We recently detailed a lawsuit filed against Hertz Global Holdings by the City and County of San Francisco because San Francisco had implemented cashless tolls. In that article, I explained that the lawsuit would end in a settlement even though the underlying issue was caused by San Francisco not adequately explaining the lowest cost options for paying their tolls on the Golden Gate Bridge. Enter the State of Florida against AvisBudget Group, a recently concluded "investigation" that effectively followed the same framework.
According to Florida's Office of the Attorney General:
- AvisBudget Group (Avis, Budget, and Payless) was very cooperative with the investigation.
- AvisBudget Group accurately lists their e-Toll information on the website.
- AvisBudget Group accurately lists their e-Toll information while booking on AvisBudget websites.
- AvisBudget Group accurately lists their e-Toll information while booking on external websites (with Expedia and Priceline listed).
So ... People making reservations online already had access to the rules and fees of e-Toll but AvisBudget has to fork over some cash to settle? Is that really something that needs to be investigated? The Attorney General in the State of Florida decided the answer was "yes", as counter agents employed by AvisBudget Group provided statements that violated their written policies.
We Dislike Tolls More than You Do
Not only do we experience tolls, we answer questions about tolls quite frequently. Governments largely have a monopoly on toll roads (there are a limited number of private exceptions). These same governments have begun to implement cashless tolls, which impact all drivers in the region. Yet governments hate when rental car companies provide products to help with cashless tolling. Before you think we're siding with the rental car companies, our blog consistently tells stories where:
- Governments (state, local, and airport authorities) do stupid things to renter car consumers and
- Rental car companies do stupid things to rental car consumers.
In a way, we're much like police officers investigating traffic accidents -- more than willing to place blame on multiple parties when needed. That's what the recent class action settlement filed by the State of Florida against AvisBudget Group involved.
The Government is Here to "Help"
You see, the State of Florida's major claim mirrored the major claim in San Francisco's lawsuit against Hertz.
- The rental car companies provide access to services (in this case, e-Toll) that will pay tolls at a cost.
- The rental car companies didn't tell consumers about the option to bring a personal transponder, avoid Florida's cashless toll roads, or pay with cash.
- The State didn't label their toll roads well enough that travelers knew how to avoid paying cashless tolls by license plate.
Yes, the government pulled the "we're suing you because our signage is poor" gambit. Sadly, it works, but it should not. Imagine that I drove my personal car from Tennessee to Florida. My claim that neither the State of Florida nor Nissan North America didn't provide me with adequate information about bringing a personal transponder or avoiding cashless tolls would be laughed at by Florida's Attorney General. Perhaps rental car companies should adopt a practice of providing copies of the state's Motor Vehicle Code* as a fail-safe.
* That was a joke -- the state would then sue for the rental car company providing too much information for a consumer to digest.
So What's the Beef with AvisBudget Group?
The short answer is politics. The longer answer? The State of Florida took all the individual complaints against AvisBudget Group from 2010 to present, launched an investigation against the corporation, and then wrote a bunch of conditions on AvisBudget Group operating in the State. The settlement by AvisBudget Group effectively means that the Office of the Attorney General has placed binding restrictions against AvisBudget but not their competitors, without action by the Florida State Legislature.
In addition to objections about Avis' e-Toll service how the product is sold (despite the accurate information admittedly listed on every reservation), the complaint deals with the people employed at corporate-owned Avis, Budget, and Payless sites. In fact, the types of behaviors described in the State of Florida's complaint closely mirrors the behavior alleged in a class action lawsuit filed against AvisBudget Group's Payless subsidiary in late 2016.
Aside from the e-Toll statements, the other provisions of the settlement effectively require the rental car counter agents (who are paid on commission) to just tell the truth in order to not inflate revenue:
"The companies must also train employees to ensure they are not telling consumers that the only way to pay for tolls in Florida is through their e-Toll system, or telling consumers that all toll roads in Florida are cashless. Additionally, the companies are required to provide consumers with truthful information about damage waiver products. The rental car companies must clearly and conspicuously disclose the cost of any damage waiver product and cannot impose a damage waiver fee when the consumer has declined coverage. The companies also may not charge consumers for a higher car class when the car class reserved by a consumer is unavailable, and the per day cost of any car class upgrade must be clearly and conspicuously disclosed."
On the components other than e-Toll, the Attorney General's Office recognized that there was nothing worth any form of financial penalty. As the settlement only applies to AvisBudget Group corporate-owned locations, solving the problems of commission-based agents lying to customers should be really darn easy -- firing for cause means income goes to zero (not eligible for unemployment). The rental car company's IT systems are bad but trust us; the rental car companies do know the counter agent who issued each rental car contract! Cleaning house and providing strong disincentives for false statements is something we hope every corporation elects to undertake.
What about that financial settlement?
That's the $100,000 question (at $3.95 per rental day). Despite the media attention to the settlement, recovery by renters in the State of Florida will be minimal. Did you rent from Avis, Budget, or Payless at a major airport between January 1, 2010, and July 10, 2017, incurring an e-Toll fee without knowing about how e-Toll works? File a claim form before January 7, 2018 related to the first (and only the first) rental during the settlement timeframe and you might get a partial refund of the e-Toll service fee. We say partial refund because the maximum liability of AvisBudget Group to all renters in this settlement is just $100,000 in addition to any refunds already made. The company was also required to give the Office of the Attorney General $150,000, but that's not really noting in a press release ...
There are three major exceptions for refunds:
- Renters who picked up a car at an Avis, Budget, or Payless franchisee are ineligible (think neighborhoods, not airports); the settlement is only for corporate-owned locations.
- Members of the Avis Preferred and Budget FastBreak programs -- who have already accepted the terms and conditions of the e-Toll program as part of the program enrollment -- are not eligible.
- Individuals who incurred the fee on a second (or subsequent) rental; after the first charge, the renter is deemed to be aware of the fee.
Is This a Media Opportunity?
Yes. And of course, we're happy to call out governments as needed:
- The Legislature hasn't placed the same consumer protection restrictions on the other rental car companies.
- The Office of the Attorney General is getting more post-settlement money than all impacted consumers combined.
- AvisBudget Group technically only has to provide improved signage and communications for 4 years. Really.
AvisBudget also has to do the State of Florida's dirty work. When a reservation is made online, AvisBudget has to provide the e-Toll rules (as they already do) and an additional reminder 24-72 hours about the State of Florida's cashless tolls and:
"how (the consumer) can avoid the charge for the e -Toll service by using their own transponder or avoiding cashless tolls and paying all tolls in cash."
Again, we really wish someone was responsible for informing us about toll rules before we drove our personal car into each state. And if you rent a car in Georgia for a trip across the border to Florida, you're on your own.
AvisBudget Group -- on incidents where misconduct by staff is known -- should remove the problematic staff. That's quite simple. Yet there's no basis for this settlement if the government that later punished AvisBudget Group hadn't elected to implement cashless tolls!
The rental car companies developed or contracted for toll-pay services as a convenience to consumers. Agencies that implement cashless tolls punish the rental car company for unpaid tolls, so there's a high incentive by the rental car company to ensure any tolls due are paid. There are so many (logical) ways to avoid these lawsuits, from eliminating cashless tolls to rethinking how vehicles registered in the rental fleet have fines assessed. Although the problem of cashless tolls is government-induced, we'll likely see additional regulatory "involvement" as in Florida and San Francisco.
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