Senators call for investigations into Hertz following CBS News reports of hundreds of customers allegedly wrongfully arrested

Two US senators are calling on the government to examine the practices of rental giant Hertz, whose reports to police of stolen rental cars have allegedly led to the bogus arrests of hundreds of customers. Lawmakers cited CBS News reporting as the catalyst for their calls.

Democratic Senator Elizabeth Warren of Massachusetts, in a letter obtained exclusively by CBS News, asks the White House Competition Council to study consolidation in the car rental industry, saying it “has caused a higher prices and lower services for consumers”.

In his letter, Warren pointed to Hertz customers who have allegedly been “repeatedly arrested for driving rental vehicles that the company has accidentally reported as stolen.” She called it a “worrying pattern (which) has led to traumatic experiences, job losses and even jail time for clients.”

Warren cited examples from a CBS News investigation into the alleged false arrests, including “a NASA employee who was arrested at gunpoint in Florida and a real estate agent who lost her professional license during a year”.

In an interview with CBS News, Democratic Sen. Richard Blumenthal of Connecticut, who chairs the Senate Consumer Protection Subcommittee, called for a government investigation into the fraudulent arrest allegations. Blumenthal called the CBS News reporting “powerful and important because it exposed a practice, a pattern of wrongdoing of an absolutely staggering scale.”

In response to Blumenthal’s comments, Hertz said in a statement to CBS News, “As we’ve said before, Hertz cares deeply about our customers and successfully provides rental vehicles to tens of millions of travelers each year. With respect to claims made against the company, we are committed to doing what is right for our customers, while continuing to protect and defend against activities intended to harm Hertz.”

The bogus demands for the arrest of former Hertz customers were filed in federal bankruptcy court in Delaware. The claims have been put on hold until the company’s bankruptcy case is complete. The judge handling the bankruptcy case is currently considering how many of the approximately 230 people who have filed claims will be allowed to pursue their lawsuits against the rental company.

Hertz has said in the past that virtually all false arrest allegations are “baseless” and should not be allowed. The company filed for bankruptcy in May 2020, citing the pandemic and massive debt. Its reorganization plan was approved in June last year.

Hertz attempted to seal off information relating to the number of police reports it had filed against customers, but after CBS News filed an objection, the judge order these leaked records. The company then revealed that it had filed an average of more than 3,300 theft reports against customers each year, over a four-year period.

Hertz told CBS News it had not seen or received Warren’s letter and therefore the company was unable to comment.

The company has previously stated that “the vast majority of these cases involve renters who were weeks or even months late in returning vehicles and stopped communicating with us well past their scheduled due date. “. Hertz says that “situations where vehicles are reported to authorities are very rare and only occur after exhaustive attempts to reach the customer.”

One of the lawyers representing the plaintiffs in bankruptcy court, Francis Alexander Malofiy, accused the company of turning legitimate tenants into criminals.

“They’ve been aware of this for years, and instead of doing the right thing and fixing it, they’re trying to sweep it under the rug, even through bankruptcy,” Malofiy said.

One of Malofiy’s clients, James Tolen, told CBS News in November that a surprise traffic stop in Houston in late 2020 turned into a chilling police encounter that left him in fear for his life. After completing a project for one of his home improvement company’s clients, Tolen was driving home Dec. 23 in a van rented from Hertz.

He and his fiancée, Krystal Carter, who is also a claimant, said they rented to Hertz about a dozen times in 2020 – but that hasn’t stopped him from being arrested by police for driving a car reported stolen by the company. At around 10 p.m. that evening, he said police stopped him and ordered him out of the car over a loudspeaker, telling him to lift his shirt and walk back toward them.

“As I turn around, I see the two officers firing guns at me,” Tolen told CBS News consumer survey correspondent Anna Werner.

“It was just terrifying. It was bad. I actually really thought I wasn’t going to go home,” he said.

Tolen said officers handcuffed him and then told him he was driving a stolen car.

“I was like, ‘This is impossible. I rent from Hertz. I’m a contractor,'” he recalled telling police.

Tolen begged officers to look at his rental agreement, in which he said he was on the list of authorized drivers. He said that after seeing the document, one of the officers called Hertz and confirmed that Tolen had a valid contract. He said the officer then told the Hertz rep, “We’re going to return the vehicle to him and you have to get a better system. That guy could have lost his life.”

Carter and Tolen said they later discovered that the truck they rented had been reported stolen by Hertz three months earlier.

“I was hot. Hot,” Carter said. “For example, we rented from them several times that year. Several.”

CBS News also found that in a similar case in 2019, a South Carolina plaintiff’s attorney Hertz asked whether there have been other lawsuits against the company for false arrests and similar claims. Hertz then provided the attorney with a database it said contained more than 300 claims, filed from 2008 to 2016.

“I was stunned by the number in just eight years,” said the lawyer, Fritz Jekel. CBS News was unable to see the database because Hertz marked it confidential, keeping it secret from the public.

Hertz declined to answer questions about the database.

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