Rent a car in European Union - Europejskie Centrum Konsumenckie

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CAR RENTAL CONTRACTS
An analysis of European cross-border complaints
and consumer protection
EUROPEAN CONSUMER CENTRES NETWORK
NOVEMBER 2005
An analysis of European cross-border complaints
and consumer protection
A study of the European Consumer Centres network
CONTENTS
SUMMARY..................................................................................................................... 6
PROLOGUE ................................................................................................................... 8
INTRODUCTION ........................................................................................................ 10
Part I. COMPLAINTS ABOUT CROSS-BORDER VEHICLE-HIRE
CONTRACTS ............................................................................................................... 11
PRELIMINARY COMMENTS ..................................................................................... 11
1. Special factors regarding Internet booking................................................................. 11
a) The value of an electronic booking ........................................................................ 11
b) Deceptive advertising............................................................................................. 13
2. Unjust charges, the most common complaint from consumers.................................. 14
I. BEFORE HIRING THE VEHICLE............................................................................ 15
1. Discrimination based on age ...................................................................................... 15
2. The general adhesion terms of the contract ................................................................ 16
3. The language of the contract ...................................................................................... 16
4. The price ..................................................................................................................... 17
5. Variable rates.............................................................................................................. 18
6. Payment of a deposit as a guarantee........................................................................... 18
7. Insurance conditions ................................................................................................... 19
8. Second driver.............................................................................................................. 20
9. Driving in other countries........................................................................................... 21
10. Vehicle accessories................................................................................................... 21
11. Intervention of intermediaries .................................................................................. 22
II. COLLECTING THE VEHICLE................................................................................ 23
1. The agreed vehicle is not available ............................................................................ 23
2. Condition of vehicle at time of delivery..................................................................... 24
III. DURING THE HIRE PERIOD ................................................................................ 25
1. Poor vehicle operation and road assistance ................................................................ 25
2. In the event of an accident or damage caused during the hire period ........................ 26
3. Use of vehicle in special circumstances ..................................................................... 29
4. Customer service during the vehicle hire ................................................................... 30
IV. RETURNING THE VEHICLE ................................................................................ 30
1. Return on a later date.................................................................................................. 31
2. Return on earlier date ................................................................................................. 32
3. Return to different office ............................................................................................ 32
4. Office closed when vehicle is returned ...................................................................... 33
5. Damage to vehicle attributed to consumer ................................................................. 34
a) Vehicle not inspected by the company on its return............................................... 35
b) Vehicle inspected by the company on its return .................................................... 36
6. Disagreement with valuation of damage .................................................................... 37
7. Damage caused by third parties.................................................................................. 39
8. Vehicle returned with empty petrol tank .................................................................... 39
9. Customer service after the contract has ended ........................................................... 40
Part II. CURRENT CONSUMER PROTECTION MECHANISMS...................... 42
I. REGULATIONS IN FORCE AND IN PREPARATION .......................................... 42
1. The Unfair Contract Terms Directive......................................................................... 42
2. The Distance Selling Directive................................................................................... 43
3. The Unfair Commercial Practices Directive .............................................................. 44
4. Proposal for a Directive on Services .......................................................................... 45
a) Effects on consumer protection ............................................................................. 45
b) The position of the European car hire sector.......................................................... 46
c) Discrimination based on nationality or residence .................................................. 46
II. ENFORCEMENT OF THE UNFAIR TERMS REGULATION .............................. 47
1. Injunction actions and dialogue with traders.............................................................. 47
2. The UK Office of Fair Trading................................................................................... 48
3. The Irish Office of the Director of Consumer Affairs................................................ 49
4. The French Commission for Unfair Terms ................................................................ 49
5. The Spanish consumer association OCU.................................................................... 50
6. The CLAB European Database .................................................................................. 50
III. REDRESS SCHEMES: OUT OF COURT SETTLEMENT PROCEDURES ........ 50
1. The ARN in Sweden.................................................................................................. 51
2. The CIMAAL in Portugal .......................................................................................... 51
3. The Transport Arbitration Board in Spain.................................................................. 52
IV. SECTORIAL INITIATIVES AND SOFT LAW..................................................... 52
1. The Codes of Conduct ................................................................................................ 52
a) The UK BVRLA .................................................................................................... 53
b) The Car Rental Council of Ireland ......................................................................... 53
3. Standard contracts ...................................................................................................... 53
4. Sector Redress Schemes ............................................................................................. 54
a) The CNPA in France .............................................................................................. 54
b) The UK BVRLA .................................................................................................... 55
c) The Car Rental Council of Ireland ......................................................................... 56
V. INFORMATION AND EDUCATION CAMPAIGNS............................................. 56
Part III. TOWARDS A BETTER CONSUMER PROTECTION ........................... 57
I. STRONGER ENFORCEMENT OF THE LEGISLATION ....................................... 57
1. Regulation on unfair terms ......................................................................................... 57
2. Injunction action......................................................................................................... 58
3. CLAB European database .......................................................................................... 59
II. REVIEW OF CONSUMER ACQUIS....................................................................... 59
III. NEW EUROPEAN REGULATION ........................................................................ 60
1. EU Competences ........................................................................................................ 60
2. A specific car rental regulation................................................................................... 60
3. A single directive on Passengers’ Rights ................................................................... 62
4. Regulation of the revocability of the payment ........................................................... 63
IV. A SPECIFIC ADR FOR CAR HIRE ....................................................................... 65
V. SECTORIAL SOFT LAW ........................................................................................ 65
1. Background................................................................................................................. 65
2. Soft law at EU level.................................................................................................... 67
3. Codes of conduct ........................................................................................................ 67
4. Standard contracts ...................................................................................................... 68
5. Sectorial redress schemes ........................................................................................... 68
VI. INFORMATION AND EDUCATION CAMPAIGNS ........................................... 69
VII. PUBLIC CONSULTATION BY THE EUROPEAN COMMISSION .................. 69
ANNEXES ..................................................................................................................... 70
An analysis of European cross-border complaints and consumer protection
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SUMMARY
This study, which is being carried out at the initiative of the Barcelona ECC, aims to
provide a new perspective on vehicle hire contracts by focusing on complaints submitted by
consumers in order to assess the business practices in this sector and relate them to
regulation of the specific provisions in the contract.
The first part of the study shows how the cross-border nature of complaints received by the
ECCs poses additional problems. Moreover, the use, both on-site and on the Internet, of
adhesion contracts with general conditions the equanimity of which could be questioned,
together with the business practices used by vehicle hire companies, puts consumers in a
weak position when it comes to upholding their rights. The more representative complaints
are put in chronological order according to the contractual phase it is produced.
It can be concluded that, regardless of the category the complaint was classified, most of
them deal to a certain extent with the fact that consumers feel vehicle hire companies have
unfairly charged their credit cards when these were provided to the company as a guarantee
to cover expenses in case anything would happen during the hire period. The analysed
complaints reveal that these charges are very often made without being accompanied by any
kind of explanation and set up a disappointing surprise for the consumers. A negative
conclusion of this practice is that these charges are perceived by consumers as non
reasonable and non acceptable.
Some other unfair commercial practices are also described in every point of the first part of
the study, which should be corrected to improve the consumer confidence in this business
sector. The members of ECC network suggested possible solutions for specific problems
that were included in the study.
The second part analyses the existing mechanisms for consumer protection and shows how
horizontal European Directives contribute to improve consumers’ confidence on crossborder contracts without forgetting out of court procedures and other sectorial initiatives.
The Directive on Unfair Terms in Consumer Contracts plays a relevant role since it can
contribute to avoid the terms establishing unspecified and hidden charges or those that limit
the professional's liability. Some governmental and non governmental organisations took
advantage of the Directive and implemented important measures to avoid unfair terms
included in the hire vehicle contracts used by the companies in their respective countries.
The Directive on Consumers’ Distance Contracts is applied to those cases for which an
agreement for a car hire was concluded through the Internet. The Directive on Unfair
Commercial Practices is also a key point but the existence of evidence for these alleged
practices could be a practical problem for consumers.
Out of court settlement procedures must be taken into account for better consumer
protection and in this sense the wide number of more or less specialised ADR bodies
existing in our countries facilitate a possible redress scheme for the consumer, although
when the complaint relates to a cross-border case it could face some problematic practical
aspects.
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The existing sectorial initiatives for consumer protection are also explained in part two. In
this sense, the codes of conduct currently used by some professional organisations can but
not always respond to a better protection of consumer interest. Sometimes it sets up a
cosmetic solution for a better image of the sector within the country. A serious initiative at
European level is also missing.
In the third part, different possible regulations regarding the car rental sector in relation to
the services provided to consumers are explained as means to improve their protection at
European level. Although the ECC Network does not take side with none of them, we
would like to support a general debate of the different interested parties on this issue.
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PROLOGUE
Contracts governing the provision of vehicle hire are not regulated by special rules in any
EU country. As a result, the contents of such contracts should, at the very least, observe the
regulations governing the hire of objects, together with the specific regulations concerning
consumer and user protection. Moreover, given that the contracts are adhesion contracts,
with general contracting conditions, they should also be subject to the regulations which
apply in this respect in the relevant legal system.
In some countries, however, there is an administrative-type regulation that governs the
business activity of hiring self-drive vehicles. There is usually a requirement to have a
legally registered office for this particular activity, authorised garages or car parks, a
minimum number of vehicles for hire and a maximum vehicle age; furthermore, all vehicles
must be covered by the relevant mandatory civil-liability insurance.
In addition, the growth of new technologies has given rise to a new form of contracting
through electronic media, including contracts taken out over the Internet. The Internet has
become a place of prolific commercial activity.
It has expanded the market of vehicle hire companies by making it easier for companies to
offer their services to an indefinite number of potential customers anywhere in the world.
More specifically, the Internet has helped the development of the European Internal Market,
as it facilitates cross-border contracts between consumers and companies. However,
although the Internet may be the most usual way to hire a vehicle for use in another
country, due, amongst other reasons, to the ease of comparing the rates of different
suppliers, this form of contracting is not free from problems.
The use, both on-site and on the Internet, of adhesion contracts with general conditions
whose equanimity could be questioned, together with the business practices used by vehicle
hire companies, puts consumers in a weak position when it comes to upholding their rights.
In the decade of nineties, as consequence of the Directive of Unfair Commercial Terms,
various organisations have studied the vehicle hire contracts used by the companies in this
sector. They drew up reports that condemned the large number of abusive clauses in the
contracts of vehicle hire companies operating both nationally and internationally.
A new perspective of vehicle hire contracts is provided through this study signed by the
European Consumer Centres Network (ECC Net) that demonstrates there has been no much
positive evolution in this sector’s contract terms, its business practices and its perspective
for consumer protection especially for cross-border transactions.
Raquel Carrasco
Vincent Navez
European Consumer Centre of Spain
Office of Barcelona
November 2005
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The coordinators of this study would like to thank the following organisations for the
valuable information and disinterested cooperation provided whenever required:
Catalan Association for Car Rental Companies (AEVAC), Spain
Organización de Consumidores y Usuarios (OCU), Spain
Conseil National des Professions de l’Automobile (CNPA), France
Union Fédérale des Consommateurs (UFC)-Que Choisir, France
Office of Fair Trading (OFT), United Kingdom
British Vehicle Rental and Leasing Association (BVRLA), United Kingdom
European Commission (DG Health and Consumer Protection and DG Internal Market)
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INTRODUCTION
The mission of the European Consumer Centres Network (ECC-Net) is to help and advise
European citizens to defend their rights as consumers in dealings with companies based in a
different country from their regular country of residence, in order to increase their
confidence in the single market. The Network consists of centres in 24 European countries
and is co-financed by the Health and Consumer Protection Directorate-General of the
European Commission and each of the participating Member States.
Analysis of cross-border complaints reveals that one of the business sectors that gives rise
to most problems for consumers is the sector offering short-term vehicle hire for private
use, generally connected with tourism, when these services are contracted by someone who
lives in a different Member State to the one where the company's head office is based.
This study, which is being carried out at the initiative of the Barcelona ECC, aims to
provide a new perspective on vehicle hire contracts by focusing on complaints submitted by
consumers in order to assess the business practices in this sector and relate them to
regulation of the specific provisions in the contract.
Consisting of three parts, this study highlights the numerous problems, and in some cases
lack of protection, suffered by consumers who have hired vehicles in another EU country.
The first part of the study shows how the cross-border nature of complaints received by the
ECCs poses additional problems. The fact that the company's head office is based in a
different country to the consumer's country of residence puts the latter in a difficult
situation when it comes to defending his or her rights. Simply making a complaint to a
company in another country is often too complicated, and the language barrier does not
make it easy to make a quick telephone call to find out, for example, how a claim is
progressing.
The second part analyses the existing mechanism for consumer protection and shows how
horizontal European Directives contribute to improve consumers’ confidence on crossborder contracts.
In the third part different levels of possible regulation regarding car rental contracts the
ECCs dealt with are suggested.
Moreover, given that equipping consumers with the right information is considered the best
way to halt the growth of these complaints, a list of practical advice for consumers has been
drawn up, which could help create a more level playing field for consumers and vehicle hire
companies with regard to adhesion contracts.
The decision to prepare this study, which involved all the ECCs, was put to vote at the
ECCs meeting held under the auspices of the European Commission's Directorate General
for Health and Consumer Protection in Brussels in September 2004. At this meeting, it was
unanimously agreed to put the recommendations of the study into practice, a clear
demonstration of how seriously centres handling cross-border complaints take problems
associated with the vehicle hire sector.
