Hertz customers allege false arrest problem persists after bankruptcy

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A lawsuit filed by five Hertz Global Holdings Inc.

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Customers accused the rental giant of faulty inventory tracking that resulted in drivers facing wrongful arrest for car theft.

The lawsuit, filed Tuesday in Delaware Superior Court, said the five named customers had been arrested in the past year by police and held at gunpoint for renting and driving vehicles Hertz had incorrectly reported as stolen.

Such cases have been an ongoing problem for Hertz, according to plaintiffs’ attorney, with at least 300 since 2015. a Chapter 11 proceeding in May 2020. The latest lawsuit appears to be the first resulting from police stops since the company emerged from bankruptcy.

A spokeswoman for Hertz said Tuesday that the company has already sent nearly 60 confidential settlement offers to people “who have had a negative experience with our company.” She added that Hertz is processing individual complaints as quickly as possible and plans to make progress in seeking resolutions over the coming months.

“While we remain steadfast in our commitment to defend the interests of the company against those who intend to harm, we also want to do good for our customers,” the spokeswoman said.

In April, two months after he was named head of the company, Hertz chief executive Stephen Scherr overruled years of refusals from the company by saying some customers had been hit in the past by fake theft reports and undertaking to rectify the situation for injured customers.

Stephen Scherr, CEO of Hertz, said in April that some customers had been hit by false theft reports in the past.


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Christopher Goodney/Bloomberg News

In court and securities filings this year, Hertz said allegations of false arrests are an old problem and contained in the company that collapsed two years ago under the weight of mounting debt, d fierce competition and the early impact of the pandemic on travel. Most of the cases involved involve vehicles that were not returned to Hertz on time, although some claimants have been offered settlements, Hertz said in its latest quarterly report.

The lawsuit filed Tuesday alleged that the problems still existed. In several incidents since Hertz emerged from bankruptcy in June 2021, police allegedly arrested and fired weapons at customers for driving vehicles they had rented from Hertz.

“In any event, after learning that the customer had been falsely arrested at gunpoint, Hertz showed little concern that the customer had been placed in a horrific situation with substantial risk of injury. serious physical injuries,” the lawsuit states.

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At least 320 people across the country have sought damages from Hertz since 2015 over false theft allegations, said plaintiffs’ attorney Francis Alexander Malofiy.. Tuesday’s lawsuit stands out from other false arrest litigation as the first to target post-bankruptcy behavior, keeping it out of reach of US bankruptcy court, where many plaintiffs are still battling with the front company left behind. manage Hertz’s debts.

Some claimants have said in interviews and court documents that they were falsely referred to police for auto theft, while others claim they rented a vehicle that Hertz had falsely reported as stolen and then were arrested by the police.

The latest lawsuit argues allegations of intentional infliction of emotional distress, false arrest and negligence, claiming that Hertz’s mismanagement of inventory harms customers and wastes law enforcement time with false reports. The company effectively uses criminal theft reports to recover lost inventory, Malofiy said.

Hertz said earlier this year that it files at least 3,365 customer theft reports each year.

Write to Dean Seal at [email protected]

Corrections & Amplifications
Hertz Global Holdings emerged from bankruptcy in June 2021. An earlier version of this article incorrectly stated that it emerged from bankruptcy in July 2021. (Corrected September 20)

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