Protect yourself from fraudulent rental-car charges

After returning home from a recent business trip, Virginia-based marketing representative Tres Elliott got an unpleasant surprise.

He learned that the company that had supplied his rental car sent a bill to Bou-Matic Inc., his Madison employer, for damage to the car's rear bumper while it was in Elliott's possession. The details on the multipage form were sketchy, simply stating "damage to rear bumper cover."

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The rental company demanded payment of $1,125 plus an "administrative fee" of $150.

Instead of submitting the claim for payment under Bou-Matic's insurance policy, company sales administrator Sandie Custer advised Elliott, who knew nothing about the damage, to request more information, including photos and details of the car's rental history.

The nationally known rental company did not respond to Elliott's frequent voice and e-mail messages, but he eventually received good news by mail. With no explanation, the claim had been dropped.

This is not an isolated incident. The car-rental industry, slow to recover from the post-9/11 travel slump, is apparently becoming much more aggressive in pursuing claims for minor damage such as windshield chips and door dings that in the past were generally ignored. In some reported cases, charges were excessive, occasionally exorbitant, and claims of damage were poorly substantiated.

Jeff Miller, a travel lawyer with the East Coast firm of Lipschultz & Miller, calls chasing customers who dent or scratch cars a "growth business" for cash-strapped rental-car companies.

Kevin Miles, president of the American Car and Truck Rental Association, a trade group, argues that rental companies have good reason to take a hard line, contending such damages eat away at the corporate bottom line. Enterprise Rent-A-Car, the largest car-rental company in the United States, says it loses about $60 million a year because of uncollectible damages.

To make matters worse for the business traveler, an increasing number of insurance and credit-card companies are reluctant to pay claims, instead tossing the bill back to the renter.

The traveler who challenges or refuses to pay the damage claim might be confronted with threats of court action or additional administrative fees, often leveled by claims-management companies that have taken over the collection process.

What steps can corporations and business travelers take to guard against false or inflated damage claims? First, it's important to know that policies and practices can vary widely among rental-car locations, even those operating under the same banner.

A Hertz operation, for example, can be company-owned at one airport and a franchise operation at another, resulting in procedural and contractual differences that might not be apparent to the renter until a problem arises. Hertz corporate headquarters will probably have limited clout if the offending rental location is owned by a franchisee.

The best way to cope with this potholed playing field is to always carefully inspect the rental car before leaving the car lot. This can be a challenge on two levels: time-strapped business travelers rarely have moments to spare and it's easier to just toss luggage and laptop into the trunk and drive away.

Financially challenged car-rental companies, especially those at smaller locations, have been reducing staff in recent years. Finding someone in the car lot to document any notable damage can be frustrating and time consuming. Do it anyway. If you can't find someone to help in the inspection process, refuse to take the car.

Existing damage should be detailed on the company's official form, dated and signed by both parties. (Don't forget to keep a copy.) Be certain that everything on the form is legible and if you are carrying a camera, take pictures of significant abnormalities for future reference. Keep in mind that even the simplest door ding can be called into question at a later date.

To avoid false charges for after-the-fact damage, repeat the procedure when you return the car. While the majority of car-rental companies operate ethically, there is no way to know which one you are dealing with until a problem arises.

If you get a bill for damage to a rental car that you know you did not cause, don't hesitate to challenge the charges. Be persistent and do not be intimidated by heavy-handed threats. Present your supporting documents and pictures and request that the rental company document their claims, too.

Also, know the terms of your insurance coverage and carry proof of insurance with you whenever you travel.