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Part I. COMPLAINTS ABOUT CROSS-BORDER VEHICLE-HIRE
CONTRACTS
After some necessary preliminary comments, the objective of part one is to detail those
more representative complaints the consumer reported. They are classified following the
chronological order of the contract, depending on the contractual phase they produced:
before hiring the vehicle, collecting the vehicle, during the hire period and returning the
vehicle.
PRELIMINARY COMMENTS
1. Special factors regarding Internet booking
Before the analysis of the specific complaints related to car rental contracts a special
reference to those made through the Internet and its regulation is suitable.
Directive 97/7/EC concerning consumer protection in terms of distance contracts stipulates
that Articles 4, 5 and 6 and Section 1 of Article 7 will not apply to contracts for the
provision of transport on a specific date for a specific period. The European Court of Justice
recently interpreted that car rental contract is one of these exempted contracts1. This means
that when these contracts are formalised via any kind of distance communication, such as
the Internet, they do not have to observe the regulation concerning the prior information
consumers should be given about the service contracted, the written confirmation of the
information, the right to rescind the contract within a period of seven days and the duration
of the contract.
What is applicable, however, amongst others, is Article 8 relating to payments by credit
card, whereby consumers can ask for a payment to be cancelled in the event of the
fraudulent use of their card, and the different Member States will ensure that measures are
in place to guarantee this consumer right.
a) The value of an electronic booking
In the case of Internet bookings of hire vehicles to be used in a different country from
consumers' habitual residence, the service that companies in this sector offer via their
websites is particularly interesting, as consumers can have access to all the information
(offer of service, general conditions, price, etc.) in their own language, or at least in
English. This is different from on-site contracting, when the vehicle hire company often
presents consumers with a contract which booking format and general conditions are
usually written in the language of the country in which the vehicle is being hired, and
consumers' decision on whether or not they want to go ahead with the contract is
immediate.
1
See analysis infra, p. 43.
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Even so, for the vast majority of companies in the sector, this kind of booking does not
replace, as we will see, the subsequent signature of the written contract in the office where
the vehicle is collected. This duplication of documents confuses many consumers because
sometimes the company does not respect all the booking conditions.
The ECC network has received a large number of complaints from consumers who booked
a vehicle on the Internet to be used in a different country from their habitual country of
residence. When making the booking, consumers are informed of the hire price and this is
the amount they logically expect to pay when they collect the vehicle, unless they then
decide to take out an extra service (extra insurance, second driver, etc.). However, in many
cases, consumers complained that the amount finally charged to their card was higher, and
sometimes much higher, than what had been given on the online booking.
It is worth wondering what the point of an online booking is when, in any case, consumers
have to sign a contract at the office of the vehicle hire company when collecting the vehicle.
When consumers ask the company to abide by the terms established in the pre-booking (e.g.
the price), the company refuses consumers any rights because it alleges that the pre-booking
is not a contract.
A Finnish consumer made a booking on the Internet and received his confirmation
with the words "This is a booking”. Furthermore, the price was confirmed to him by
email. Once he got to Malaga airport in Spain, he was told that the company's vehicles
were overbooked and the company could not offer him a vehicle or any solution to his
problem. The consumer had to hire another vehicle from another company on the spot
and had to pay a higher price.
When collecting her vehicle, a British consumer was asked to make an additional
payment of €30 plus VAT in terms of personal accident insurance. Initially, the
consumer refused, but the company told her she had no alternative. After she
complained, the company agreed to refund her the amount. This is an example of
malpractice or deceptive commercial practice: imposing conditions when the vehicle is
collected that were not stipulated on the website.
However, when consumers do not take up the pre-booking, the general conditions establish
that they must compensate the company.
On 13 July 2004, a consumer resident in Austria booked a car on the Internet from a
multinational company to use in France from 7 to 20 August 2005. The price was
€1,775. On 28 July 2004, the consumer asked for the contract to be cancelled and the
amount he had already been charged to be refunded after he discovered that before
collecting the vehicle he would have to pay an additional three days' hire (even if they
were not used), apparently in accordance with the conditions of the contract, since the
company's website stated a weekly hire price. The French ECC wrote to the company
and advised it that since the general conditions were not very clear and were subject to
different interpretations, the interpretation that was most favourable to the consumer
should prevail, and he therefore had the right to ask for the refund.
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In order to avoid inconsistencies between the online booking and the subsequent contract, it
would be worth looking at the possibility of ensuring that online bookings are respected
literally. If consumers are asked to pay for an additional service, this should be clearly
specified on a different document, written at least in English. In any event, the subsequent
contract should always be written in the same language as the online booking, as consumers
may not be aware that they are contracting some kind of extra service (additional insurance,
etc.).
An Austrian consumer booked a hire car on the Internet for €398, to be collected at
CDG Airport in Paris. Once at the office, he showed his booking confirmation and was
then asked by a company employee to sign a contract. Believing that the contract
would stipulate the same as the online booking, he signed it immediately. Once he
returned home, however, the consumer realised that instead of €398 his credit card
had been charged with €621. When he contacted the hire company, it alleged that the
consumer had taken out additional insurance. The consumer stated that he was totally
unaware of this.
The same thing happened with an online booking made by a Finnish consumer who
would be using the vehicle in Italy. Once in the Rome office, he was asked whether he
would like to take out any additional insurance. He replied that he only wanted the
mandatory insurance, and was assured that the amount he would be charged would
match the amount on the booking. He was later charged €250.62 instead of the agreed
€169.08. The consumer did not speak Italian.
When contracting on the Internet, it is also important to pay close attention to each and
every one of the terms in the hire conditions, as knowledge of these should ensure the
vehicle is collected successfully.
An Irish consumer booked a car on the Internet on his family's behalf. The amount was
duly charged to his account, but the company would not supply his family with the car
when they came to collect it, because no-one could produce the credit card. One of the
terms in the contract read “PAYMENT AND DEPOSITS: The credit-card holder must be
present when the vehicle is collected”. Another term was “CANCELLATION CHARGES”,
according to which no charges would be made for cancellations or changes made at
least one working day before the date of vehicle collection. For cancellations made
after this time, or if the consumer did not turn up, no refund whatsoever would be mad.
The company did not accept the consumer's complaint.
b) Deceptive advertising
Some consumers have denounced deceptive advertising on certain websites, which can lead
consumers to hire a car under conditions that do not genuinely represent what the company
is offering.
On 30 May 2005, a British consumer accepted the general conditions and booked a
car on the Internet from a multinational vehicle hire company which was offering
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special rates for hiring a particular vehicle. In the second paragraph, the website
mentioned that there was a discount of 10% for the holders of a particular type of
VISA card, which has been corroborated by the Greek ECC, which also visited the
website. On 1 June 2005, he received a telephone call from the company saying that
the special-rate offer could not be combined with the discount for being a VISA holder.
Despite the fact that the company insisted that it was a translation error on the
website, the consumer refused to contract under any other terms than those specified
on the website. Finally, the company charged him the full amount without either of the
discounts. After being contacted by the Greek ECC, it agreed to return the difference
to the consumer.
The fact is that translation errors should not prevent offers to consumers from being upheld,
since the consumers have booked out of an interest in the offer.
2. Unjust charges, the most common complaint from consumers
Most of the complaints received at ECC offices concern amounts that consumers feel
vehicle hire companies have unjustly charged to their credit cards.
The vast majority of vehicle hire companies demands a credit card from consumers and
asks the issuing entity to block an amount which exceeds the service contracted. In this
way, the company has a guarantee to cover expenses in case anything should happen during
the hire period, or if any expenses arise out of the contract that are the consumer's
responsibility (e.g. traffic fines, returning the car with the fuel tank empty when the contract
stipulates the opposite, etc). In practice, these charges made to the consumer's credit card a
posteriori do not tend to have any kind of explanation of the reason behind the charge.
Whichever way you look at it, this kind of behaviour by companies is open to criticism.
This requirement could be shown on the reverse side of the contract or given as an
additional term in the list of general terms of the contract. By way of example, it could be
written as follows:
"If payment of the car hire is made by credit card, the signature of the card holder
authorises the car hire company to charge the total amount to the card account. This
authorisation also includes any subsequent claims due to adjustments to the hire price,
possible damage caused to the vehicle, and traffic fines".
"My signature below authorises the hire company to charge the total amount due for this
hire to my account with the card issuer given above, which is considered effective in the
entity's transaction note".
"If the selected form of payment is by credit card, I hereby authorise the charges deriving
from this contract with my signature."
All the companies that hire vehicles propose adhesion contracts to their consumers, which
means that neither the terms of the kind mentioned above nor any other terms have been
individually negotiated between the company and the consumer, who is obliged to accept
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them wholesale, which could give rise to a significant imbalance between the rights and
obligations deriving from the contract.
The consumer is protected against the abuse of power by service providers who use
adhesion contracts and exclude essential rights from contracts. For this reason, our
understanding is that determining whether the terms mentioned above are unfair will
depend on the defence measures that the consumer has against these charges. Only if these
measures exist will the fair balance of interests that should prevail in all contractual
relations between businesses and consumers be respected.
Moreover, claims have been received by the ECCs submitted by consumers who state that
the vehicle hire company made improper charges on their credit card. In some cases, the
companies were unable to justify the amounts charged in any way and were forced to
refund them.
When the British consumer picked up the vehicle he paid a deposit. On returning the
car, the consumer was unable to get the deposit back without the company making
some allegation of its own. The recommendation is to file a complaint with the police.
A consumer from Estonia made a reservation on the Internet to use the hire vehicle in
Munich (Germany). The price which appeared on the reservation amounted to
€192.86, but the amount charged on his credit card was €278.42. Once the ECC in
Kiel had contacted the company and after confirming that the charge was not due to
any agreed extra service, the company proceeded to refund the consumer with €100.
An Irish consumer had made a reservation on the Internet for a vehicle for use in Italy.
The Italian company mistakenly duplicated the charge to the consumer's account. The
consumer made a claim and the company did not respond until three weeks later.
Enclosed with its reply, with no further explanation, was a voucher for the consumer to
use. The Irish ECC considered that the consumer was not obliged to accept the
voucher. The case was finally resolved as a result of the action taken by the credit card
company.
Each of the following sections in Part I of this report relates to incidents that took place
during the use of the hire vehicle which, in the majority of cases, resulted in a charge that
the consumer regarded as unjust. We shall look at each case to see whether the consumer
had the means to oppose these charges or not.
I. BEFORE HIRING THE VEHICLE
1. Discrimination based on age
It is a regular practice for vehicle hire companies to require consumers to be of a particular
age and to have had a driver's licence for a specific length of time. Moreover, some
companies also add additional charges in the case of younger drivers. Although some
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consumers consider this to be discriminatory, these additional charges are based on the fact
that vehicle hire companies stipulate different prices for drivers who have not had a licence
for long enough, given that, in their view, their lack of driving experience increases the risk
of an accident.
A Spanish consumer had booked a vehicle on the Internet to be used in Ireland, but
was not able to collect it because, as he was informed by the multinational service
provider: "Spanish, Portuguese and Italian drivers between the ages of 23 and 30 will
be subject to an additional charge of €150 per day".
In this case there is also discrimination in terms of nationality, which does not appear to be
based on any kind of objective judgement; this is therefore an unfair term and its inclusion
in a contract is utterly reprehensible.
2. The general adhesion terms of the contract
Some contracts contain terms whereby the consumer accepts each and every one of the
conditions of the contract. For example:
"I have read and agree with the attached conditions", or
"Company X rents to the client identified in the contract the referred vehicle in conformity
with the terms and conditions herewith established and also stated in the corresponding
valid rates by which the Lessee upon signing on the designated space below, recognises,
accepts and formally agrees to comply with".
The terms referred to are contrary to the rights and interests of consumers, who are
protected by general laws of consumer protection existing in the European countries
(transposed as consequence of the Directive 93/13/CE of unfair commercial terms) because
these terms oblige a general and express agreement with all the terms of the contract which
on occasions is prejudicial to the consumer since, as we shall see, there are some terms that
in our judgement are clearly unfair.
3. The language of the contract
Some consumers have resorted to the services of European Consumer Centres Network to
complain against charges which, following examination by consumer experts, have turned
out to be correctly applied. The only condition that must be met is that these amounts and
the factors that give rise to them must appear on the contract signed by the consumer and,
where applicable, in the general conditions on the company's website. However, when the
contract is made in a different country from where the consumer lives, which is very much
the norm when hiring vehicles for tourist purposes, this may be written in a language with
which the consumer is not familiar.
Signing a contract written in a different language from their own does not exempt
consumers from their responsibility to comply with it. In these cases, it is advisable to ask
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for a contract form at least in English or French; no major vehicle hire company should
have any difficulty making these available to consumers, and this would improve their
service significantly.
A Finnish consumer booked a car on the Internet and upon arrival at the office in
Milan to collect the car was asked to sign a contract in Italian, a language the
consumer did not understand. The contract included additional insurance cover which
increased the rental price by €382.
4. The price
In contracts for hiring vehicles, the company is obliged to give the consumer the use of a
vehicle at a given price. The price includes the hire of a given vehicle, depending on the
number of days or kilometres travelled, the compulsory insurance and additional civil
liability insurance and the applicable tax.
