RocketGoBoom

I have been preparing for an upcoming Hertz rental in Germany and reading this forum (and others) I have come across numerous reports of repair scams in foreign countries

The general scam seems to be that extremely minor (tiny scuff or scratch) damage, that would be unnoticed by 99% of consumers, is spotted right away by the Hertz employee when returning the car.
The scam seems obvious because the Hertz employees are going right away to the damage location and trying to bill it to the consumer.
They are hoping you just have your credit card insurance pay for it, they don't actually repair the tiny scuff marks, then bill the same damage to the next unsuspecting customer that comes along.

The way around all of these scams is to file for arbitration against Hertz in the USA.
It does not matter that the issue happened in another country, if you made the reservation through their main website Hertz.com then the USA headquarters in Estero Florida is subject to the arbitration clause.

Section 10 of the terms has the arbitration clause.
https://www.hertz.com/rentacar/membe...sAndConditions

You or we may commence an arbitration by providing a written demand for arbitration to the other (to us, The Hertz Corporation, 8501 Williams Road, Estero, FL 33928, Attn: Arbitration) and two copies of the demand to the AAA. If You seek $10,000 or less through arbitration, we will reimburse You for any AAA required filing fee.

The filing fee with the American Arbitration Association (AAA) is $200 for consumer arbitration. Hertz is required to pay this back to you (and they will do so).
Here is the real leverage you have over Hertz (and every other company with an arbitration clause).

https://www.adr.org/sites/default/fi...Schedule_1.pdf

It costs Hertz (or any company) about $4,900+ just to respond to your arbitration complaint.
They have to pay the AAA a filing fee ($300), repay your fee ($200), case management fee ($1,400), hearing fee ($500), arbitrator compensation per day ($2,500).

So just the process to start the dispute, to discuss the car rental bill over a scratch, will cost Hertz HQ about $4,900.
So how does the Hertz legal department in Estero Florida handle these issues when they receive your arbitration claim paperwork (which takes only 10 minutes to fill out)?
The in-house legal department for Hertz (and just about any company) will contact you by email and try to resolve the issue outside of arbitration in order to avoid paying that $4,900 in arbitration fees.

As long as your demands are less than $4,000 then it really makes zero sense for Hertz, or anyone, to put up a fight.

When this happened to a family member of mine recently, I helped walk him through the arbitration paperwork process and how to handle the negotiations.
The end result was the bogus charges (extra insurance he didn't request) were cancelled, plus the entire rental was also refunded.
The end result was a free 3 week car rental as a penalty for shady practices by the car rental desk at the airport.

If you did your car rental through Expedia or another company, just check. They all typically have arbitration clauses in their agreements.
Here is Expedia's as an example.
https://www.expedia.com/loyaltyrewar...ards/terms.htm

This strategy of using arbitration to resolve your disputes is extremely effective for minor disputes of less than $5,000.
Almost all arbitration clauses in the Terms agree to repay your $200 arbitration filing fee in exchange for you giving up your right to file a lawsuit.

I have used this arbitration process a handful of times to resolve issues where customer service gave me the run around.
Equifax, Hertz, LA Fitness, Best Buy. If they are trying to screw you over, file for arbitration.
They cave usually right away, refund your money and pay your $200 filing fee.

If you have any questions, post them here. I will try to answer.

garykung

Congratulations on resolving the issue. However, why not Small Claims Court?

Generally, corporations will allow Small Claims without compelling arbitration. And the cost for Small Claims Court is significantly cheaper, reimbursed or not (they will reimburse the fee when the issues are resolved).

Also - Equifax is not subject to arbitration unless it is related to the paid services Equifax has provided.

RocketGoBoom

Arbitration is free. The $200 fee that the consumer pays to start the process is always repaid by the company, regardless of the outcome of the arbitration.
Quite literally, I can fill out the AAA consumer arbitration form in 10 minutes, make 2 copies of it, mail one to AAA, one to the company (Hertz) and keep one for myself.
It is just name and address of both parties, and 3 lines for the basic claim
Violation of your state version of the Consumer Protection Act is enough for the "claim".
No details required at this point. There are only 3 lines provided on the form, so no details needed.

If you try small claims court, that is significantly cheaper for the company. There are no $4,900 in arbitration fees. You then lose your leverage to get the settlement you want.
The purpose of sending them the AAA claim form is because there is no way for the company to avoid the AAA fees.
They agreed to pay those $4,900 in arbitration fees in the terms (TOS) of the contract.
Also, they typically have an outside law firm handle the arbitration process, so their expenses are likely well over $10,000+ with their lawyer included.

Always demand an in-person hearing in your location county.
That is a requirement that you can demand in arbitration, forcing the company to hire a law firm where you live or pay their lawyer to travel.

