Europcar slammed by ACCC

Europcar slammed by ACCC

Europcar had been slammed with a $100,000 for making false or misleading representations about consumers’ liability in the event of vehicle damage.

The Federal Court has declared that a number of terms in Europcar Australia’s 2013 standard rental agreement to be unfair, and therefore void, in proceedings brought by the Australian Competition and Consumer Commission.

The Court found that various terms in Europcar’s standard rental agreement were unfair because they held consumers liable for vehicle loss or damage regardless of whether the consumer was at fault.

The terms were also found to be unfair because consumers were liable for vehicle loss or damage when they breached the rental agreement, no matter how trivial the breach or whether it had any connection to the loss or damage caused.

Further findings included from December 2013 to July 2014, Europcar made false or misleading representations on its website that consumers’ liability for vehicle accident damage would be limited to a “Damage Liability Fee” of $3650, or less if the consumer purchased Europcar’s “extra cover” products.  In fact, under Europcar’s standard rental agreement, consumers’ liability was not limited to these amounts in cases of overhead, underbody or water damage, even when “extra cover” products were purchased.

ACCC Deputy Chair Dr Michael Schaper said the decision was an important one, as it makes it clear to car rental companies that they cannot simply rely on contractual terms to hold consumers liable for any and all damage that may occur during a rental period, regardless of the circumstances.

“Terms in standard form rental agreements must be fair,” Schaper added.

Europcar has amended its standard rental agreement to remove the unfair terms. The misleading statements have also been removed from Europcar’s website.

In resolving these proceedings Europcar agreed to facts and joint submissions to be put to the Court and consented to orders for injunctions, corrective advertising and costs.

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