Companies usually charge additional sums in certain cases, such as if consumers return the
vehicle outside the hire period stipulated in the contract, outside office opening hours, or
with an empty fuel tank, or if they return it to a different office from the one shown in the
contract, or if they want to include an additional driver for the vehicle.
When the vehicle is hired in person at the hire company's office, there should be no serious
problems in determining the price. However, it is always advisable to read the contract
carefully and ask about the application of any rates that are not included or any other aspect
of the contract.
A Dutch consumer had hired a vehicle in Holland to be collected and used in Ireland.
Once there, he reserved some extra services and paid for them by credit card. At the
end of the contract, once he had returned home, he noticed that he had been charged
for that amount plus two charges of €1,000 on his credit card without receiving any
explanation.
This case is typical of many other identical ones in which consumers feel absolutely
defenceless when, once they have returned to their country of origin, they discover that the
company from which they hired the vehicle has made charges to their credit card with no
justification whatsoever. These charges may sometimes even be made a long time after the
contract has ended. The establishment of a time limit for making charges on a card would
increase consumers' legal protection.
There have also been cases in which the final amount charged by the company as the hire
price is not the same as that expected by the consumer.
An Italian consumer charged a double deposit - once when making an Internet
reservation through a French company website, and again when collecting the vehicle.
When the invoice was presented, it did not include the deposit paid when the
reservation was made on the Internet and the employee changed the amounts himself.
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Once home, the consumer noticed that both deposits had been charged to his account.
After the complaint, the company agreed to return the sum.
Sometimes improper charges made to clients simply reflect poor management in the
company's invoicing department, as can be seen in the case mentioned above.
5. Variable rates
The ECC network has received complaints from consumers about the hire company's
intention to charge an amount greater than the one really agreed to under the contract.
A Spanish consumer hired a vehicle on the Internet to be used in Amsterdam for 4
days, and returned at 6 pm on the fourth day. After phoning the hire company, he
decided to delay the return for a few hours, in order to coincide with his flight
departure. He therefore returned the vehicle at 5 am on the fifth day. The company told
him that at that time he could leave the keys in the company's letterbox and that he
would not be charged extra for these hours. At home, the client received an invoice in
which he was charged for a week's hire. After requesting the explanation from the
company, it said that five-day hire periods are charged at the weekly rate.
The company's stance could only be justified if it was to the consumer's benefit in that the
weekly rate was lower than the price for a five-day rental. That is how some companies
have argued in response to a letter from an ECC arising from a consumer complaint. This
price increase would otherwise be totally unjustified and unfair because it would not be
payment for a service that was actually provided.
6. Payment of a deposit as a guarantee
Although the majority of companies give consumers the choice of payment for the contract
price by credit card or in cash, payment by credit card enables the company to freeze an
amount in order to ensure payment of subsequent expenses that may arise as a consequence
of the hire (traffic fines, damage to the vehicle, etc.).
In other cases, the hire company will require payment of a cash deposit, which will be
returned to the consumer provided the vehicle is returned without any problems. If the
vehicle is returned damaged, the repair sum will be deducted from the deposit and the
difference returned to the consumer.
Among the complaints received by the various ECCs are those relating to payment of the
deposit.
An Irish consumer rented a vehicle for use in Italy, and damaged the top of the boot by
crashing into a tree. As she had not taken out non-waivable excess insurance, she had
to leave a deposit of €600, but was assured that she would be repaid the difference
after the repairs were completed. The repair cost €290 and she was informed in the
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receipt that she was not going to be repaid anything. After a month of fruitless
attempts to resolve the issue herself, the consumer decided to go to the ECC in Ireland.
The ECC managed to convince the company that it was not acting correctly and finally
reimbursed the consumer for the €310 difference.
7. Insurance conditions
Payment of the vehicle rental price unavoidably includes mandatory third-party insurance,
which is usually accompanied by additional civil-liability insurance for damage to third
parties arising from the use and driving of the vehicle. However, this would not cover any
damage to luggage or to the vehicle itself.
Nevertheless, the company can give consumers the option of taking out some of the
insurance policies available from an extensive range covering various types of event and
with different levels of coverage.
These insurance policies are commonly known by their abbreviations, and they are
identified in all vehicle hire contracts using this nomenclature.
PAI Personal Accident Insurance
PEP Personal Effects Protection or PEC Personal Effects Coverage
ALI Additional Liability Insurance
LIS Liability Insurance Supplement
LDW Loss Damage Waiver
PERSPRO/CCP Carefree Personal Protection
THW Theft Waiver
UMP Uninsured Motorist Protection
Although it is not a type of insurance, there is also CDW (Collision Damage Waiver),
which is usually offered by the hire company. This waiver reduces consumers' financial
liability for damage caused to the vehicle in the event of an accident, and they will only be
liable up to the amount of the waiver agreed.
It is also worth stressing that theft of the vehicle is not covered by mandatory insurance or
by civil-liability insurance, so if it is considered appropriate to cover this risk, the contract
conditions, which in some cases contain optional insurance to cover this risk, should be
consulted.
In general, hire contracts include a description of the coverage of each of these insurance
policies although the sum insured may vary between companies. If the hire company
decides to include another insurance policy or a financial-liability waiver with a deductible,
as well as the compulsory insurance policy, this must be shown in the contract and the
consumer must be aware of the level of coverage offered. Even when some of these
insurance policies are taken out, coverage may be dependent on compliance with certain
obligations, such as making a statement to the police in the event of an accident or theft or
notifying the hire company of what has taken place. Damage may even be completely
excluded from the coverage if it is a result of vandalism.
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A Dutch consumer rented a vehicle for a nine-day stay in Krakow (Poland). Since the
reservation was made using text messages, there was no written record of the
agreement. Some friends of the consumer formalised the contract and the consumer
merely paid for the service. Both parties agreed that the vehicle had all-risk insurance,
without a deductible. The company asked for payment of a €200 deposit. When the
vehicle was returned, the company soon discovered two scratches on the vehicle's
panel, which the consumer was sure had not been caused by him. The company
informed him that his deposit would not be returned as he had not informed the police.
The contract also only included details of the consumer, the vehicle and the hire date
and price. There was no other contractual term.
During a trip to Corfu (Greece) in October 2004, a French consumer hired a vehicle
from a company for use between 10 and 13 October for a price of €120. On the third
day, the consumer had an accident with the vehicle, and the company demanded
payment of €1,000 as estimated repair costs. The company explained that the
insurance taken out (CDW - Collision Damage Waiver) did not cover this type of
damage. The consumer refused to make this payment because the company refused to
provide him with a receipt for the amount of the hire price or an invoice or a quote
with the repair cost. After returning to France, the consumer discovered that instead of
€1,000, his credit card had been charged with €2,120. The consumer contacted the
ECC in France for it to intervene in the reimbursement of the €2,000 which had been
charged to his account without prior justification of the repair amount.
The ECC in France felt that in this case there was a problem of lack of proof. However, it
ascertained that the company's failure to provide a receipt for the price, or charging over
€1,000 more than it initially said the repair of the damage would cost, were fraudulent
practices. Furthermore, the contract offered by the Greek vehicle hire company was not
sufficiently clear and it was very difficult for the consumer to be aware of the exclusions of
the policy signed. Taking out a CDW-type insurance policy is mentioned without any
description of the level of coverage it provides, meaning that it is impossible for the
consumer to assess which risks are covered by the policy. Furthermore, the contract was
written in English and consumers are usually given little time to read it. The Greek
company was not willing to cooperate with the ECC and the case has been transferred to an
ADR body.
8. Second driver
It is important to declare whether there will be more than one driver when the vehicle is
being hired, and if so, pay an additional rate. The insurance coverage would therefore be
maintained even if an accident happens when the vehicle is being driven by a person other
than the consumer. Generally, for additional drivers, a rate is paid which increases
depending on the number of days hired.
It is also important to clarify the rate that must be paid when an additional driver is included
for problems like those below:
An Irish consumer hired a vehicle from a company in Italy. He was informed that if he
paid €25 this would cover additional drivers. However, he was charged €25 for each
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additional driver. The Irish ECC feels that the term "Additional drivers are possible
with a fee of €25.00 (including tax) per rental regardless of the number of additional
drivers" was incorrectly applied and decided to contact the Bolzano ECC for it to
mediate with the company. The company finally agreed to reimburse the incorrectly
charged amounts.
9. Driving in other countries
Various complaints have been made that the information which the company provides on
the restrictions on driving in a given area were not sufficiently clear.
If the aim is to travel outside the country where the vehicle is collected, this must be clearly
stated when it is hired, both when reserving over the Internet and when collecting the
vehicle and signing the contract. It is often necessary in this case to make an additional
insurance payment, as the protection by the mandatory insurance may be limited to the
country shown in the contract. Some contracts do not even consider this possibility and
simply prohibit driving outside the territory of the country where it is hired.
A British consumer hired a vehicle in Spain on the Internet. In the reservation, he
made clear his intention to travel to France with the hire vehicle, although it appears
he did not do so when picking up the vehicle. The car broke down France and he
contacted the rental company's assistance service. This service told him that because
he was in another country, the repairs were not covered by the insurance policy. The
lessee had to pay €799 for the repair himself, and was also without the vehicle for the
last three days of his holiday.
A Danish consumer hired a vehicle in Germany, and went on holiday with it to Spain.
Once there, he decided to drive to Morocco. When he was waiting to board the ferry,
the police asked him for his documentation and his vehicle was immobilised. As the
consumer had to return home and could not use the vehicle, he had to pay several
extra charges. He contacted the ECC to claim these extra charges back from the rental
company, but the ECC warned him that the hire contract prohibited him from driving
in certain countries, including Morocco. As a result, the consumer was not entitled to
make his complaint.
10. Vehicle accessories
The hire contract usually lists the accessories provided with the vehicle and which must
therefore be in it when it is returned. Some of the accessories may vary according to the
legislation in force in the country where the vehicle is rented, and may include emergency
triangles and a reflective jacket, for example. Among the most common accessories are the
radio, tools, spare wheel, etc.
It is advisable to check that these items are there when collecting the vehicle.
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An Italian company wanted that the consumer from Luxemburg who had hired one of
its vehicles pay for the car radio, which had disappeared. The consumer said that there
was no radio when he collected the vehicle. However, the documentation seemed to
suggest that there was. Therefore, the company demanded payment for it.
11. Intervention of intermediaries
Consumers can often arrange the hire of a vehicle through a reservation service on the
Internet, through the hotel where they are staying, or through the travel agency with which
they booked their trip. The information users receive in a hire agreement made under these
circumstances should be as complete as if it were made directly with the vehicle hire
company.
In any case, it is the party with whom the consumer makes the hire agreement who should
provide all the hire information and from whom the consumer should demand it.
A German consumer hired a vehicle for use in France from 15 to 22 April 2003 from
an intermediary who offered their services on the Internet, at the price of €175.59. The
hire of an economy-class vehicle was agreed, and a Peugeot 306, Ford Focus and
Renault Megane, along with other similar models, were given as examples. Upon
arrival at Nice airport, the consumer saw that the service arranged on the Internet
through reservation centre was being offered by another company. This second
company offered the consumer a Peugeot 206 instead of the larger models mentioned
on the website. In addition, the price that they quoted him was €265.25 instead of
€175.59 and they were not willing to satisfy the consumer's demands, despite the fact
that he could show that he had entered into a contract with different conditions. The
company insisted that a Peugeot 206 was a vehicle within the agreed category,
although it admitted that the reservation centre had other established criteria for
determining vehicle categories. It also added that the price shown on the website did
not include taxes or insurance. The website, however, did not specify anything in this
respect and the consumer had therefore believed that it included everything.
According to the French ECC, the claim is fair. As the reservation centre was an agent
of the company which actually offered the service, the latter is bound by the
information provided by the former as regards the model and hire price and should be
answerable for any problems arising from the information which appeared on the
Internet. The case has still not been resolved.
A consumer residing in Ireland hired a vehicle through a tour operator for use in Italy.
When he picked up the vehicle at a multinational company, he was charged the price
and the following items, which had not been included in the initial quote:
"Licence + fees" (a kind of local tax)
"Other surcharges" (extra insurance administration fee)
"Premium Station Surcharge" (airport tax)
The consumer requested a refund. The case was passed to the Bolzano ECC, which
proceeded to contact the company, who agreed to refund the consumer.
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An Irish consumer hired a vehicle on the Internet to be used in the United Kingdom.
The reservation was made through company A, who confirmed it and sent a prepaid
voucher from company B for the hire of a vehicle from company C. Company B went
into liquidation and company A advised the consumer to contact company C so that it
could inform him if it would provide the vehicle when payment had been made to
company B. The consumer claimed he was unaware that company A would subcontract
company B, and analysis of the term on the website revealed no such subcontracting.
As company A was unwilling to act on behalf of the consumer against company C, the
credit card company was contacted, which then cancelled the payment to company B.
II. COLLECTING THE VEHICLE
1. The agreed vehicle is not available
The vehicle placed at the consumer's disposal must be the one that the parties freely agreed
upon at the time of the reservation and under the agreed conditions. For example, it must
have certain and accessories such as a radio, baby seat, air-conditioning, etc.
If the hire company could not provide the consumer with the agreed type of vehicle, the
latter could ask for the contract to be cancelled.
A child seat was requested when the reservation was made on the Internet by the
German consumer. The reservation was confirmed. When the vehicle was collected,
there was no seat in it, and the consumer had to wait until the next day to receive one.
The company based in Italy refers to the general conditions which states that seats are
“subject to availability”.