If your dispute is merely about some amount of money worth $1,000 to $4,000 then it makes zero financial sense for them to pay the arbitration fees and their outside law firm.

For example, if Hertz tries to stick you with scam repair bills hoping you will just have your credit card insurance reimburse you, then arbitration is excellent.
Also, if you refuse to pay, the rental car company might try to add you to their dreaded Do Not Rent (DNR) list.
Arbitration negotiations result in a settlement agreement. You can include a clause that requires them to remove you from the DNR list or require that they not retaliate against you with the DNR list.
We did arbitration versus Dollar Car Rental for my brother-in-law, which was handled by the Hertz legal department in Estero Florida.
They caved immediately and as a penalty we got a full refund of even the legitimate auto rental charges. So they had a 3 week free car rental.

Small claims court does not provide any of that leverage, which is why I don't use it if I can find an arbitration clause.

Regarding Equifax, it is easy enough to add a claim related to their website paid service so that the arbitration clause does apply.
The lawyers always try to argue that the arbitration clause does not apply. But that is easy to dispose of the argument.
If it is an issue for the arbitrator to decide, then the company has to pay the $4,900 in fees first for the arbitrator to be assigned so they can rule on jurisdiction.
The arbitrator is typically some lawyer in your local county that the AAA pays $2,500 per day to handle the case.

https://www.equifax.com/terms/

The contract clearly states that FCRA (Fair Credit Reporting Act) issues are not subject to the arbitration clause because Equifax prefers Federal Court.
So instead you make the claim sometime that is not FCRA related. I used my states Consumer Protection Act.
Therefore, since I was forcing arbitration for violation of the Florida Consumer Protection Act, Equifax does have to pay the $4,900 in fees.
The end result of that battle was, Equifax paid their $4,900 in fees, paid their lawyer some amount (I suspect $10,000+ based on the time spent)
and then in the end they still deleted the info in dispute on my credit file and paid me the $200 reimbursement for my arbitration fee.
All I had to do was respond to emails. It was easy. No trips to court, no complex court filings.

The key is to make a settlement offer at the beginning of the process.
Include a letter with the AAA form that you send to the company. In your letter, make it clear you are willing to resolve the issue for "X".
Either a refund, they do something (remove me from DNR list), waive their fake bills for damage, etc.
Whatever it is that your dispute is about, make it clear you will dismiss the arbitration, they can avoid the $4,900 in fees, if they settle early.
Most of the time, they will do so.

garykung

Your premise of arbitration is not about having a merit case. Instead, you attempt to waste a sizeable amount of money of the business in attempt of pushing for a settlement offer. It is a dangerous proposition.

I can see that many companies may compromise as your so-called settlement does not seem to have any actual monetary value (for example, you pushed binding arbitration against Hertz in order to force Hertz dropping the bogus charge). The danger of binding arbitration is if you have a merit case, your damages will be significantly lower. That happened to me once (the case was forced to settle before arbitration as the Court compelled arbitration). Also - in some states, small claims cases can be appealed. But binding arbitration is binding. So if you actually lose, you will be forced to pay.

Last but not the least - the arbitrator has the authority to award costs against the losing party, despite what you have claimed. Because it is a binding arbitration, fair or not, you will be forced to pay.

You are simply lucky. It does not mean binding arbitration is a good option.

RocketGoBoom

Your accusations are not relevant and you presume falsely that my claim was in bad faith.
In the case of the rental car repair scams, that type of scenario for a dispute in arbitration is perfect. It is a small amount of money and perfect for arbitration.
Arbitration is far easier in terms of paperwork than even small claims court.

All of life is about negotiations and using the leverage available to you to obtain the desired outcome.
This is not about playing fair and giving away the high ground before going into battle.
Do you really think their legal department or their law firm will thank you for giving up all of your advantages and handing it to the other side?
There are winners and losers in life. If you want to lose continually, feel free to adopt the loser mentality before defending your rights.

They gave us an arbitration option in their terms of service, so there is absolutely nothing wrong with using it to your advantage.
And I cannot imagine why you would willingly bend over and invite a shady business to steal your money without retaliation.
If a shady company is trying a scam like the "rental car repair" scam described above, then retaliation via arbitration is appropriate.

There is no danger to arbitration. The only scenario where an arbitrator might award costs is if your claim were frivolous and without any merit.
Since that is NOT the situation, arbitrators won't penalize a consumer for bringing an arbitration case under the terms of the contract.
The arbitrators are typically grateful that the consumer filed the case. The arbitration case resulted in that local lawyer/arbitrator getting hired for $2,500 per day.
Your suggestion that it is "dangerous" is ridiculous and ignorant.

garykung

I did not talk about anything about the claim. However, your OP did make a impression of "let's waste the company $4,900+ and try our luck".

