LOS ANGELES (CBSLA.com) — If you search Dollar Rent A Car on Yelp, you will find reviews similar to this: “Do not rent a car. They will scam you.”
Another review reads: “Lying Agent. When we pointed out that we did not want the insurance, he blatantly lied and said that CA law requires consumers to purchase insurance.”
Erik Bochove said that’s what he was told when he traveled to Los Angeles from New Mexico for a wedding.
“I asked if that was mandatory since I was fully already covered by my own insurance,” Bochove said.
But he said an agent at the Dollar at LAX insisted that he bought additional coverage. So, Bochove purchased about $100 in coverage he said he did not want. That’s more than what he paid for the car itself.
Armed with a hidden camera, a producer working with CBS2/KCAL9 Investigative Reporter David Goldstein went to the Dollar office at LAX to inquire.
She asked whether she had to buy additional insurance even when she already had her own. The agent said: “You can use your liability, ma’am. But the one I recommend is the state damage waiver.”
A “Loss Damage Waiver” or LDW is an insurance-like product that may well be covered by your own insurance.
“That way, if anything happens to our car, you basically walk away with nothing to pay, any scratches, any dents if somebody hits the car,” the agent continued. Goldstein’s producer said: “No, I don’t think I need that.”
But the agent was persistent. “It’s only $11 a day. Saves you a lot of headaches if anything happens to our car,” she insisted.
John Mattes is an attorney and consumer advocate. “They operate on a commission basis. If they don’t make X amount of upsells, they can be terminated,” he said.
Even though the agent did eventually concede it was our producer’s choice, Mattes said she violated state law because she didn’t utter the magic words required in every transaction: “It may duplicate what you already have.” Mattes said: “The phrasing is created by the state Legislature.”
A class-action lawsuit filed in California alleges that for the past four years, Dollar has ignored California law to “victimize consumers resulting in a loss of money to consumers” to the tune of “millions in fees” nationwide and beyond. A similar complaint is filed in Colorado.
California law also requires the customer’s signature to confirm that the agent told them that coverage could duplicate their own. It’s something that agent did not do and something that may be tough to find in the seven-page rental receipt.
With his camera rolling, Goldstein went to speak to the Dollar agent who helped his producer. “You never informed her she didn’t have to get insurance. That’s a violation of state law.” But the agent refused to talk about the matter. So did her manager, who referred Goldstein to the company’s media relations department.
Goldstein called Hertz, the parent company for Dollar, which provided the following statement:
“We train and manage our employees to comply with all state laws and to meet the highest ethical standards. Our policy in California is to provide disclosure about our loss damage waiver (LDW) product in several ways for each rental transaction, including verbally at the counter, in our written rental agreement, and through on-site signage. We apologize if any consumer in the state was not provided with the verbal disclosure that LDW may be partially or fully duplicative of similar protection available through their personal insurance, credit card or other sources. We will take this opportunity to remind all of our employees in California to follow our policies and comply with state law.”
But this is not the first time Dollar has been in trouble for this kind of behavior. In 1989, the company was fined $100,000 for “false and misleading statements” for pressuring customers to buy loss damage waivers, the kind of behavior similar to what the company is accused of 26 years later.
Bochove filed a complaint with the Better Business Bureau claiming Dollar took advantage of him and thousands of other unsuspecting consumers, according to the class-action lawsuits. The Better Business Bureau was able to negotiate a $99 credit for Bochove.