An Illinois federal judge partially granted Hertz’s request for summary judgment on an unfair rental fees class action lawsuit, but decided that Hertz would have to face some of the customer’s allegations. Chief U.S. District Judge Nancy J. Rosenstengel trimmed customer Emma Bradley’s proposed Hertz fees class action lawsuit last week. Bradley claims that Hertz overcharges customers by adding fees like an “energy surcharge” and “vehicles licensing cost recovery.” Ring of Fire’s Farron Cousins discusses this with Scott Hardy from Top Class Actions.
*This transcript was generated by a third-party transcription software company, so please excuse any typos.
Farron Cousins: Most Americans, regardless of what you do in life, what your job is, what your hobbies are, we’re all pretty much equally getting smacked with these unfair user fees from every corporation imaginable. Whether it’s your cell phone, your cable service, your satellite service, your Internet service and rental cars, hotels. I mean quite literally anything you do outside of the norm, you’re going to get hit by some kind of user fee. But luckily there’s lots of class action lawsuits out there trying to make things a little more transparent and trying to remove some of these unfair fees and that’s exactly what we’re seeing right now with Hertz rental cars.
Joining me now to talk about this is Scott Hardy with Top Class Actions, and Scott, you and I have talked about this a lot. I mean, it’s just fee after fee after fee. Everywhere we go for just the most random, whatever kind of word they can create to charge you a fee for. A usage fee, electricity fee. So tell us what’s happening here with Hertz.
Scott Hardy: Sure. So with this Hertz fee, this class action, they’d been fighting this for a while. And now the judge actually sided with Hertz, partially. So the judge said, hey, you filed this class action stating that there were these hidden fees. You didn’t know about it. Well, we’re looking here and these fees are disclosed on the website when you’re making a reservation. So you can’t say you didn’t know about them. Yes, you might have not read that disclaimer, but Hertz is properly disclosing the fees. So that part is out. You can’t say that, you know, Hertz did that illegally, but you can take a look at those fees that Hertz is charging and if they’re overcharging their customers, that is a valid contention.
And so that’s what this class action is now focused on is that Hertz has been charging these fees like energy consumption fees and other, vehicle registrations and licensing, and they’ve been charging the same fees for years. They haven’t actually made their prices go up or down based on the actual costs that they’re paying. And so this class action is stating that Hertz is overcharging their customers for these fees because yeah, while the fees may be valid, they need to actually pass on the actual cost of the fees and not put some cushion in there for profit.
Farron Cousins: Well, you know what drives me insane though about these fees is that a lot of them, as you’ve said here with, with Hertz in particular is oh well, you know, hey, we’ve got to use electricity. Maybe it’s an electric vehicle, maybe we have to charge it. Okay, totally understandable there. Maybe we’ve got to have the, you know, energy usage for running the equipment that we use to wash it and all that. But to me, this is just typical overhead of running a business. Like if I go to Krispy Kreme right now and I buy a glaze donut, they’re not going to charge me a glazing surcharge.
No, it’s all built into the cost of the donut. That’s how you make a profit. That’s how businesses work. So I don’t believe, not just Hertz, but any of these companies, me personally, I don’t believe them when they say, oh, well yeah, we’ve got to do this to recoup the cost. No, you had a bad business model set up, you had your pricing screwed up and that, and that’s, that’s where your problems are coming from here. Or maybe you didn’t have any of it screwed up and you just want to take a couple more dollars from us, which seems far more likely.
Scott Hardy: Right, because all of these fees that these big corporations are charging. What happened is you had all the executives sitting in a board room and said, my gosh, we’re spending $100 million a year in registration for these vehicles. Why don’t we pass that onto the client? So they go ahead and put on there registration fee, five bucks pop, car or whatever it is, and they go look, great. Pat themselves on the back. The average end user just goes, what? Another $5 fee. Oh, it says it’s for registration. I guess I have to pay it. Oh, this energy fee, like you said, well, this must just be something that they need to make my car ready. Am I paying for the vacuuming now? I don’t know. But all of these fees just add up. And if you are going to pass these on as an actual fee that you are paying as the company, then you better be able to back that up with data.
Because if I’m charging my customer a $10 fee for, you know, a hosting fee, in my case as a website, if I call it charge all my clients at $10 hosting fee, then I better be able to show that with our hundred and 50 clients that we have that covers my hosting bill every month. So Hertz had better be able to show that this energy bill and these registration fees that they’re charging all of their clients add up to what they’re actually paying and aren’t adding up to millions of dollars in profit every year. Otherwise, that may very well be illegal.
Farron Cousins: And I’m, I’m willing to bet, you know, not based on Hertz as a company, but just based on all of our past experience with corporations. I’m willing to bet a little bit of this money at least is going into somebody’s pocket up there at Hertz. For more information about this issue, please follow the link in the description of this video. Head on over to Top Class Actions and while you’re there, make sure you sign up for their weekly newsletter. Scott Hardy with Top Class Actions. Thank you very much for telling us this story today.
Scott Hardy: You’re welcome. Thanks for your time, Farron.