The “subject to availability” term is unfair, because it places consumers in a situation of
complete uncertainty as to whether they will have the seat or not, and whether they will be
able to use the hire vehicle or not, as it is impossible to drive with children without the
appropriate seat. This should be guaranteed to consumers when they make the reservation.
A contract was made in person by two Belgian consumers on the premises of a
multinational vehicle hire company in Ireland. The consumers requested a small
vehicle and the sales assistant offered them a Nissan Micra, which they accepted.
However, when they arrived at the collection point, a Hyundai Accent, a much larger
and more expensive vehicle than the one requested, was waiting for them. The
consumers were forced to accept it as they were given no other alternative. Later, the
consumers saw that the model shown in the documentation was a Hyundai Accent at
the price set for this model.
The ECC in Ireland contacted the establishment arguing that the employee must have made
some sort of error and asked for the difference in the rental price between the Hyundai and
the Micra, which was what had really been agreed upon, to be returned. Despite having no
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legal basis for the complaint as the documentation did not support the complaint, the
company agreed to reimburse the consumer.
A Swedish consumer hired a vehicle in Scotland. Among the features of the vehicle
requested was that it had to have seven seats. However, the one he was offered had
five. The consumer requested a change and the company made an extra charge. The
ECC advised the consumer to make a complaint to the company for the additional
amount.
2. Condition of vehicle at time of delivery
The hire company is obliged to place the vehicle at the consumer's disposal in a good
condition for use during the contract period and to have made the necessary repairs to that
end.
The company must also provide the accessories, spare parts and tools that general
regulations regarding traffic vehicles stipulate that the vehicle must have.
If the contract does not specifically mention the state of the vehicle and if, when the vehicle
is collected, the consumer does not state otherwise, it will be assumed to have been received
in good condition, unless it is possible to prove otherwise.
When the vehicle was collected, the Dutch consumer noticed that it was dirty both
inside and outside. It also had dents and scratches on the panel and he decided to
complain to the company immediately. The company offered him a change of vehicle
but the baby seats he had reserved, which were also not in a good condition, did not
fit.
A Finnish consumer rented a vehicle in Ireland with a small hire company. After
collecting it, he realised that it had several problems: A safety belt was missing, it was
scratched and it was dirty. He returned to the office where he had hired it but there
was nobody there to deal with his complaint. He called the number provided for
problems, but there was no response. The consumer did not agree with the provision of
the service, but the documentation in his possession did not show the state of the
vehicle.
The ECC contacted the company but it ignored this correspondence. The case was finally
sent to an ADR (alternative dispute resolution) body in Ireland and the company partially
accepted the consumer's claim.
The consumer is not obliged to receive a vehicle that is not in perfect condition for use and
can request the cancellation of the contract and the reimbursement of any sums paid in
advance.
It is highly advisable for consumers to check of the state of the vehicle very carefully when
taking possession of it, accompanied by a hire company employee. If there is any
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significant damage, a change of vehicle should be requested immediately. Failing that, the
damage should be shown in the report showing the condition of the vehicle.
An Austrian consumer rented an Opel Astra on the Internet to be used in Portugal. He
collected it from the hire company's office in a street in the centre of Lisbon. Due to
the existence of serious damage to the vehicle he decided to go to the company's office
at the airport and the employee agreed to the change. The employee inspected the Opel
Astra and discovered damage to the windscreen. The consumer assured him that this
was already there when he had collected the vehicle. The consumer subsequently saw
that his credit card had been charged with the sum of €400.
The majority of companies include a term in their contracts by which the consumer makes a
generic declaration of the good condition of the vehicle. For example:
"The lessee acknowledges and declares that the vehicle is in good general condition,
without any apparent defects..."
"Conditions of the Vehicle. The lessee expressly acknowledges the receipt of the vehicle in
perfect running condition and that its five tyres are in good condition and without
puncture..."
This term is unfair in that it exempts the trader from any responsibility and is a unilateral
interpretation of what it provides. The consumer normally does not know enough about
vehicles to say whether or not they are in perfect condition. Furthermore, normal practice
shows that the contract is signed before the hire vehicle has been seen, and it is delivered
after signing.
III. DURING THE HIRE PERIOD
1. Poor vehicle operation and road assistance
All hire vehicles must be placed at the consumer's disposal in good working order and to
ensure that this is the case, they must undergo internal checks after the completion of each
hire contract. It is normal for major multinational companies to offer practically new
vehicles for rental, which means that these vehicles do not cause too many problems.
Although the vehicle might work perfectly at first, some type of unexpected problem may
appear while it is being used which then means it does not work properly or stops working.
Modern vehicles have a dashboard with warning lights that light up when a problem is
detected.
In order to find out what steps to take, the contract should be consulted and the company,
who should provide the name of the company with which it has arranged its road-assistance
service, should be contacted immediately. The road-assistance company's work on the
vehicle should be expressly authorised by the hire company.
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The most transparent companies in the hire market usually provide the consumer with a
contact telephone number for a 24-hour assistance service, which sends a tow truck and
takes the vehicle to the hire company's nearest office, where a technician will make an
initial assessment. And if the problem is not too serious, he will try to solve it. If this is not
possible, he will place at replacement car at the consumer's disposal. This service is usually
included in the contract price, providing that the breakdown is not the consumer's fault.
Some contracts have a time limit within which any problem must be repaired, and the
consumer will only be provided with a replacement vehicle after this time limit has been
exceeded without the repair being completed.
In addition to the contract, other vehicle hire companies offer the opportunity of taking out
road-assistance coverage for the vehicle in the event of a breakdown or accident which
prevents the journey from being continued. It is necessary to check the contract to
determine whether for example this option includes towing to the repair workshop indicated
by the hire company, emergency repairs, and transportation of the vehicle's occupants when
the vehicle needs a repair of a certain duration.
A German consumer who had damaged the vehicle he had rented in Iceland had to pay
€600 for its transport costs. The Iceland Clearing House feels that the contractual
term relating to transport expenses is too vague and therefore cannot be interpreted
against the consumer's interest. The company agreed to reimburse the consumer.
2. In the event of an accident or damage caused during the
hire period
In the event of being involved in an accident, the consumer should act according to the
stipulations in the vehicle hire contract. In any event, he should contact the company and
notify it of what has happened as soon as possible and follow its instructions.
In the event of an accident, the driver of the vehicle will be liable; unless it is due to poor
functioning of the vehicle or a fault with it. This must be proven by the driver, in which
case the hire company is deemed liable.
An added problem arises when the party responsible for the accident is not the driver of the
vehicle, but a third party which admits liability. In this situation hire companies usually
withhold the deductible amount from the consumer until litigation is completely resolved,
and this is shown as a term in the contract of adhesion. In the best cases, the contracts
stipulate a time period after which this amount is returned to the consumer once the
necessary checks have been made. However, on other occasions consumers have to wait a
long time - even years - before getting their money back.
On 14 August 2002, an Irish consumer rented a vehicle from the offices of a
multinational vehicle hire company. On 16 August the consumer was involved in a
traffic accident for which he was not responsible. He immediately telephoned the
company's assistance service, which assured him that once the mechanic had
confirmed that the vehicle could not be used, he would be provided with a
replacement. The client had to wait 48 hours for the vehicle to be changed and asked
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the company to compensate him for the two days during which he could not use the
vehicle and other losses arising, such as supplementary hotel expenses and two days of
lost holidays, which were all valued at €2,272.59. The multinational's office in Dublin
offered him €770 in compensation. After two years' correspondence between the
company and the consumer, he obtained €1,049.40, which did not satisfy the
consumer, which is why he contacted the ECC.
It was difficult for the ECC in France to get involved in the case, because it was not given a
copy of the contract, but it highlighted the company's poor customer service. Although it
contacted the company, the company replied that it was not willing to increase the amount
that the consumer had already obtained.
A Swedish consumer rented a vehicle from a multinational company from 22 July to 2
August 2005 and signed a CDW policy. On the first day, one of the warning lights on
the dashboard lit up. The consumer telephoned the company and it sent a mechanic.
According to the mechanic, the vehicle needed oil and he was also unable to repair the
vehicle. The consumer asked for a replacement vehicle but the company replied that he
would have to drive the vehicle back to Nice, thereby losing one day of his holiday. On
1 August, the new vehicle was hit by another one while it was parked, which was
acknowledged by the other driver, who signed the document for the insurance
company without any problems. As the car was damaged, it could not be driven back
to Nice. The company forced him to take a taxi to Toulon, where he was provided with
another vehicle to drive to Nice, and once there, he was told that any complaint could
be dealt with in the company's office in his country of residence. On his return from his
holidays, the consumer saw that he had been charged the sum of €418.06 plus taxes to
his account, as well as the sum of €34.5 € for the petrol missing in the first vehicle,
which he had to return, despite having been promised that he would not be charged. As
well as these expenses, the consumer requested €200 as compensation for the loss of a
day of holiday.
As a result of the previous complaint, the ECC in France analysed the contract and
considered that the term referring to the CDW policy creates a significant imbalance
between the rights and obligations of the consumers and those of the supplier:
"If the consumer is free of any responsibility in the accident the deductible amount (...) he
will be reimbursed after the company has been reimbursed by the party responsible for the
accident"
This term illustrates the abuse of the company's dominant position given by the contract to
pass on to the consumer who is not responsible for the damage the financial losses involved
in the repair, until the party responsible pays.
The ECC in France also points out that the company is in breach of the contract because
according to the contract it had undertaken to provide full assistance and replace the
vehicle, and cover the transport costs to the company's nearest office where the client could
take possession of the replacement vehicle.
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As the company has not answered letters from the ECC, the case has been transferred to the
competent French authorities in the field of consumer rights.
A Swedish consumer had an accident while driving the hire vehicle in Italy. The
accident was caused by the driver of the other vehicle, who admitted responsibility.
The police and witnesses confirmed the version of events given by the consumer. The
accident led to numerous expenses for the consumer and the company informed him
that he would be reimbursed for all of them. On his return to his country, he sent the
receipts for the expenses to the office of the company in his home country, which sent
them to the office in Italy, from which despite the long time that has passed, he has
received no information.
A Swedish consumer hired a vehicle in Belgium and drove it to France, where he was
involved in an accident. The consumer had a report from the French police, according
to which the person responsible for the accident was the driver of the other vehicle and
there were also other witnesses who confirmed this. Despite all this evidence and the
fact that one year has passed since then, the consumer has still not been reimbursed
for the amount withheld as a deposit when he returned the vehicle.
Consumers are also obliged to make proper use of the vehicle, so they would be liable for
any damage to the vehicle unless they could prove that this occurred through no fault of
their own. The damage is therefore presumed to have been caused by the consumer.
However, this presumption directly contradicts the presumption that the vehicle received by
the consumer is in good working order unless proven otherwise, which forces the consumer
to return the vehicle at the end of the contract in the state in which it was received, unless it
has suffered unavoidable wear and tear. It is obvious that the invisible faultscondition of the
engine, gearbox, etc.) that the vehicle may have are impossible for the consumer to assess.
From all the above, it can be concluded that the consumer must examine the vehicle
carefully when collecting it and must use it properly. It is up to consumers to prove that the
damage is not attributable to them, and this is established at least by jurisprudence in Spain.
And if they cannot do so, they will be liable for all the damage to the car that has occurred.
An Irish consumer had taken out maximum insurance coverage for his hire vehicle.
During the hire period, the gearbox broke while he was making correct use of it. He
was charged €1,243 for the repair, appraisal of damages and depreciation in the
vehicle's value.
A British consumer had taken out insurance with an excess. Soon after collecting the
vehicle, it suffered a mechanical fault and the gearbox broke. He returned to the
company and they gave him another vehicle immediately, telling him that the damage
to the first vehicle would be charged to the excess insurance. On his return home, the
client noticed that £415.33 had been deducted from his account. After the ECC's
complaint the company returned the amount.
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If the vehicle repair cannot be carried out in situ or quickly, the hire company should place
another vehicle at the consumer's disposal. Otherwise the consumer would be entitled to
cancel the contract.
Consumers who find that they have been charged for a repair that became necessary during
normal operation of the vehicle may ask the hire company for the internal check protocol
which it applies to its vehicles after each hire, and the document that proves that the vehicle
in question passed these checks and was therefore placed at the consumer's disposal in
perfect condition.
3. Use of vehicle in special circumstances
Vehicle hire contracts usually include terms prohibiting driving the vehicle under certain
circumstances or on certain roads, such as forest paths or unpaved surfaces. If consumers
wish to carry out any special activity or excursion, they should check that the contract does
not exclude insurance coverage if the vehicle is used in these circumstances.
A group of Austrians had booked an adventure tour in Iceland with an agency on the
Internet. The hire vehicle had been subcontracted. The vehicle's engine filled with
water when the driver attempted to cross a river and they had to be rescued by the hire
company. The company charged the consumers €4,400 through their credit card. The
consumer requested reimbursement of this amount. The case was received by the
Clearing House in Iceland and sent to an ADR body, which ascertained that the
damage was not covered by the insurance policy because the accident had taken place
while crossing a river without a bridge, and the vehicle was not insured under these
circumstances.
However, with regard to this case the ECC in Austria took into account that the consumers
requested information from the representative of the adventure travel agency about the
danger of crossing rivers and were told that there was no problem in doing so without a
local guide as they were no more than one and a half metres deep and the hire car was
suitable for the crossing. The driver realised that the vehicle was not equipped with a
snorkel like the other hire vehicles, which is why the engine was damaged.