Unfortunately, that is true. Not every state has adopted a statewide form, like California. Service of Process can be also a PITA to many.

It is not an option. You are required to do that. The Small Claims option is available only when the amount in question is below the statutory limit, which varies by states.

I have never suggested that. Instead, what I have been expressing is using arbitration as a tool to do this is not wise.

The schedule you have attached did mention "except as may be required by applicable law".

I honestly don't know what is the definition of "applicable law". But it is a settled issue that a prevailing party is entitled to cost through law or case precedent. So if the arbitrator applies this legal principal to the arbitration against the consumer when the consumer is a losing party, the consumer will be responsible for that $4,900+ of arbitration fee.

Keep in mind - arbitrator's decision is not appealable and is binding.

The problem is this is definitely your assumption when the law says otherwise.

Cost recovery is always allowed regardless of faith. Acting in good faith does not mean you are off the hook.

Should the lawyer thank you for it by creating the opportunity and grant your case by default? Now who is sounding more ridiculous?

You have no such right to say that when you have never in the dark side of the arbitration, which I did.

Specifically, while I am prohibited to disclose the detail of such settlement agreement, because of binding arbitration, my settlement was cut for more than 50% minimum.

Often1

This is the arbitration agreement for The Hertz Corporation (US). The allegedly scam claim has likely -- I say likely because I am not certain -- been made by a European affiliate which may even be a separate entity entirely.

I also question whether it much matters that Hertz reimburses the R-3 administrative fee because the parties split the R-4 neutral arbitrator's fees.

RocketGoBoom

All disputes related to a Hertz reservation using www.Hertz.com can be arbitrated in the county of the your home billing address.
The arbitration agreement is "broad and includes, without limitation, any claims relating to any aspect of the relationship or communications between us'.

Quote:
This arbitration Provision's scope is broad and includes, without limitation, any claims relating to any aspect of the relationship or communications between us, whether based in contract, tort, statute, fraud, misrepresentation, equity, or any other legal theory. It is governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. In any arbitration under this Arbitration Provision, all issues are for the arbitrator to decide, including his or her own jurisdiction, and any objections with respect to the existence, scope or validity of this Arbitration Provision. The arbitration will take place in the county of Your billing address unless agreed otherwise.

In another section of the terms of service related to Europe, there is no requirement that US residents go back to another country (like Germany) to litigate disputes there. That is not reasonable to expect anyone to do. It is too costly and would be designed to take advantage of consumers to fraudulently steal small amounts of money regularly through jurisdictional games.

When we did arbitration versus Dollar Rent A Car (aka Hertz legal department), they did not even bother to question the jurisdiction of using the American Arbitration Association.
They knew it was a waste of time.

The parties do NOT split the arbitration fees. The Hertz arbitration clause states specifically that they will cover all fees, including repaying your $200 filing fee, as long as the amount in dispute is less than $10,000.

Quote:
If You seek $10,000 or less through arbitration, we will reimburse You for any AAA required filing fee.

RocketGoBoom

Oh, you want to play that game where you break up every sentence and reply out of context.

No, that was your dishonest interpretation of my post.
You taking my statement and twisting it into your fake interpretation is your problem, not mine.
Perhaps you are inclined to waste everyone's time so your mind went that direction.
Your responses in this topic so far lead me to believe that you like to twist things out of context and be intellectually fraudulent.

Service is easier with arbitration. Just a first class letter. There is no requirement for a process server.
That is another plus in favor of arbitration.
Choosing small claims is the loser strategy.

Another clueless statement because you have never done this and have not yet even bothered to read the rules before engaging in this discussion.

And your statement was utterly lacking in any experience or knowledge to make such a statement.
Your statement was useless.

That is the difference between you pretending to know how it functions versus how it actually functions in real life.
They don't award costs if the arbitration was brought in good faith, even if you lose.

I get it, you are trying to sound like you know this subject, but other statements in your post make it clear you have never done this.
So please stop trying to create FUD on this subject. If you don't like this topic, feel free to move along and stop polluting the subject matter.

jim32190

Mate, if you have fake and frivolous damage claims brought against you, just call David E Howe, Subscriberwise CEO and Credit Czar - he’s fighting this battle with EHI -
https://mobile.twitter.com/SubscriberWise

I am sure he would love to hear your story. He took EHI to court and lost because they hired a lawyer. If the company cared enough to fight, they would - be careful what you wish for.

garykung

Consumers are subject to a different set of rules. So R-3 and R-4 fees are not applicable.

You call it whatever you feel. But that's exactly my interpretation.

