Action News Investigation: Customers sue Hertz for false theft claims

PHILADELPHIA (WPVI) -- More customers have come forward saying they have been falsely arrested, and some even jailed, for allegedly stealing cars.

According to the lawsuit, Hertz knew it had a flawed system that resulted in good standing rental cars being reported as stolen.

The suit accuses the company of using police as a repo company and falsely reporting thefts.

"I spent 3 months in jail. It did a lot of damage," Hanna Ayoub said.

"I sat in jail seven months for something I paid for. And there's no way I can get that time," Julius Burnside said.

They're among the nearly two dozen people suing Hertz in a lawsuit filed in Delaware last month.

LEARN MORE: If you feel you may be a victim, CLICK HERE.

It alleges Hertz has a faulty computer system, falsifies payment information when filing theft reports with police, and failed to adequately investigate before going to authorities.

Francis Alexander Malofiy, of Media, Pennsylvania, is the plaintiff attorney on the case.

"They can't keep track of their own inventory. So, they report cars as being stolen," he said.

He says Hertz, like many car rental companies, checks customers' credit cards ahead of time for a rental. Usually, customers are billed after a car is returned.

Alexander said in some cases, if there is a problem with the credit card, Hertz will rerun the card just prior to reporting the car stolen. The lawsuit says in most of the cases, when the card is rerun, it's successful - but police are never notified a payment has been made to Hertz.

Julius Burnside says that happened to him.

"I just paid you guys $2,300, $2,400 to use the car and now there is a warrant for my arrest saying that I stole the car and never paid any money for it," he said.

Burnside says he spent seven months in jail after missing a court date for the alleged theft due to a medical issue. In the end, prosecutors dismissed the charges saying there was insufficient evidence Burnside intended to steal the car saying he extended twice, paid and turned in the vehicle.

Hertz tells Action News it has no record Burnside extended his rental agreement.

Alexander says,"When Hertz realizes that their police report is not correct, they have an affirmative duty to correct it. However, they don't do that."

Alexander says in too many cases extension records are erased by company's internal system. But Hanna Ayoub, of Broomall, recorded his conversations with the Wilmington Delaware Hertz branch in April of 2019.

"Thank you for calling Hertz in Wilmington. This is Kylie. How can I help you?

"Yeah Kylie, I need to file an extension for another week for the Dodge Ram. Ok, give me one second."

"Can you charge it?"

"Yes $308. It went through. You are all good."

"Thanks honey."

A day later Ayoub and Alexander claim he got a call from the branch saying the car needed to be returned. They say a branch representative told Ayoub in this phone conversation he could not see a charge to bring the rental current.

"It's pending right now in my Capital One Checking Account. It $308 plus $55. If you charged it, how are you not able to see it on your end?" he said.

Ayoub was arrested for alleged theft two months later. On probation for a DUI five years earlier, he went to jail for three months.

He says despite his records of payment and the phone recordings, Hertz wouldn't drop the charges, telling Action News while he extended several times, his credit card was declined.

Prosecutors ultimately dropped the case, calling it a civil matter not a criminal one.

Ayoub adds, "It never would've happened if I didn't rent a car from Hertz."

The company released a statement that reads:

"We have extensively reviewed the claims in the lawsuit. The vast majority of the claims involve renters whose arrests resulted from their failure to return rented vehicles for weeks past their due date, in violation of the rental agreement and despite our repeated attempts to communicate with them about the status of the vehicle...We have compiled significant evidence and we will vigorously defend our case."

"Alerting the authorities is always a last resort but sometimes necessary after all options have been exhausted to retrieve a vehicle from a customer who has refused to return it, isn't responding, and isn't continuing payment. Alerting the authorities typically only happens at the end of an extensive, multi-week process that includes phone calls, texts, emails, and certified letters asking the customer to return of the vehicle.

"Our customers' safety and satisfaction are our top priorities and are demonstrated through our industry leadership, including our #1 in customer satisfaction ranking by J.D. Power. We have robust policies and practices to help our employees provide the best service and experience for our customers. We routinely review and enhance our processes, systems and training to ensure they meet our high standards.

Vehicle theft in general

Vehicle theft is an unfortunate reality of the rental car industry. We have vehicles stolen directly off our rental lots, through the use of fraudulent IDs and credit cards, and from renters who keep the vehicle past the contracted return date without payment, extensions or communication with us.

For overdue rentals, we need to report the vehicle as stolen after we've exhausted all efforts to retrieve it from a customer who hasn't returned it, isn't responding to repeated efforts to contact us, and/or isn't continuing payment. Even then, alerting the authorities is a last resort and follows an extensive process that typically takes six-to-seven weeks, during which time we typically aren't getting paid for the rental car, we don't know its location, and we could face liability for accidents or crimes associated with the vehicle.

Lawsuit

We have extensively reviewed the claims in the lawsuit. The vast majority of the claims involve renters whose arrests resulted from their failure to return rented vehicles for weeks past their due date, in violation of the rental agreement and despite our repeated attempts to communicate with them about the status of the vehicle.

Overall, the lawsuit makes baseless accusations and wild exaggerations. We have compiled significant evidence and we will vigorously defend our case in court.