A Danish consumer hired a Suzuki Vitara at Keflavik Airport in Iceland on 4
September 2003, and returned it three days later without mentioning any damage. The
vehicle hire company charged the sum of ISK 209,031 (€2,892.71) to the consumer's
account. However, the client felt that the damage should have been covered by the
insurance policy, an argument rejected by the hire company. The case was sent to an
ADR body which decided that the damage was not covered by the insurance because
the client had driven the vehicle on non-asphalt surfaces. In addition, the consumer
had not reported the damage to the police or to the company itself, as established in
the contract.
The ADR body decided that the consumer was entitled to be refunded with €200 which
the company had improperly charged him. This amount corresponded to three days of
lost hire income due to the vehicle being repaired in the garage. The company could
not prove that it had suffered this financial damage.
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4. Customer service during the vehicle hire
The failure of customer service departments to operate adequately during the hire has been
the subject of some of the claims received by the ECCs. Consumers who have problems
when using the vehicle may find their situation is worsened when the customer service
department does not work adequately and does not provide the assistance requested as
quickly as possible. This results directly in consumers being unable to make use of the hire
service for a certain period of time and entitles the consumer to claim compensation from
the company in such a situation. However, some contracts include terms through which the
right of the consumer to claim in these cases is denied. For example:
"Under no circumstances shall the lessee be able to claim damages due to delays in the
delivery of the vehicle, cancellation of the hire, or immobilisation due to repairs during the
hire period".
However, this term could be declared as unfair by a court of law insofar as there would be a
limitation of the legitimate rights of consumers and users.
A German consumer hired a vehicle on the Internet to be used during the month of
August in Lisbon. When picking up the vehicle, he had to accept a vehicle of a lower
category because the one he had reserved was not available. After driving 300 km, the
exhaust pipe, which was in bad condition and not attached properly due to an earlier
incident, came away from the vehicle. The company was informed of the facts, and
after numerous telephone calls it still took them two days to provide him with another
vehicle, which in addition had no petrol. The consumer requested compensation for the
loss of two days without the hire vehicle, the amount of the petrol left in the first
vehicle and the cost of telephone calls. Despite the fact that the ECC in Portugal
contacted the company, it never answered the request for compensation.
IV. RETURNING THE VEHICLE
It is essential for the vehicle to be returned sufficiently in advance to the agreed place and
during working hours. At the time the vehicle is returned, the consumer should ask an
employee to check both the outside and inside of the vehicle, in addition to ensuring that the
fuel tank has been filled up, if that was what was stipulated in the contract. After the check,
the employee should issue a document stating that the company accepts the condition of the
car when it is received. By obtaining this document, the consumer may avoid any
subsequent unexpected charges on their credit card. The consumer is responsible for
checking and understanding the documentation they sign when collecting and returning the
vehicle.
Large multinational companies should not have any particular difficulties providing this
documentation in the language of the consumer, and at least in English or French.
A Spanish consumer hired a vehicle in Belgium through a multinational company for
four days. When he returned it, he signed a document which he thought was part of the
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acceptance by the company of the condition of the vehicle on delivery. A few weeks
later, he saw that the hire company had charged his account with €280 due to the fact
that the windscreen was damaged.
Contracts usually expressly stipulate in the general conditions the obligation of the
consumer to return the vehicle at the time and on the day indicated in the contract.
However, some companies establish courtesy periods in their contracts which allow the
delivery of the vehicle to be delayed by up to an hour.
1. Return on a later date
During the hire period, some consumers find that it is necessary to modify the period which
appears in the contract in order to keep the vehicle for longer than the agreed time. This
modification may have an affect on the internal organisation of the company, which might
have already reserved that vehicle for another consumer. The consumer should notify the
company of their intention to extend the contract as soon as possible and the company will
unilaterally decide whether or not to grant this extension. If notification is not given, the
hire companies, as a penalty, usually charge a higher amount than the daily hire price for
each day's delay.
A Spanish consumer rented a vehicle from a hire company in Germany for use for four
days. The consumer returned it one day late. A few days later he received the charge
and without any prior notice was charged with a penalty equivalent to three days' hire.
The consumer wanted to claim back the extra charge. However, the consumer did not
have sufficient grounds for his claim as this is the amount that the company has
stipulated for penalties due to a delay by the consumer in returning the vehicle.
For reservations made on the Internet, and if the company accepts the modification of the
contract by granting the extension of the rental period, it is important to keep the receipt.
The United Kingdom ECC received a claim relating to a reservation for one week
made on the Internet by a French consumer. The consumer wanted to extend the hire
period by three days and therefore went on to the company website again, to the
“summary of modifications” section. The consumer did not have a confirmation email,
or any proof that she had requested an extension of the term or that the changes had
been accepted. As a result she was charged an additional amount for returning the
vehicle after the agreed period.
Once the contract has begun, any modification of its duration will entail a penalty which the
consumer will have to pay despite having informed the company in advance. To start with,
the vehicle must always be returned on the day indicated in the contract. If consumers call
the hire company to extend the hire period, it is important to do so sufficiently in advance
and to request their express authorisation.
A Swedish consumer who had hired a vehicle in France asked the company to extend
the hire period. In spite of having accepted the extension, the company charged him a
penalty.
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2. Return on earlier date
Returning the vehicle earlier than the time stipulated in the contract does not entitle the
consumer to a reduction in the amount initially calculated, because it is a unilateral
modification of the contract at the request of the consumer. Neither is it then acceptable for
the company to impose an extra charge or penalty if it has the vehicle in its possession
before the end of the established period, as this does not entail any disadvantage for the
company.
A Finnish consumer made a claim because he had been charged an extra €139 for
returning the hire vehicle 1 hour 27 minutes before the time established in the
contract. He also claimed that he was never warned about this point and that the
authority of the company to act like this was not included in the contract.
It is a different case when the vehicle has to be returned a long time in advance for a reason
not attributable to the company or the consumer.
A consumer from Luxembourg hired a vehicle for 25 days, but fell ill the following day
and had to be hospitalised. The vehicle was returned on the fifth day and the company
refunded the consumer €200. The consumer, however, demanded €300.
In this case, despite the consumer not having taken out insurance to cover this risk, the
company agreed to refund the consumer with the amount requested.
3. Return to different office
The vehicle hire contract, unless otherwise indicated, establishes that collection and return
of the vehicle will take place at the same office. If this is not the case, the consumer should
indicate this before collecting the vehicle and, in some cases, payment of an additional
amount may be necessary.
A Spanish company claims the payment of additional costs from the Portuguese
consumer, as the vehicle was returned to a different office to the one where it was
collected.
Not all the offices in a network of hire companies have the same public opening hours.
These may vary from one city to another and depend on the commercial area in which the
establishment is located. For this reason, if consumers intend to return the vehicle to a
different office from the one where it was collected, we highly recommend that they ask for
information on its exact location and public opening hours.
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4. Office closed when vehicle is returned
The opening hours of the office to which the vehicle should be returned should appear
clearly and unequivocally in each of the contracts completed in the office, as well as on hire
companies' websites.
Hire companies usually allow consumers to return the vehicles outside of office hours or
leave them in the car park of the hotel where they are staying in order to be picked up later.
However, what could be seen as a courtesy to consumers often works against them because
it means that the chance for the consumer and company to evaluate the condition of the car
together is missed, as is the opportunity to obtain the corresponding report accepting the
condition of the vehicle, if necessary. Obtaining this report would prevent the company
from making subsequent charges for possible damage seen on the vehicle.
Many incidents can and in fact do happen between the time at which the consumer leaves
the vehicle (in the street or in the car hire company or hotel car park) and the time when it is
collected by an employee of the hire company.
What we see in the ECCs is that many consumers who return the vehicle outside office
hours (at night, on public holidays, etc.) receive charges on their credit cards due to
supposed damage to the vehicle which could have been caused between the time at which
the vehicle was returned and its collection by the hire company, as the car park is usually in
the open air and unsupervised. Consumers are helpless in this situation because the contract
usually provides for this situation and establishes terms such as the following:
"Any damage caused to vehicles which are returned outside office opening hours are also
the responsibility of the consumer".
In these cases, it is up to the consumer to pay for the repair up to the excess. The repair
price will be determined by the amount which appears in the quote requested by the hire
company for this purpose or the actual repair invoice. Otherwise, the aforementioned term
would be unfair.
A Spanish consumer hired a vehicle for use in Brussels for four days without any
incidents occurring. Weeks later he received a charge on his credit card for €280 with
no explanation. After contacting the company, he was told that the car had been
returned with a broken windscreen and outside office hours. This was categorically
denied by the consumer. Furthermore, the inspection report completed when the
vehicle was returned was not clear.
An Austrian consumer reserved a vehicle on the Internet through a well-known
multinational company for use in Belgium. After using the vehicle, he returned it
outside office hours. The consumer received a charge on his credit card due to damage
suffered by the vehicle and for having been returned outside office hours. The contract
expressly provided for this penalty. The company refused to make a refund.
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5. Damage to vehicle attributed to consumer
As has already been stated above, one of the most common types of claims received by the
ECC network are those made by consumers whom the vehicle hire company has charged
for the repair of supposed damage (scratches, bumps, etc.) which value is covered by the
excess. Most of these claims are characterised by being for a large amount. The companies
claim on the base of photographs of the damage or by sending the repair invoice. But none
of them constitute proof of the damage having caused by the consumer. Nothing substitutes
a visual inspection by a company member of staff, who should issue an “acceptance report”
when the vehicle is returned, to be signed by the consumer. Logically, it should be
compared with the mandatory vehicle condition report issued when the vehicle was
collected.
Some consumers’ claims confirm that, at the time of collection and return of the vehicle, the
consumers did not carry out a detailed inspection of the vehicle nor did they request a
vehicle condition report or a report accepting the condition of the vehicle on delivery.
Subsequently, some consumers found that the hire company made claims against them for
existing damage to the vehicle which they did not cause.
Faced with this situation, consumers must prove their lack of responsibility, i.e. that the
damage already existed or that they did not cause it: in the first case this proof may not be
easy to obtain because the contract usually contains a term by which the consumer accepts
that the vehicle is delivered to them in good condition. If in addition to this some companies
do not issue the vehicle condition report before delivering the vehicle to the consumer, the
difficulty increases. In any case, consumers will be released from responsibility if they
provide the acceptance report which is given to them when the vehicle is returned.
A Swedish consumer hired a vehicle in the United Kingdom through the office of a
multinational company. The consumer was invoiced for the amount of the repair of the
windscreen, although he claims that the damage already existed when he picked up the
vehicle.
One hour after picking up the vehicle, a Swedish consumer realised that it was
damaged. The consumer informed the company of this fact. However, the company,
once the rental period had ended, claimed the amount of the repair from the consumer.
We should remember that these consumers are not nationals of the country where the
vehicle is collected and have therefore gone back to their place of residence when they
receive the charge. Consumers often find themselves in a hopeless situation when it comes
to arguing with the company about the origin of the charge. Simply contacting the company
from the consumer's country of residence is difficult if there are limitations due to the
language barrier.
The action of the company is completely in accordance with the law when the consumer is
actually responsible for the damage. However, an unfair situation occurs when, whilst the
consumer may categorically deny having caused any damage to the vehicle, it is easy to see
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from the content of the contract and the action of the company that not all the necessary
measures were taken to ensure that if damage occurred, the claim of the company would be
supported by completely objective and transparent information.
Far from this being the case, it is usually the word of the consumer against that of the
company, which has usually charged the amount of the repair in advance, leaving the
consumer with very few ways of asserting their right to pay only for what they are actually
responsible for.
A Spanish consumer rented a vehicle in Madeira (Portugal) from an international hire
company. At the end of the hire period, the consumer left the vehicle in the company
car park without any employee checking the condition in which the vehicle was
returned. Four months after the vehicle was returned in perfect condition -according
to consumer - the company charged him with the price of the supposed repair, which
amounted to €600. At no point did the company justify this amount.
Company claims based on damage which consumers cannot see for themselves leaves
consumers utterly defenceless.
When the consumer denies having caused damage to the vehicle one can note the different
kind of problems caused as consequence and depending on if the vehicle was inspected or
not by the company.
a) Vehicle not inspected by the company on its return
Unfortunately some vehicle hire companies charge amounts to consumers' credit card
accounts for supposed damage caused to the vehicle which, for various reasons, was not
checked when returned, and this can lead to an unpleasant surprise for them when they get
back home.
In addition, some companies do not provide consumers with a report on existing damage to
the vehicle before the hire period.
For this reason, consumers should always demand checks both before and after the hire
period to be carried out in their presence.
An Irish consumer made a claim against an Italian company which had made charges
on his credit card for damage supposedly caused to the vehicle during the hire period.
The case was sent to the Bolzano ECC, which mediated and managed to get the
company to return the amount debited from the consumer's credit card, on the basis
that this practice was fraudulent because the company did not inspect the vehicle at
the start of the hire period or check the vehicle after it was returned.
An Irish hire company charged €337.28 on the card of a British consumer on the basis
of supposed scratches along the side of the vehicle. The consumer claimed that he did
not cause any damage and that the vehicle was returned at the agreed time. He
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therefore requested a refund. The Irish ECC considered that the company was guilty of
malpractice for making charges for damage without having inspected the vehicle or
completed the damage report. The company replied that the vehicle was returned
outside office hours, before the time agreed in the contract, and that they could not
accept responsibility for damage caused within the hire period. The case was taken to
an ADR body and the company eventually had to refund the consumer with part of the
amount claimed.
