filed for bankruptcy protection in 2020 after struggling under heavy debt as a result of travel restrictions caused by the global pandemic, AP reported.
However, the car rental giant said it does not expect the settlement to have a material impact on its capital allocation plans for the balance of 2022 and 2023.
Featured image: iStock/Chalffy
