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February 19, 2006

Sign Of The Times Environment

Is global warming increasing the frequency and severity of storms, floods, etc? Insurance companies provide a market-oriented barometer. Hertz has now changed its car rental contracts to make the renter responsible for damage resulting from hurricanes, floods, and other "acts of nature or God".

As of Jan. 1, Hertz's voluminous contract for its core customer base of millions of "Gold Club" members has been changed in several eye-opening ways that place a far greater onus on customers to make good for any unforeseen mishaps.

The changes also allow Hertz to reach deeper into customers' pockets by placing larger holds on credit cards when a car is rented. [...]

[Renters now are] accountable for accidental fires or "acts of nature or God."

This is a change that, had it been in effect at the time, would have been potentially troublesome for any Hertz customer caught in Hurricane Katrina, say, or the recent flooding in Northern California... [...]

Another change to Hertz's contract says that if the company decides a damaged car has been totaled, it can bill customers for the "fair market value" even if this "is greater than the cost that Hertz would have incurred to repair the car." [...]

Hertz also now says that when a hold is placed on customers' credit or debit cards to cover all anticipated costs — a routine transaction for car-rental firms and hotels, among others — it may lay claim to as much as $200 "greater than the estimated charges." [...]

Ed Mierzwinski, consumer program director for Washington's U.S. Public Interest Research Group, said it's clear that Hertz is taking a leadership position in shifting greater responsibility for damage, and a greater financial burden, onto customers.

Even if other rental-car firms aren't doing exactly the same, he said it may be just a matter of time before they're all rewriting their contracts.

"Generally, companies in this industry keep testing to see how much they can gouge customers for every ding or what have you," Mierzwinski said. "They quickly copycat each other.

"It's a race to the bottom," he said.

Handwriting on the levee wall.

Posted by Jonathan at February 19, 2006 03:46 PM  del.icio.us digg NewsVine Reddit YahooMyWeb