Some contracts include the obligation of the consumer to be present at the inspection
carried out when the vehicle is returned. If they decide to leave before the inspection takes
place they must sign the return document in advance, giving their consent for the vehicle to
be inspected in their absence. If any damage is found on the vehicle the company may make
the corresponding charge.
b) Vehicle inspected by the company on its return
A Spanish consumer hired a vehicle in the United Kingdom and was asked to leave a
deposit of £500. The vehicle was dirty and had mud on the underside. The consumer
claims that he returned it intact but the employee who received it cleaned some of the
mud off and found a scratch which the consumer denied having caused. The company
required the consumers to sign a document accepting responsibility for the damage
and did not return the deposit of £500.
A Spanish consumer hired a vehicle from an Austrian company for his stay in the
country. When the vehicle was returned, it was inspected, but although the company
was satisfied, it did not issue a report. Once he had returned to Spain, the consumer
saw that he had been charged €557 on his credit card, with the company claiming that
scratches had been caused to the vehicle surface, which had to be repaired. The
company could not prove the damage. The consumer maintains that he returned the
vehicle in perfect condition.
A Spanish consumer made a telephone reservation for a vehicle to be used in Munich
(Germany). Once there, he signed the documentation in the office and was sent to
collect the vehicle himself from a car park located 400 metres away. Three days later
he returned the vehicle to Munich airport. When the employee carried out a detailed
check, he detected a small scratch 3 or 4 centimetres long on the lower part of the
bumper. The consumer admits that he did not check the vehicle before using it, but
even if he had done so, he would not have seen the scratch, since the car park was in
darkness and the lower part of the bumper is not a very accessible position. The
company proceeded to charge €424.25 to his account. The consumer also completely
disagreed with the valuation of the damage.
A Swedish consumer hired a vehicle to be used in the United Kingdom. The consumer
complained because the deposit he paid had been withheld due to supposed damage,
which he denied having caused. Once the documentation had been checked, it was
clear that the consumer had signed it, apparently unaware of its significance, thereby
admitting responsibility for the damage.
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A French consumer hired a vehicle from 20 May to 6 June from a company at Dublin
Airport. When he returned the vehicle to the agency, the person who checked it
discovered a 1-mm mark on the windscreen. The company immediately charged
€374.55 to the consumer's account, even though he claimed that the mark must have
already been there as he had not had any incidents during the use of the hire vehicle.
The French ECC considers that the problem in this case is the express authorisation
contained in the contract according to which the company can charge a consumer's
account with an indefinite amount if it considers that the consumer has caused damage
to the vehicle during the hire period. However, if the consumer does not agree with the
amount charged or is sure of having returned the vehicle without damage, he cannot
make any objection to the bank. The company has legal grounds for making charges to
the consumer, but the latter, on the other hand, cannot make any claim against the
decision of the foreign company. The case was sent to the Irish ECC, which was able
to mediate and persuaded the company to return the amount to the consumer.
A Swedish consumer hired a vehicle from a multinational company in Germany. When
returning it, he asked an employee to inspect the vehicle and it was confirmed that
everything was in order. Once he had gone back to Sweden, the company claimed
there was damage caused by the consumer and made a charge on his credit card
which the consumer objected to on seven occasions. Even so, the credit card company
processed the charge. The consumer then made a complaint to the credit card
company, which was forced to analyse the documentation provided by the consumer
and the hire company in an attempt to prove the viability of the charge. The hire
company had attempted to prove that a repair had been carried out on the vehicle by
means of a document issued by a repair garage which did not in fact exist.
A Spanish consumer hired a vehicle from a multinational company to be used in Italy
for eleven days. From the check-in report it can be seen that the vehicle had damage at
the beginning of the hire period. Two hours after taking possession, someone forced
the lock of the car and stole two suitcases which were inside. The hire company offered
another vehicle with the same contract. At the end of the hire period, the company
charged the consumer €429.67 for the damage caused to the first vehicle, despite the
fact that the repair was only €68.76 and that the damage to the first vehicle had
already been noted in the vehicle condition report completed at the beginning of the
hire period.
The Italian ECC sent a registered letter to the company on two occasions requesting
the refund of €360.61. Eventually the company agreed to the request and proceeded
with the refund.
6. Disagreement with valuation of damage
However, some of the claims received, where the consumers admit to having caused
damage to the vehicle, suggest that the amount of the repair invoices is excessively high,
particularly in the case of companies which do not have an objective and internal damagevaluation system.
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In most cases, the hire company provides a quote from a local repair garage, which does not
inspire the confidence of the consumer. One alternative would be for the quote to be
provided by the official service of the vehicle brand, as is done by some large hire
companies.
Other companies, however, have produced a list detailing the most common damage to hire
vehicles and the amount of the repair.2 This type of information can be offered as an
additional annex to the contract, and may be displayed in the hire office or on the website.
The consumer is thereby guaranteed more transparency and situations of abuse by
companies would be avoided.
Claims like the following ones, received by the United Kingdom ECC, could thereby be
avoided.
The UK ECC reported a claim by an Italian consumer who, during the hire period,
had broken the wing mirror. The consumer accepted responsibility for the damage but
considered that the payment of £250 he was required to make for its repair ₤was
excessive. The claim was submitted to the office of the British Vehicle Rental and
Leasing Association (BVRLA), which is a sector body for out-of-court resolutions of
disputes and the consumer got back £225₤
A British consumer rented a vehicle in Ireland and took out accident insurance with an
excess of €800. During the hire period, the consumer scratched the bumper, causing
superficial and aesthetic damage. When returning the vehicle, he was informed that he
would have to pay €800 for the repair. The company subsequently sent him an invoice
including the amount for a new bumper, €751.87, and he was refunded €48.13. The
consumer considers that a new bumper was not necessary as it would have been more
economical to repair the previous one.
In some cases, the disagreement occurs not so much with the valuation of the damage as
with the intention of the company to also be compensated for financial loss due to the time
for which the damaged vehicle could not be made available to possible consumers.
A Swedish consumer rented a vehicle from a multinational company (AVIS) for use in
France from 8 to 15 August 2004. He had requested full comprehensive insurance.
Before returning the vehicle, the consumer informed the rental company of the
existence of a small mark on the windscreen caused by a stone and signed the
corresponding report. The company charged him €690 for the damage caused. The
consumer requested a copy of the repair invoice. The rental company informed him
that a large part of the amount charged was for the damage caused by the fact that it
could not hire out the vehicle whilst it was being repaired.
The French ECC contacted the company to insist on production of the invoice or proof
of repair and the company decided instead to refund the consumer with the €690 as a
sign of good faith.
2
See example of damage list in Annex 2.
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It is interesting to note that in this last case the intention of the company was to charge the
consumer for lost income during the time taken to repair the vehicle, when it was not
available to be hired out. In fact, the intention of the company would not be in accordance
with the law, as it should prove in some way that there really was a possibility of hiring the
vehicle and that the fact that it was not available prevented the hire from taking place.
Otherwise the financial damage claimed by the company could not be proven.
7. Damage caused by third parties
There have been claims from consumers from whom the rental company withheld the
amount for the repair of damage to a vehicle when the person responsible was not the driver
but a third party. What tends to happen is that although the third party accepts
responsibility, the rental company withholds the amount from the consumer until it is
compensated by the third party's insurance company.
The consumer is forced to accept the action of the company, which is based on a position of
strength in the contractual relationship. In this aspect the sector considers that despite the
fact that the third party in principle admits their guilt, this is no guarantee that their
insurance company will decide to accept liability for the damage caused. As a result, it is
necessary to obtain the acceptance of the insurance company, either through legal or
preliminary proceedings.
A Spanish consumer rented a vehicle in Belgium. In Belgium he had an accident
caused by the negligence of an employee of a local construction company, which
accepted its responsibility. Even so, the vehicle rental company withheld the €380
excess until the two companies had reached an agreement.
8. Vehicle returned with empty petrol tank
When renting a vehicle, consumers should be aware of whether under the terms of the
contract they are obliged to return it with a full or empty fuel tank. In the first case, if they
do not return it completely full, the company will charge them for the refilling service, plus
an amount for each litre of fuel, which is often higher than the market price. In this case, the
company is obliged to inform the consumer of the cost of the refilling service as well as the
price for each litre of fuel. In the second case, if there is fuel left in the tank the company
will reserve the right not to pay the corresponding price for the remaining amount.
There are rental companies which make the vehicle available to the consumer with a full
tank. A separate charge is made for the price of the rental and the fuel. However, the
contract requires the vehicle to be returned with an empty tank. The remaining fuel in the
vehicle will be charged again to the next consumer, which leads to unlawful gain for the
company.
An Austrian consumer rented a vehicle in Germany. The agreed price amounted to
€66. The consumer received an invoice for €276 and therefore requested the help of
the ECC in order to obtain the correct invoice. The ECC contacted the German
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company which offered to reduce the invoice to €116. Apparently, the difference with
the initial price was due to the charge for filling up the tank with 60 litres of fuel. The
consumer accepted the new invoice.
A Finnish consumer rented a vehicle from a multinational rental company. Once he
had returned to his country, he received an extra charge of €20 for not having
returned the vehicle with a full tank of fuel. However, the consumer had in his power a
document through which the company staff accepted that the vehicle had in fact been
returned with a full tank. The company refunded the amount.
An Irish consumer hired a vehicle from a multinational company in Germany and
returned it in Trieste (Italy). At the time the vehicle was returned, and even though an
employee examined the vehicle, which had been returned with a full tank of fuel, the
company charged the consumers with €200 for 76 litres of fuel. When the consumers
made a claim directly to the company, they were asked to send a copy of the receipt
from the service station where they filled up the tank, which they had not kept due to the
time that had passed. They therefore contacted the Irish ECC. The Irish ECC
considered that the company should not have made any charge if, after inspecting the
vehicle, it made no mention of this in the vehicle return report. The Irish ECC passed
the case to the Bolzano ECC, who contacted the company, which then apologised and
proceeded to refund the improperly charged amounts.
9. Customer service after the contract has ended
The ECC network has received complaints from consumers who have come up against
serious difficulties when making a claim against multinational vehicle hire companies due
to the fact that the hire took place in another country. In these cases it seems that it is not
clear which office should deal with the claim; whether it should be the one in the country of
residence of the consumer or the one in the country where the vehicle hire takes place. As a
result the consumer is sent from one place to another, causing unnecessary delays and
problems in the resolution of their claim.
The ECCs consider that multinational companies must make the claim process easier in the
country of residence of the consumer for hire services provided by an office belonging to
the same company group in a different country. It is true that even though they are offices
belonging to the same group, legally they are set up as independent companies in each of
the countries where they are present. However, this fact may escape the attention of
consumers who are only guided by their knowledge of and confidence in the multinational
brand when engaging the service. One way in which this expectation of good service might
not be disappointed would be to make the process for international claims made from their
country of residence easier.
However, it would not be necessary for the office in the consumer's country of residence to
refer to an ADR body for claims caused by the service of an office in another country,
given that as they are independent companies one could not act on behalf of another nor
could it be jointly responsible for the service provided.
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A reservation made by a Finnish consumer who would use the hire vehicle in Italy and
was charged an amount for a service that he had not requested. The consumer, for his
own convenience and to avoid language problems, decided to claim against the
Finnish headquarters of the company. However, they redirected him to the Italian
headquarters, who in turn stated that the case should be dealt with by the international
department, from where he was told to contact the Finnish headquarters.
Another problem that should be highlighted are the internal procedures used by vehicle hire
firms to deal with complaints. Some centres reported that the companies are not very
diligent in handling with complaints coming from consumers or even ECCs based in other
European countries. However, they react favourably giving, at least, an answer when the
complaint comes from a national organism or ECC.
A Swedish consumer rented a car in Scotland and paid a deposit. After the consumer
had checked out he was given a receipt stating that the deposit had been refunded to
his account. Later he discovered that the deposit had not been deposited on his
account. The consumer has called the car rental firm ten times and each time been
promised that the refund would shortly be made. He asks for help with his case since
he has given up on the car rentals will to perform. The car rental firm did not respond
to the letter from the Swedish ECC and thus the case was referred to ECC-UK. When
our colleagues contacted the car rental firm it suddenly happened to find the alleged
documentation signed by the consumer.
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Part II. CURRENT CONSUMER PROTECTION MECHANISMS
In the first part of this report, we analysed the problems caused by short-term vehicle hire
contracts in the EU dealt with by the European Consumer Centres network. Now we turn to
identifying the different consumer-protection mechanisms in force.
After looking briefly at the main regulations applicable to these contracts, particularly the
Directive on Unfair Terms, we shall provide details of specific actions which have been
taken with regard to car hire in application of this directive. We shall then point out the lack
of ADR specifically in the car hire sector. Finally, we shall look at the different initiatives
that the industry has undertaken in various countries.
I. REGULATIONS IN FORCE AND IN PREPARATION
In the absence of European or national provisions which could be applied specifically to car
hire contracts, European consumers have to seek protection in various horizontal
regulations in order to identify what their rights are.
1. The Unfair Contract Terms Directive
As can be seen from the first part of the report, the main source of protection for consumers
who sign a car hire contract is Directive EC 93/13 on unfair terms.
