Hertz CEO Stephen Scherr admitted that the company's actions have caused some customers to be falsely arrested for stealing rental cars. His admission arrives after 230 plaintiffs filed a lawsuit against the company for wrongly accusing them of theft.
Scherr admitted not only what happened, but he also explained how:
"What played out here is we had cars that were stolen, or allegedly stolen. We put a police report in, when that car was found, the report was rescinded. And, unfortunately, in certain circumstances, when that car went out again, it wasn't in fact rescinded, and so the customer was accused."
Claims of false arrest over non-stolen rental cars date back to 2014, with reports of this happening to people as recently as this year. In the Bloomberg TV interview, reported by CBS, Scherr also said that the company would "do right" for its customers. He didn't lay out any specifics, but he did say he had confidence that the company would reach some settlement for the innocent customers now facing legal threats.
Hertz had initially claimed that the attorney filing the lawsuit had a "track record of making baseless claims" that "misrepresented the facts," or that's what Hertz said a month ago. Now, Scherr is saying that the issue was not "systemic," adding that there are now guidelines to prevent these issues from happening again. That's quite a turn. He did not detail those new policies, either.
Last November, a CBS News report chronicled two instances where police stopped two renters for alleged theft. One could prove to the police that Hertz had rented the car to him. The other was arrested and charged with a felony. Prosecutors dropped the charges when they discovered that the man had paid for the vehicle.
These legal headaches for customers won't be easy to solve. The company filed for bankruptcy in 2020, citing the coronavirus pandemic. It was allegedly saddled with billions in debt, and it emerged from bankruptcy last October. However, it will likely now face new challenges with this costly lawsuit.