Simple does not mean good. Small Claims is not the loser strategy as it seems.

At the minimum, in the states that allow Small Claims appeals, the Small Claims judgments are appealable. But withing binding arbitration, even the decision is so wrong, that's it.

You are betting on someone who may not have adequate training to judge on something.

I know exactly what I am talking about. That's why I have been trying to avoid binding arbitration at all costs.

For legal reasons, I won't get into this. But I am more experienced than you think.

They can, if the law allows it. The "applicable law" exception is connected with the "bad faith" exception with an "or". So they are separate exceptions.

Whether you are in good faith or not, it is not up to your interpretation but the arbitrator. Again the decision is not appealable, right or wrong.

Right - I have never done it. It is because I know how bad it can turn out.

I usually don't engage in endless arguments. But since this is what you want, I am game this time.

At the minimum, when you say how good is arbitration, you seem to forget the fact that many reputable articles suggest an opposite approach, like this one:

https://corpgov.law.harvard.edu/2019...med-consumers/

Prevailing in arbitration claims do not make you an expert in the field.

RocketGoBoom

Your problem is, you don't know how to apply leverage and use it to your advantage. You seem to think every arbitration goes the full 10 rounds and there are huge financial risks.
In reality, 90% are resolved without even getting to the first hearing.
The company usually makes a financial decision that if under $5,000 then it is not worth it to engage in a long term dispute with arbitrators and outside law firms.
90% resolve the matter right away in your favor as long as your offer of settlement is reasonable.

You don't sound like a reasonable person based on your behavior in this topic, so it would not surprise me that you are so scared of arbitration.

Perhaps if you had a better strategy you would not be so afraid of succses.

There is no downside to "losing" in arbitration. That is where you are wrong. You think judgments actually result in someone writing a check.
90% of the time the "winner" of a lawsuit collects $0.00 after they "win".

The best resolution is a settlement.
Reasonable people usually get there quickly, especially when the claim is made in good faith for legitimate reasons.

You probably had a bad experience because you filed a fraudulent claim, the company saw that you were a fraud and they called your bluff.

Often1

"Filing fee" is R-3. I was referring to the R-4 (arbitrator's fee). Expressly not covered.

You still haven't answered the question as to whether the entity which you rented from in Europe is The Hertz Corporation (US). Doesn't matter what's more convenient. The question is whether your dealings were with the entity with the arbitration clause.

garykung

I can give you this, given that 95% of civil litigation do not end up in trial.

However, in comparison, this is as par as Small Claims as well.

I am reasonable. And I am scared of arbitration.

If arbitration is not bad for consumers, why would CFPB ban arbitration rule at the first place, which was eventually overturned? Why would the Democrat-controlled House has passed Forced Arbitration Injustice Repeal Act?

You may be the genius and I may be the idiot. But with your wisdom, can you explain why there is a force pushing away mandatory arbitration against consumers?

I won't mention too much as I am bound by the confidential settlement agreement.

I had a winning lawsuit that can potentially award me in as much as $80,000 in punitive damages. But because the defendant was able to compel arbitration, my settlement amount has been reduced drastically, as I know I won't get that much from arbitration.

IANAL. I collect a check, more than the costs, each time I won/settled a case. No exception. And my case count is kind of high for a pro se litigant.

That's absolutely correct. But using arbitration does not increase your chance of settlement.

The judge handling the case was a moron, as he has dismissed my prior case for lack of standing (Note - to those who has adequate legal knowledge, you should be able to tell what kind of court we are talking about). But this time, he did not dismiss the case after interrogated me for the case, but instead he compelled the case for arbitration. He would have dismissed the case if, as you have said, my case was a bluff.

Also - the parties have attempted to reach a settlement but failed.

RocketGoBoom

Consumer arbitration rules require the company to pay the arbitrator's fee.

https://www.adr.org/sites/default/fi...Schedule_1.pdf

The only fee the consumer has to pay is the $200 filing fee, and most arbitration clauses agree to repay that to you, win or lose, as long as the amount in dispute is less than $10,000.


If you are a US Resident and made your reservation through the www.Hertz.com website, it doesn't matter who owns the entity in Europe.
It doesn't matter if it was a franchise using the Hertz name or some other shell corp.
The Hertz arbitration clause is very broad and they agree to resolve any disputes you may have with "Hertz" via arbitration with the American Arbitration Association.
Furthermore, Hertz agrees to have the arbitration hearing in your local county where your billing address is.

You don't have to hire a lawyer in Europe or deal with foreign jurisdictions over a couple of thousand dollars in disputed rental car damages.
Hertz agrees to arbitration in the USA to handle anything.
It is all written plain as can be in the TOS of the website.