It says that a term is unfair if it creates a significant imbalance in the parties' rights and
obligations under the contract to the consumer's detriment. A term is then unfair if it unduly
weights the contract against the consumer and in favour of the car hire company. It must
also be taken into account whether the imbalance is “contrary to the requirement of good
faith” which includes whether the supplier's behaviour was fair and equitable.
Consequently, a consumer is not bound by a standard term in a contract with a seller or
supplier if that term is unfair.
As demonstrated by the previous analysis of the different complaints, the most frequently
used unfair terms in car hire contracts are those that establish unspecified and hidden
charges and those that place excessive liability on the consumer or that limit or waive the
professional's liability. Besides, terms authorising professionals to unilaterally alter the
contract are also present.
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2. The Distance Selling Directive
Most car hire contracts are not entered into through a distance method, but at the hire
agency office itself. The hire reservations, which are mainly processed on the Internet,
actually only represent a simple commitment by the company to provide a certain model of
car for a certain number of days.
This situation is due to the extensive information required in order to establish a car hire
contract, given that a lot of the information conditioning the hire cannot be ascertained from
a distance, such as for example the age or the faculties of the consumer to drive. The
Directive on Distance Contracts is therefore only effective for the limited number of
companies which enter into contracts by telephone, online or through any other telematic
means.
In accordance with the Distance Selling Directive 97/7/EC, prior to the conclusion of a
distance contract, the consumer must be provided with clear and comprehensible
information, complying with the principles of good faith in commercial transactions. In
particular, the information must state the characteristics of the services and their price and
additional costs, the existence of the right of withdrawal and the place to which consumer's
complaints are to be addressed. As was made clear in the descriptions of the main subjects
of claims in the first part of the report, all these legal precepts would be particularly useful
in the context of car hires.
Nevertheless, the main benefits of this directive for consumers wishing to hire a vehicle
have been denied by a recent decision by the European Court of Justice3.
The UK OFT had asked the company EasyCar to comply with the Consumer Protection
(Distance Selling) Regulations 2000, which implemented the Directive in the UK. Although
most of the dispositions of the Directive do not apply to “contracts for the provision of
transport services” on a specific date or within a specific period (Art. 3.2), the OFT
believed this exemption for transport services covered services provided by train operators,
bus companies and airlines. Under the OFT position, self-drive car hire was not by law a
“transport service”. EasyCar's consumers were therefore supposed to be entitled to the
protection offered by the Directive.
With agreement from the High Court of Justice of England and Wales, this issue was
referred to the European Court of Justice and the position was clarified in March 2005.
Applying a broader interpretation than the Commission or the OFT, the court ruled that
self-drive car hire is a “transport service” and therefore partially exempt from the UK
Regulations on distance selling in application of in application of Article 3.2 of the
Directive. The main consequence is that consumers are not afforded the protection of a
cooling-off period.
3
Case C-336/03 Easy Car (UK) Ltd. v The Office of Fair Trading.
43
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3. The Unfair Commercial Practices Directive
Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the
Internal Market should be transposed to the internal laws of Member States no later than
12th June 2007. The provisions adopted by Member States in this respect should be in force
by 12th December 2007 at the latest.
This Directive protects the economic interests of consumers from the consequences of these
unfair practices when they are significant, i.e. when they may have a direct influence on the
decisions taken by consumers in commercial transactions. It also indirectly protects legally
operating companies from competitors who do not comply with the provisions of the
Directive, thus guaranteeing fair competition.
This regulation amends, amongst others, the Directive 98/27/EC on injunctions for the
protection of consumers' interests, giving different entities the opportunity to ask the courts
to suspend any activities that use these kinds of commercial practices.
The Directive aims to foster consumer confidence, and to do so the general prohibition
should be applied to various points of the contractual relationship between a trader and a
consumer, i.e. before, during and after the formalisation of a contract. It deals mainly with
pre-contractual aspects, such as the method of sale, and the effects these practices might
have on the financial behaviour of the consumer when contracting a product or service.
Consequently, as the majority of the problems related to car hires originate from the
information provided, from the terms of the contract and from the improper charges which
are made in the execution of the contract, the situations that will find answers in the
directive on unfair commercial practices are a minority.
Analysis of the numerous cross-border complaints sent by European consumers to some of
the ECCs with regard to contracting hire vehicles reveals that some vehicle hire companies
carry out misleading practices, either deliberately or by omission.
Under the terms of the directive, a “fraudulent omission” is one where the company fails to
provide, or omits, significant information that consumers need to know before making a
purchase. This fraudulent omission may distort consumers' economic behaviour and make it
impossible for them to make an informed choice. The Directive states this “significant
information” which should be available when there is an invitation to make a purchase. In
the case of vehicle hire, our understanding is that this invitation already exists when
consumers visit the vehicle hire company's website, and also when the contract is presented
for signature when the vehicle is collected. According to the Directive, at the very least,
information on the main characteristics of the service should be suitability provided, as well
as the price, including all taxes. In the case of vehicle hire, one might reasonably assume
that the main characteristics to be specified should include the type of insurance taken out,
what coverage it gives and the price.
44
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4. Proposal for a Directive on Services
It is interesting to note here that the much-debated proposal for a directive relating to
services in the Internal Market COM/2004/2, more commonly known as the Bolkestein
Directive, despite the fact that it does not cover transport services, does textually include
car hire contracts in its scope. In a horizontal approach, this directive is meant to create an
overall framework which serves as a general basis for all service legislation. It would then
create subsidiary legislation which can be turned to in case of need, such as a gap within
specific sector legislation or a lack of legislation, as occurs in the present case regarding car
hire.
a) Effects on consumer protection
The aim of the draft Directive is to remove the legal obstacles that hinder the freedom of
establishment of service providers and the free circulation of services.
This goal can only be achieved through an EU instrument that demands prior coordination
of national regimes and guarantees administrative cooperation. The draft Directive limits
interference with the particular characteristics of national regimes and only proposes
harmonisation as a last resort for those issues that cannot be resolved by administrative
cooperation or by referring to the adoption of codes of conduct at EU level by the interested
parties.
The aim of this directive on services, amongst others, is to harmonise on a general level the
legal provisions for equivalent protection of the general interest in essential matters such as
consumer protection, but without setting specific harmonised standards on consumer
services. In this aspect, this draft directive may therefore be useful to a certain extent since,
with the exception of financial services, there is very little consumer protection legislation
in the service sector.
Chapter IV of the proposed directive is concerned with the quality of services and stipulates
that certain information on the service provided shall be made available to the recipient.
The idea behind harmonisation is therefore essentially to prioritise the obligation of the
service provider to provide information and thus allow the end consumer to make a fully
informed choice.
Moreover, to provide mandatory information such as the general terms and conditions, the
service provider would be obliged to make information on the main features of the service
and the price accessible to the consumer. Following a general principle of law governing
the supply of information, the proposal also stipulates that all the information has to be
given in a clear and comprehensible manner, whether this is mandatory or made available
on request. This information shall be made available in due time prior to the conclusion of
the contract, principally via the internet. It should be pointed out that some car hire
company websites are unclear and incomplete as regards information on terms and
conditions, price and additional costs and the main features, such as the different kinds of
insurance cover possible, for example.
45
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b) The position of the European car hire sector
The European Car and Truck Rental Association (ECATRA) is the European association
that represents the vehicle hire sector at EU institutional level. In the opinion of this
organisation, the draft Directive relating to services in the Internal Market will have little
impact on the short-term vehicle hire sector. This service is unusual in that it provides
consumers with an object, the vehicle, which has a nationality. The nationality is bound to
the vehicle's registration number. In this respect, Directive 83/182/EEC, relating to tax
exemptions applicable inside the EU in terms of the temporary import of certain methods of
transport, prohibits vehicle hire companies from re-hiring their vehicles in a State where
these vehicles are not registered. This means that, in practice, cross-border vehicle hire is
not permitted.
By way of example, ECATRA explains that when a Belgian consumer hires a car to drive
from Brussels to Paris, the Paris agency has to repatriate the car to Brussels, driven by an
employee, or re-hire it to a consumer who is going to leave France within eight days. There
is no possibility of re-hiring the car in Paris to be driven in France because the car is
registered in Belgium. In this way, the impossibility of doing cross-border business
hampers the growth of European hire companies and the draft Directive would not go a
long way towards liberalising this sector.
c) Discrimination based on nationality or residence
The proposal therefore includes a section specifically dedicated to consumers' right to
information about a service, thus addressing a need detected by the Commission. The
Commission regularly receives a large number of complaints from users who wish to
benefit from cross-border services and are willing to accept the costs of these operations,
but who come up against all kinds of obstacles. Consumers often find they are charged
higher prices or denied a service simply because they belong to a particular Member State
or live in a certain country. This kind of problem has cropped up in various sectors: for
example, taking part in sporting events, access to monuments, museums and tourist sights,
etc., and through this study we have also been able to corroborate that this kind of problem
also arises in the vehicle hire sector.
Multinational vehicle hire companies have adapted to the evolution in technology and put
their websites at consumers' disposal to enable them to book online. The main websites of
some of these companies, which tend to be written in English, generally ask consumers to
identify their country of residence before starting the booking process. Once this
information has been entered, the website automatically directs consumers to a subsidiary
site which may contain the information translated into the language of the country
indicated. In other cases, the information remains in English.
It has been proven that when consumers make Internet reservations for a particular service,
the price they are quoted may vary depending on the country of residence they give.
Considering the general prohibition of discrimination stipulated by Article 12 of the Treaty
establishing the European Community, these practices fall under the scope of the article 21
46
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of the proposal on services, which prohibits any discriminatory provisions relating to the
nationality or place of residence of the recipient of the service.
In this case, if a consumer resident in Spain visits the website of a well-known
multinational car rental company website to hire a Renault Clio or similar vehicle for one
day, to be collected and returned at the office at Barcelona airport, it might cost €91.58. If,
instead of living in Spain, the consumer is a resident of the United Kingdom and wants to
contract a vehicle under identical circumstances and with the same company, the price goes
up to €201.26. And if the consumer lives in France, the price is €75.21.
The ECC in Barcelona must highlight that contacted the Spanish company's Customer
Services Department of that company to ask them to comment on this matter. We were
answered that if Spanish citizens make bookings stating that they live in a different country
with the aim of getting a more reasonable rate, they will be charged the difference between
the price of the booking and the price that should actually apply to them in accordance with
their country of residence. At the beginning of October, we wrote to that company
headquarters to hear the reasoning behind these price differences. At the time this study is
published, the ECC in Barcelona had still received no reply.
In this respect, ECATRA, the European sector association, understands that, with regard to
vehicle hire, the price differences related to users' place of residence obey and are justified
by objective criteria. These are based on market conditions, which include the level of
competition, the different costs of marketing operations depending on the country in which
the services are provided, etc.
II. ENFORCEMENT OF THE UNFAIR TERMS REGULATION
Hereinafter, we look at the most important measures which have been implemented in the
EU in application of the regulations on unfair terms with regard to car hire contracts.
1. Injunction actions and dialogue with traders
The courts have the predominant role in enforcing the Directive on Unfair Terms, as they
are the only bodies authorised to declare a term unfair, a point which very few consumers
are individually able to get to.
However, many Member States have established a substantial administrative element.
Indeed, not only consumer associations are entitled to seek injunctions against unfair terms
but the initiative may also be taken by a public body responsible for providing support for
general consumer protection. This is for example the case of the Office of Fair Trading in
the United Kingdom, the Director of Consumer Affairs in Ireland, the Consumer
Ombudsman in Nordic countries or the Verbraucherschutzvereine in Germany.
Moreover, other countries, such as Belgium and France, have specific organisations which
have been created with the aim of recommending the elimination of unfair terms. For its
47
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part, in 1999, Spain created a register of contractual terms which have been declared unfair
by final court decisions, so as to enable anybody to invoke the unfairness of these registered
terms before other Spanish courts.
Lastly, it should be remembered that in order to effectively eliminate unfair terms, certain
national bodies (such as the ombudsman in Nordic countries or the OFT in the United
Kingdom) adopt a market-based approach, which involves the production of sectorial
guidance and negotiations with trade associations in order to agree model terms. This
approach has achieved considerable success for consumer protection in general.
Focusing now on the car hire sector, just as the Commission reminds us in its report on the
implementation of the directive on unfair terms4, as in other sectors such as timeshare and
holiday services, the Commission has subsidised consumer studies which have also led to
actions for injunctions in regard to car hire contracts. According to the same report, the
results of these actions have been positive in the car hire sector, in that the professionals
have consented either to the modification of their contractual terms and conditions or to the
negotiation of changes in the near future. Indeed, some of the designated national
enforcement bodies have the power to seek an order forbidding any further use of it when a
term drawn up for general use is considered unfair. However, cases are normally resolved
informally when the professional accepts undertakings rather than injunction proceedings.
2. The UK Office of Fair Trading
At the level of individual negotiation, the case of the United Kingdom is particularly
interesting, since the Office of Fair Trading plays a central role in eliminating unfair terms.
Indeed, the UK Regulations also give the OFT powers to stop the use of unfair standard
terms by businesses and to prevent anyone from recommending such terms, if necessary by
obtaining a court injunction.
Once it receives a complaint about a term, the OFT will consider its fairness under the
Unfair Terms in Consumer Contracts Regulations 1999. Where there appears to be a
breach, the OFT initiates discussions and negotiations in order to persuade the professional
to modify the term in question.
