"The pattern of unlawful and fraudulent conduct is almost unlimited in its creativity. The scams take every imaginable form."

Overpayment If you thought that line could be stated by a federal prosecutor describing a professional criminal enterprise or The Wall Street Journal detailing the newest Ponzi scheme, you would ordinarily be correct. While the quote suggests a brilliant criminal enterprise, the line was actually used within a 52-page class action lawsuit submitted September 26, 2016, against Payless Car Rental and parent firm AvisBudget Group in the U.S. District Court of New Jersey.

Who is Payless?

Payless Car Rental is a third-tier, lesser-known subsidiary of the AvisBudget Group. Acquired in 2013, Payless is considered part of the "deep-value segment of the industry" according to AvisBudget . A deep-value firm focuses extensively on cutting costs, often by renting higher mileage vehicles, using off-airport locations that require a shuttle bus, and high pressure and/or questionable sales tactics to push add-on services to increase profitability.

Payless and The New York Times

Payless and The New York Times have been in an ongoing, fairly committed relationship for all of 2016. The personnel at Payless are accused of continuing actions that are newsworthy, which is not beneficial for the reputation of the company (or parent firm AvisBudget).

In January, the NYT relayed that Payless' support structure made it almost impossible to file complaints with the company . Even when complaints were successfully filed, the company proceeded to ignore the complaints anyway.

In July, the NYT added that Payless created arbitrary policies that charged customers for refueling vehicles, even when the vehicle was returned full and customers could prove that the car had been refueled based upon published policies .

In August, the NYT provided evidence that Payless does not take kindly to credit card disputes . When customers won credit card disputes against Payless, the company ostensibly followed up with letters of "Debit Advice" that required customers to send the amount that had been won in the dispute to an ominous address:

32961 Collection Center Drive, Chicago, Illinois

For those curious as to where Collection Center Drive might be, even Google can't help . Payless somehow received checks addressed to Collection Center Drive and was more than happy to cash those checks to recoup the cost of their lost credit card disputes.

As David Segal (The Haggler of the NYT) noted at the time, "if Payless is still demanding that customers send money they don't owe to a street called Collection Center Drive, it has problems that Avis Budget isn't eager to solve."

The class action lawsuit was filed against the firms a month later in September 2016 . Segal could almost be considered a consultant on the case, given the filing largely details a pattern of behavior by the Payless organization he had outlined throughout the year. In fact, his articles about Payless' failings are even listed on page 12 of the court filing.

The Class Action Filing

Class action lawsuits against a rental car company are nothing new. All of us at AutoSlash have been eligible for checks from rental car class action settlements in the past, whether for fees imposed on airport rentals, frequent flyer miles, or tolls.

What's exceptionally rare is a class action lawsuit filing that reads more like a federal RICO Act criminal filing, endemic throughout the entire firm rather than selected locations.

The business practices alleged in the class action filing are truly damning; the lawyers claim a "concerted, organized enterprise" of Payless (and parent firm Avis) to repeatedly bilk their customers.

"Defendants Payless and Avis have an organized, company-wide scheme to defraud consumers so as to increase revenues. The scheme is simple - Payless/Avis trick consumers into paying for, among other things, insurance, roadside assistance packages, fuel options, and other "add-ons" that they specifically declined. These ancillary products (rather than rental revenue) are Payless' bread and butter."

Simply put, the allegations include:

  • Telling prepaid rental customers that a failed "credit check" made them ineligible to rent cars and forfeited their rights to refunds,
  • Collecting security deposits but not returning the deposits after rentals,
  • Describing optional services as mandatory charges,
  • Adding optional services even when customers decline those services,
  • Billing base time/mileage charges multiple times, and
  • Charging customers for roadside assistance against their will, then making the service impossible to use when needed.

Attorneys for the class estimate that there are tens of thousands of potential class members throughout the almost 200 Payless rental locations. AvisBudget may have initially been unwilling to address the allegations made by customers; it's now imperative that the company show a good-faith effort to ensure company-owned and franchised locations are acting in an ethical and legal manner.

AvisBudget cannot claim a lack of awareness of complaints against Payless. There are so many categories on the Customer Care web form that the dropdown menu can only display half of the list at a time. One of the AutoSlash team appropriately referred to this as the company's "super-specific and super-extensive list of various things people can complain to them about"*.

* We're not sure how Payless can help with complaints about "Government" but the specific category of "Employee Indifference" is telling

Our Take

Payless is (without a doubt) the firm we receive the most complaints about here at AutoSlash. We know renters are looking for the absolute lowest rate on rental cars, and the base rate for Payless frequently is substantially lower that the rates provided by other firms.

The Payless complaints we receive are rather predictable and almost always related to the "optional" Roadside Assistance (also known as Emergency Roadside Assistance, Roadside Protection, RSP, or RSA). As Payless notes, the service is intended to be optional :

"RSP is offered as an optional product at most Payless Car Rental locations in the United States and Canada. The cost may vary from location to location, please refer to the individual location policy under keyword 'Roadside Assistance'. By accepting the RSP option, a daily charge will apply, as specified in the rental agreement, for each full and/or partial day."

If a contract has been signed for the service, we're sadly unable to help, and Roadside Assistance as offered by the company is certainly not cheap for a renter. Depending upon the Payless location, a week of Roadside Assistance coverage may approach the yearly cost of a reputable service like AAA.

Jonathan Weinberg, founder of AutoSlash notes, "The class action lawsuit certainly has merit based on the extensive negative feedback we have received from Payless customers over the years. One of the challenges facing the plaintiffs will be that a signed contract is often hard to dispute. While the lawsuit makes numerous claims that optional services were added without customer authorization (a claim we have absolutely no doubts about), the fact remains that the rental contracts do show the customer having signed for said services as evidenced in the filing. The key will be to prove that customers were intentionally misled in order to get them to sign the contracts as written, an assertion which the lawsuit clearly alleges."

In any instance where a contract is being signed, we hope that travelers understand each of the terms and conditions being listed. Like most AutoSlash users, we're not lawyers, and the rental agreement terms may initially be unclear. If the rental agreement charges don't match your guaranteed rate without additional/optional services, we encourage you to speak with a station manager until the rates do match before signing.

Clearly, AvisBudget doesn't want the reputation hit of a class action against the firm, even if it's a firm that's not routinely connected to the Avis and Budget core brands. While Avis and Budget have yet to provide comment on the lawsuit, we suspect this class action will quickly reach a settlement amenable to the attorneys on both sides.

Additional Detail:

The full text of the Payless Unauthorized Charges Class Action Lawsuit is Bacon, et al. v. Avis Budget Group Inc., et al., Case No. 2:16-cv-05939 , in the U.S. District Court for the District of New Jersey.

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