The Australian Competition and Consumer Commission (ACCC) has taken action against Europcar for what it has labelled as unfair contract conditions in its rental car hire insurance policy.
The ACCC says “that a number of terms in Europcar’s vehicle rental contracts are unfair, and that Europcar has engaged in misleading or deceptive conduct and made false or misleading representations regarding the liability cover provided to car hire customers.”
Europcar has around 125 offices in Australia and a fleet that ranges from passenger vehicles to trucks and the ACCC alleges that several terms in the standard vehicle rental contract are unfair and should be declared void.
The ACCC has highlighted two specific ares of the rental agreement for notice.
“Terms requiring consumers to pay Europcar a “Damage Liability Fee" (currently up to $3,650) if the rental vehicle is damaged or stolen, or if there is third party loss, irrespective of fault.
“Terms making the consumer fully liable to Europcar if the rental vehicle is damaged or stolen, or if there is third party loss, where a consumer breaches the rental contract, no matter how trivial the breach and regardless of whether the breach caused the damage or loss.”
Europcar is also in hot water for misleading representations that the ACCC alleges were made on the company website regarding the “maximum amount that a customer would be liable for if there was loss or damage to the rental vehicle or third party loss. The ACCC alleges that these representations were misleading because in addition to the amounts specified, a customer would also be liable for loss or damage to an unlimited amount in some circumstances.”
ACCC Chairman Rod Sims noted that rental contracts and rental insurance aggreements are often over-looked by consumers due to their complexity.
“Vehicle rental contracts are complex in nature and are often entered into during time-sensitive situations, such as airport departures. Consumers have little time to properly assess their rights and obligations under these rental agreements, and no opportunity to negotiate.
“The ACCC is concerned that Europcar’s standard consumer contracts contain terms that, if applied, impose unlimited liability on consumers in certain situations which the ACCC alleges is unfair.”
In a stement issued to news.com.au, Europcar refuted the claims of the ACCC.
“Europcar has invested substantial resources in making the booking process fully transparent and user friendly and has attempted to engage with the ACCC as part of an industry-wide review and enquiry into the car rental industry. We are disappointed that the ACCC has taken this action and it will be robustly defended."
The ACCC wants Europcar to amend its contracts by declaring specific terms in the agreements void due to unfairness and "declarations, injunctions, pecuniary penalties, orders for the publication of corrective notices and compliance program orders."
The matter is listed for a directions hearing on 5 February 2015 in the Federal Court, Perth.
