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Europcar under investigation for defrauding car hire customers

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Europcar investigated for unfair trading and defrauding customers.
Europcar investigated for unfair trading and defrauding customers.

Europcar, one of the largest international car rental businesses, with a strong presence in the UK, are under investigation for fraud by the Trading Standards’ Leicester office following customer compaints about unfair and excessive charges for vehicle damage repair and windscreen replacement. Trading Standards raided Europcar’s UK office on Friday.

The essence of the allegations are that Europcar benefits from preferential contract terms with repairers and windscreen replacement suppliers.  These benefits are not passed on to Europcar’s customers. Instead, Europcar suppliers collude with Europcar by invoicing for services provided at an inflated rate, which is used as a basis for recharging customers. It is alleged that Europcar suppliers subsequently reinvoice Europcar at a lower rate, which is the cost paid by Europcar. Evidence gathered by one national newspaper suggests that the charges to Europcar customers may have been inflated by up to 300% in some circumstances.

As reported in the Daily Telegraph newspaper, legal experts described Europcar’s actions as “serious” and warned that its repairs policy could be in breach of the Fraud Act 2006 as well as the Consumer Rights Act 2015. Consumer groups have accused Europcar of “exploiting” customers.

A spokesman for Europcar said to the Daily Telegraph newspaper

Europcar takes the allegations very seriously and is conducting a thorough investigation. It can make no further comment at this point.”

This is of course total nonsense and Europcar have been caught with their pants down. Europcar’s own internet published terms and conditions clearly state:

More substantial damage impairing the use of the vehicle and requiring its temporary immobilization, such as bodywork damage. This type of damage will be evaluated by an independent expert and charged according to the expert’s report or a cost estimation made by an independent auto-repair garage.”

In common with most large vehicle fleet operators Europcar operate a centralised vehicle accident repair management programme, under which Europcar’s head office management organisation contract with a network of vehicle repairers.

According to website “Linkedin” a Mr Robert Gough claims to have held the post of  Motor Network Manager at Europcar,  since August 2013, with responsibiities including:

“To develop strong supplier relationship management with our appointed Motor Repair Network….

“The building and development of the new fit for purpose set of repairer contractual agreements taking through to full implementation.”

The current Terms of trade are stringent, but repairers are forced to sign up to low invoicing costs and other Spanish practices in order to keep the work. The blame should not be laid at their door. Europcar repairers are as independent as the nail is to the hammer.

In September 2014, Europcar Managing Director Ken McCall told Fleet News he:

accepts that damage charging in the rental industry has long been a bone of contention between customers and providers.

“On issues such as damage charges, resolution can only be found by engaging in a dialogue and then acting upon the feedback – something Europcar is very passionate about.”

Fine words indeed. I wonder whether Mr McCall has ever tried to enter into a dialogue with a rental conmpany as a customer!

The car hire industry has long been subject to customer complaints about unfair practices.  These have included excessive CDW waiver premiums, refuelling costs and hidden adminstrative charges. Opaque invoicing practices are but the latest in a succession of scams exposed.

This is not the first time that car repair cost inflation has been the subject of legal scrutiny.

In September 2013 District Judge Platt in Romford County Court threw out a claim by Royal Sun Alliance Insurance against another insurance company for vehicle repairs on the basis that the repair costs had been artificially inflated by invoicing through a wholly owned RSA subsidiary.

RSA decided to appeal, and in December the Court of Appeal found in their favour. Not for the first Appeal Court judges were swayed by legal precedence rather than common sense.

Now the wheel has turned full circle, and consumers will watch the result of the Trading Standards enquiry with interest. Will Europcar plead the RSA result in defence? Will Europcar and its management be convicted for fraud, and the RSA case revisited?

Whatever the outcome, agewhatage will be among the first to report on it.

 

 

 

 

 

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