Lawsuit Challenges Rental Car, Photo Ticket Collaboration
A federal lawsuit seeks damages against a rental car company for allowing the photo enforcement firm American Traffic Solutions (ATS) to place charges on the credit cars of customers without their consent. North Carolina resident Dwight Simonson filed the case in the US District Court for the District of New Jersey earlier this year and hopes it will be certified as a class action. Simonson had rented a Hertz automobile in Orlando, Florida on June 23, 2009 and was outraged to find himself being billed $10.75 by ATS for a 75 cent toll. Since 2005, the New Jersey-based Hertz Corporation has worked with ATS through a program known as PlatePass through which renters can use toll roads with a built-in payment system. Frequent travelers have expressed outrage over the automatic billing for various forms of traffic fines they consider excessive. Simonson argues that the program is intended to defraud renters.
“PlatePass is neither the boon, nor convenience defendants tout it to be,” Simonson’s lawyers argued. “The Hertz rental contract only makes an oblique reference to transmitting billing information for tolls and traffic violations to ATS. In the context of what really occurs, this reference is misleading.”
Simonson complains that all Hertz renters are automatically enrolled in the PlatePass program without notice and can automatically incur service fees of $2.50 to $3 per day, even on days for which they do not use any toll roads or otherwise take advantage of PlatePass. Customers only see the credit card charges after they return their rental car. Simonson maintains that ATS has no right to collect these fees.
“Thousands of individuals have been victims of defendants’ misconduct involving PlatePass administrative fees since its inception and implementation at Hertz car rental locations,” Simonson argued. “Accordingly, plaintiff brings this suit for breach of contract, violation of the New Jersey Consumer Fraud Act and for unjust enrichment to stop defendants from continuing on their unlawful course of conduct and to recover for ascertainable monetary losses defendants have caused to him and class members.”
According to the standard agreement that Hertz renters sign, PlatePass is never specifically identified, nor are the specific terms and conditions of the program spelled out. No mention is made, for example, that the fees are automatically imposed even when the service is not used. The agreement specifies fees and taxes including a $7.49 per gallon charge for gasoline if the vehicle is not returned with a full tank. No such amounts are given for the ATS administrative fees.
“You authorize us to release your rental and charge card information to our designated vendor, American Traffic Solutions, for the exclusive purpose of processing and billing tolls, parking or traffic violation fines and penalties and related administrative fees incurred during the term of your rental,” the contract states.
Had he known of the charges, Simonson said he would not have rented from Hertz. For its part, ATS insists the contract is clear and that renters are legally bound to pay the all administrative fees imposed because they are voluntarily incurred.
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I worked for Hertz for three years, and recently left to manage an Avis location. I'm very familiar with this. We had so many complaints when they started full-on using this system, we gave up and started taking the boxes out of the windshields and putting them in the gloveboxes. Originally, they only charged you the toll plus $2.50 processing fee on any rental days that you used the box. You could use it as many times in that 24 hour period as you wanted, and only the single $2.50 processing fee was assessed. However, about a year and a half ago, they changed to the currenty policy. Under this one, $2.50 per day is assessed on the rental up to a maximum of ten days (then just the flat $25 for any additional rental time) if the box is used at all. The big problem is that the boxes are kept for years and moved from car to car, not re-bought when a new car enters the fleet. This means the little bumps that form the locking mechanism wear out over time, and the box slides open in even mild corners on interstates. It's often left open by the Hertz locations, and the recommended placement (on the top of the windshield) is often obscured from the driver's point of view by the rearview mirror. We had TONS of complaints where people drove through toll booths, used the "Cash/EZ-PASS" lanes, and paid by cash, only to have the toll re-assessed along with the processing fee on their card a month later when ATS billed through Hertz. ATS also handled parking tickets and other traffic fines, and we often got complaints from customers that they had unwarranted ATS charges on their cards weeks or months after a rental for fines that they claimed should never have been assessed, sometimes in cities they never visited. This prompted us to simply refer them to ATS, who never seemed to meet their needs (shocking... I've been reading about ATS' schemes for years on TTAC and thus was unsurprised by these stories). The complaints largely trailed off after we started pulling the PlatePass boxes from the cars and hiding them, though the vast majority of Hertz locations left them in or re-installed them as a means of generating additional revenue, through obvious (and questionable) means.
As a Hertz Manager in the northeast I always heard requests for Toll pass transponders. Following Avis, Hertz started installing them in vehicles. The ATS box (US patent 6127938) is not the most advanced piece of composite and it sometimes opens unintentionally. Initially the charge was $2.5 per day in addition to the accrued toll charges. That would cause any one time toll use of a transponder on a monthly rental charge $2.5 x 30 = $75. That was shortly changed to a $10 max per rental. Most business renters in the Tri-State area bless this feature that allows them to bill their company Credit card. Customers used to have to collect the small receipts stubs and submit for reimbursement. They always lost a few. Others would go through the tolls without paying and then run hi fee charges from EZ pass. Gold members who rent from Hertz regularly will actually downgrade or take the mid-week hated Minivan just to have this feature. We reduced the complaints about the service after the initial launch explaining the feature to customers when inspecting the vehicle at time of rent. Customers who prefer using cash are encouraged to do so. We recommend taking the toll receipt in of a billing dispute. There is one downside for all users. Customers are billed the full toll cash rate even if a privately owned EZ-Pass would get an off hour reduced rate or the car pool $2 charge at the GW Bridge.