Hertz Shells Out $168 Million To Settle 364 False Theft Reports
from the addresses-a-symptom-but-not-the-underlying-problem dept
All’s well OK that ends well OK. Months of reporting tied to lawsuits filed by Hertz renters falsely accused of theft should now come to a halt. Maybe.
Here’s the company’s statement on the multi-million dollar settlement, which doesn’t say much about Hertz’s culpability, nor any plans it has in place to prevent something that has only occurred with this rental company from happening again.
Hertz Global Holdings, Inc. (NASDAQ: HTZ) today announced the settlement of 364 pending claims relating to vehicle theft reporting, bringing resolution to more than 95% of its pending theft reporting claims. The company will pay an aggregate amount of approximately $168 million by year-end to resolve these disputes. The company believes it will recover a meaningful portion of the settlement amount from its insurance carriers.
“As I have said since joining Hertz earlier this year, my intention is to lead a company that puts the customer first. In resolving these claims, we are holding ourselves to that objective,” said Stephen Scherr, CEO of Hertz. “While we will not always be perfect, the professionals at Hertz will continue to work every day to provide best-in-class service to the tens of millions of people we serve each year. Moving forward, it is our intention to reshape the future of our company through electrification, shared mobility and a great digital-first customer experience.”
First, it’s only “95%” of pending theft reporting claims, which means the company is still somewhat tied up in litigation.
Second, while it may hurt Hertz a bit to cough up roughly a half-million per bogus theft claim, it appears it won’t hurt much. Apparently, its insurance carrier will be footing the bill, which means as long as its insurers are willing to cover costs related to horrendous inventory control practices, there’s really no deterrent in place to prevent this sort of thing (a sort of thing extremely particular to Hertz) from happening again.
Third, the CEO’s statement portrays the false arrest of people as a commonplace customer service failure, rather than the potentially deadly, life disrupting experience it is.
Fourth, the plans for “moving forward” do not address the underlying issues. Instead, the CEO touts a future full of app usage and electric vehicles, something that’s apparently meant to make us forgive its recent past full of sloppy inventory control, outsourcing of repo work to local cops, and a reputation for converting honest renters into criminals.
The statement also says nothing about the company’s unwillingness to drop bogus prosecutions of renters despite being sued multiple times.
While it’s not unexpected to see a corporation present a cheery veneer when cranking out press releases, there’s nothing in this that suggests Hertz won’t keep doing what Hertz has been doing. The CEO promised to clean this mess up, but he’s the same person who hasn’t explained why his company has allowed prosecutions over bogus theft reports to proceed even though Hertz was aware the reports were false. Digging into an insurer’s pockets to pay off people the company has wronged doesn’t offer any assurance the company will do the right thing in the future.
Filed Under: rental cars, settlement, theft
Companies: hertz
Comments on “Hertz Shells Out $168 Million To Settle 364 False Theft Reports”
If you want to stop this crap in the future, you gotta hit ’em where it Hertz.
I’ll see myself out.
Will NEVER use them ever
They make no mention that I’ve seen that they’ve fixed the glitch that caused these issues in the first place.
Re:
Oh it doesn’t seem to be a glitch but rather gross indifference. ‘Our system flagged it as stolen and we don’t care enough to double-check before reporting it as such.’
Insurance Premiums can hurt, though
The way insurance works is that the customer is basically placing a bet that something will go wrong. The house, through actuaries, calculates the odds to set the premium. When a customer, such as Hertz, changes the odds through bad actions, the premiums change. I know details of one company where premiums jumped as a result of some accidents. The premium jump stung so much that the company implemented an aggressive program that included sharing premium savings with the employees. The employees were also given goals of finding ways to prevent issues to increase their shares in the savings.
The only way a casino is going to lose is if it’s owned by Donald Trump. As odds change, premiums will change to recover the losses. Especially if the insurers are publicly held, stockholders will demand that those premiums increase enough to recover the $168M payout.
Money Going to Who?
So, $16.80 per customer and the remainder to the lawyers?
You can get insurance that covers you for malicious, bad-faith acts? Where do you sign up for that?
Re:
I was thinking the same thing. I want to see a copy of that Policy, because I’m willing to bet next year’s paycheck that there’s a prominent clause in the “not covered events” paragraph, to wit:
IV – We will not cover You in any of the following events:
(a) ….
(b) ….
(c) Criminal acts performed by any Officer, Agent or Employee of Your Company, regardless if such act is either accidental or intentional in nature. Such criminal acts shall include, but are not limited to:
(i) ….
(ii) ….
(iii) Filing of a police report claiming that a vehicle owned by You was stolen; Provided:
(a) Your rental customer named in the Stolen Vehicle Report (hereinafter styled as “SVR”) brings an action against You alleging that the SVR was false; and Provided Further; Your rental customer succeeds in his or her action, or has a likely chance of succeeding; and Provided Further; that a settlement between You and Your rental customer was reached out of court for the purpose of evading and/or escaping a successful prosecution of said action against You.
If the insurer was stupid enough to not include this kind of verbiage, then I feel sorry for their stockholders.
“my intention is to lead a company that puts the customer first”
And in fact your company did put the customer in jail for the first time.
I so long for the settlement that includes:
$1 payment (plus legal fees) for damages incurred.
For each subsequent incident where a customer is falsely accused of vehicle theft, the previous token payment is to be doubled and remitted to plaintiff (plus any legal fees incurred by plaintiff to collect said payment). This accrues for each incident, corporate-wide, regardless of date or nation involved.
Either they wise up by the 15th or 16th payment, or they surrender the company to you.
The Pointy-haired boss is strong with this one
“As I have said since joining Hertz earlier this year, my intention is to lead a company that puts the customer first. In resolving these claims, we are holding ourselves to that objective,” said Stephen Scherr, CEO of Hertz. “While we will not always be perfect, the professionals at Hertz will continue to work every day to provide best-in-class service to the tens of millions of people we serve each year. Moving forward, it is our intention to reshape the future of our company through electrification, shared mobility and a great digital-first customer experience.”
Corporate speak at it’s finest, an entire paragraph that says nothing. No admission of guilt, no plans on fixing the problem, merely boasting about how great they are and asserting that since they threw money to make the problem/lawsuit go away that means they fixed it.
One more false theft suit and it would have been 365.
Enough to make a calendar of times we believed the customer was stealing- and we were wrong!
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