In this way, the OFT has been made aware of unfair and confusing contract terms being
used in the hire car market in the UK. The British Vehicle Rental and leasing Association
(BVRLA) approached the Office of Fair Trading in 1998 and 2003 in order to agree model
terms for use by its members. Indeed, the BVRLA-recommended contract was previously
difficult to understand and contained some unfair terms.
The results of the OFT action can be found in their quarterly Unfair Contract Terms
Bulletins as they contain reports of cases where standard contract terms have been changed
or dropped as a result of its enforcement action. A detailed examination of these Bulletins
reveals that many of the terms quoted refer to incomprehensible or very unclear terms or to
unspecified and hidden charges. Terms on the restriction of liability for death or personal
4
Report from the Commission Implementation of Council Directive 93/13/EEC, of 5 April 1993 on unfair
terms in consumer contract, COM (2000) 248.
48
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injury due only to negligence and terms on the restriction of liability for damage or loss due
only to negligence are also recurrent. It appears that the OFT continues to monitor
complaints about this sector and continues to take action where appropriate.
3. The Irish Office of the Director of Consumer Affairs
In Ireland, the public administration body for protecting consumer’s collective interests is
the Office of the Director of Consumer Affairs. Although the Director of Consumer Affairs
is responsible for the enforcement of a wide range of consumer protection laws, she cannot
help any individual consumer in a private dispute by seeking compensation or other redress
for problems experienced in the past. Nevertheless, she can step in to protect consumers in
general by seeking to prevent the use of an unfair term or practice by trying to resolve the
matter with the business concerned or applying for a High Court Order.
As in the United Kingdom, the public administration body responsible in Ireland for
protecting consumers' collective interests initiated some actions related to the car hire
sector. It secured the agreement of the Irish Car Rental Council to encourage its members to
improve the transparency of their respective websites, improving the availability of terms
and conditions for consumers booking their car hire online.
The Irish Car Rental Council, which represents the vast majority of car hire companies
based in Ireland, also agreed to include the Office's proposal in any redraft of their Code of
Practice.
4. The French Commission for Unfair Terms
In France, the responsible body in this respect is the Unfair Terms Commission5, which is
made up of law specialists, consumer representatives and professionals, and reports to the
French Consumer Ministry. Its mission is to examine contracts proposed for consumers,
find the unfair terms and recommend their modification or elimination. Although its
recommendations are not binding, they can however be invoked before the courts, which
will always have to take them into account.
The Commission may also be consulted by a court during legal proceedings in order to
obtain its ruling on the unfair nature of a contractual term.
In 1996, the Commission published an extensive and detailed recommendation on car hire6
in which the elimination of forty-four types of terms is requested. The consequence of this
far-reaching improvement work has been that the terms and conditions of French
companies are unquestionably less apocalyptic than those in most countries in the EU.
5
6
La Commission des Clauses Abusives.
Recommendation No. 96-02 on Vehicle Hire (BOCCRF of 3/09/1996).
49
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5. The Spanish consumer association OCU
The Spanish Consumer Association (OCU)7 published a report in 1997 which, in
collaboration with six European consumer associations, analysed different standard-form
contracts, and initiated negotiations with a view to persuading the car hire companies based
in Spain to bring their general terms and conditions into line with the Spanish transposition
law on unfair terms.
Since these negotiations were unsuccessful, the consumer association decided to sue.
Subsequently a number of firms, mainly Avis and Europcar, reacted and agreed to sign
agreements with the association with a view to eliminating and modifying the offending
terms, thereby achieving a more balanced hire contract. Nevertheless, another third
international company continued to reject any changes in its terms and was taken to court
by the OCU. For strictly procedural reasons relating to the legitimacy of the OCU as a party
to proceedings in defence of the general interest, this action was eventually rejected and the
court did not go into whether or not the contested terms were unfair.
It should be remembered that this preventative work undertaken by the OCU is one of the
projects for the elimination of unfair terms which has been carried out thanks to the
financial assistance of the European Commission.
6. The CLAB European Database
Finally, it should not be forgotten that the Commission created an instrument for
monitoring enforcement of the Directive in the various Member States, the CLAB
database8, where about fifteen terms on short-term car hire currently appear. Jurisprudence,
as understood by CLAB, covers not only court judgements but also decisions by
administrative bodies, voluntary agreements, out-of-court settlements and arbitration
awards.
III. REDRESS
PROCEDURES
SCHEMES:
OUT
OF
COURT
SETTLEMENT
Besides the traditional legal channels, the out-of-court redress mechanisms for car rental
contracts are the general consumer arbitration boards, as there is no official specific ADR
body in the car hire sector.
Consequently, and in spite of the marked specificity and complexity of a car hire contract,
the only ADR bodies which can deal with a hire case are those bodies which have a general
scope of application, as is the case in some countries, such as Spain. It is also revealing that
car rental is excluded from the jurisdiction of recognised specific ADR bodies in the vehicle
7
8
Organización de Consumidores y Usuarios.
It can be consulted on the Commission's Server http://europa.eu.int/clab/index.htm
50
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sector, as is the case for example of the Portuguese Arbitration Centre for the Motor
Vehicle Sector9 or the Scottish Motor Trade Association.
For illustrative purposes, we list below some mechanisms that are competent to deal with
claims relating to the car hire sector and likely to be of interest for European consumers.
1. The ARN in Sweden
The National Board for Consumer Complaints (ARN) is a national authority directly
responsible to the government (Ministry of Finance). Its aim is to deal with all consumer
issues and it is divided into departments for the investigation of consumer disputes. Two of
them, the Motor Vehicle Department and the Travel Department can thereby deal
specifically with claims related to car hire.
Through this procedure, a cross-border claim by a European consumer resulting from a hire
contract with a Swedish company can be freely investigated by the Swedish Board, once an
attempt has been made to reach an agreement with the trader concerned.
Given that the Board process is a purely written procedure and that the parties are not
therefore entitled to be present at the meeting, the claim can be made through distance
methods. The Board's decision will be a recommendation to the parties about how the
dispute is to be settled.
2. The CIMAAL in Portugal
The CIMAAL10 is a regional body for out-of-court settlements of consumer disputes set up
in the Algarve region in 2000 by the Portuguese Ministry of Justice, Consumer Protection
authorities and associations, the Algarve Tourist Region and, among other sector
associations, the Portuguese Association of Car Rental Companies11. It appears that this
association agreed to participate and be involved in CIMAAL because of the substantial
presence in the Algarve of car hire companies and the strong links the CIMAAL has with
the tourism sector.
CIMAAL is a traditional consumer dispute resolution centre, created to solve consumer
disputes through mediation, conciliation and voluntary arbitration. Free of charge, the
CIMAAL decisions reached in the arbitration tribunal have the same weight and scope as
the decisions of the County Courts of the first instance.
In spite of the fact that only one car hire company12 is adhered to the CIMAAL, in a case of
a dispute involving an ARAC member, there is a strong possibility that the company would
accept the arbitration.
9
Centro de Arbitragem do Sector Automóvil.
Centro de Informação, Mediação e Arbitragem de Consumo do Algarve (Algarve Information, Mediation
and Arbitration Centre).
11
Associação dos Industriais de Aluguer de Automóveis sem Condutor (ARAC).
12
Locauto, Automóveis de Aluguer sem Condutor, Lda.
10
51
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On the condition that disputes occurred in the Algarve or have some kind of link to that
region (i.e. consumer residence, hire car companies offices), the CIMAAL accepts
complaints from consumers all over the EU, which can be lodged by any means (mail, fax,
letter) in order to start the procedure.
3. The Transport Arbitration Board in Spain
In addition to its general consumer arbitration system, the scope of application of which
covers all consumer sectors, Spain has only one ADR body whose jurisdiction is limited to
a specific sector. As a matter of fact, Transport Arbitration Boards13 have been created in all
the Autonomous Regions in Spain, and their main objective is to resolve commercial claims
related to the fulfilment of contracts for land transport and auxiliary and complementary
transport activities.
The Spanish Transport Arbitration Boards can therefore, free of charge, resolve claims
related to all land transport, including urban (bus, taxi, tram) and intercity (coach, taxi,
train), for freight and for passengers (regular or tourist). Car hire contracts can be found
within this last sector.
IV. SECTORIAL INITIATIVES AND SOFT LAW
On the one hand, amicable agreement is the best way to resolve a consumer dispute. On the
other, it has been shown that the problems resulting from car hire contracts are serious,
widespread and constant. We could therefore expect the car hire sector to create
mechanisms which would enable better protection for the consumer and would benefit
everyone. However, the reality is quite different, taking into account that there are very few
sector initiatives in existence today in this field, and even fewer at European level.
In order to illustrate the usefulness that the soft law can have when tackling consumer
problems in a clearly defined sector, we have detailed some examples of codes of conduct,
standard contracts and internal redress schemes.
1. The Codes of Conduct
Codes of Conduct, when they are not simply cosmetic, aim to promote and safeguard
consumers' interests by helping consumers to identify those businesses which are
committed to aiming for higher standards of customer service by meeting core criteria and
delivering on the promises contained in them. Irrespective of the policy adopted by each
13
Juntas Arbitrales del Transporte.
52
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company, they seem to be a little-used resource in the car hire sector. However, it is worth
explaining the examples provided for us by the United Kingdom and Ireland.
a) The UK BVRLA
The BVRLA is the major representative trade body for companies engaged in short- and
long-term hire of passenger and commercial vehicles in the UK. Indeed, this professional
association alone represents 85% of the turnover in the hire and leasing of vehicles in the
United Kingdom.
It has set up a Code of Conduct which is mandatory for all of its members and which
contains a high level of service standards with which they have to conduct their business.
The BVRLA established in particular that consumer complaints should be resolved quickly
and amicably, as the car hire companies which are members of the BVRLA must for
example issue a response to a consumer complaint within five working days, with the aim
of resolving the dispute within fifteen working days. Furthermore, BVRLA members must
ensure that their employees are trained to handle complaints and deal with consumers.
BVRLA members must also maintain a complete record of complaints dealt with.
It should be pointed out that the BVRLA has not put its code forward for approval under the
Consumer Codes Approval Scheme of the Office of Fair Trading at the present time14.
b) The Car Rental Council of Ireland
All companies approved by the Car Rental Council of Ireland operate according to a Code
of Conduct drawn up by Bord Failte, the Irish Tourism Board. As explained above, the
Office of the Director of Consumer Affairs secured the agreement of the Car Rental
Council of Ireland to include the Office's proposal in any redraft of their Code of Practice.
Nevertheless, this Code appears to have been limited to minimum standards and not
especially orientated towards consumer protection. It therefore lacks real effectiveness
when establishing more demanding standards and requirements for hire companies.
3. Standard contracts
Standard-form contracts are usually drafted in the framework of negotiations between the
consumer associations or bodies with a legitimate interest in protecting consumers and
14
The Office of Fair Trading (OFT) removed indeed its endorsement from all Trade Association Codes of
Conduct three years ago. This was subsequently replaced by a new OFT Approved Code scheme which
required each Trade Association to meet the new OFT criteria set.
53
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professionals or professional associations. Regarding car hire contracts, it is clear that the
Rental Agreement is the single most important document for the consumer.
For example, in the United Kingdom, a standard contract was drafted by the British Vehicle
Rental and Leasing Association, in close collaboration with the Office of Fair Trading
(OFT)15. The BVRLA thereby not only dropped unfair terms from its contract but also drew
up a model contract for its members with fairer terms in clear language.
The BVRLA rental agreement is a high-quality legal document designed to cover rental
agreements on both cars and commercial vehicles. It represents a definitive point of
reference for British companies since its terms and conditions are accepted as the industry
standards and it is a very interesting and clear model for consumer protection16.
It is worth emphasising here the care which has been taken with the presentation and form
of the contract, which has been structured in clear and well-defined sections17. The most
relevant and important aspects of the contract, such as the options relating to insurance and
the various charges, are given particular emphasis so that the consumers can agree a service
with a better knowledge of what is involved.
4. Sector Redress Schemes
Complementary to a set of rules, effective soft law, as with all kinds of regulations, must
also contain a redress mechanism that comes into play when things go wrong. In order to
deal with consumer complaints, some European car hire sector associations have
established redress schemes.
Nevertheless, these bodies are made up of members of the hire industry and therefore do
not comply with the principle of independence. For this reason, they cannot become EC
recommended ADR Bodies. However, this does not mean that they cannot be of real use to
consumers.
a) The CNPA in France
The Conseil National des Professions de l'Automobile (CNPA) is the professional
organisation which represents professionals from the car sector in France. Among others, it
has a branch dedicated exclusively to the car hire sector (Branche Nationale des Loueurs de
Véhicules)
The CNPA has established a Conciliation and Arbitration Commission which purpose, as
its name suggests, is the amicable solution of cases of consumers in disputes with
15
It should be noted that the OFT always reserves its position on all terms when concluding negotiations and
may seek to challenge terms in the future if they are found to expose British consumers to unfairness. In that
way, it cannot guarantee that it foresees all possible objections that could be made in the future.
16
See Annex 4.
17
See Annex 3.
54
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professionals from the car sector, whether these relate to the purchase or repair of a vehicle,
or for hire.
Consumers who have not been able to directly solve disputes with French car professionals,
in this case, car hire companies, can therefore contact the CNPA in order for it to deal with
their cases.
This is a strictly internal mechanism and is therefore not supported by the recommended
ADR regulations. Nevertheless, it has twin objectives which are not insignificant in terms
of consumer protection. On the one hand, it attempts to help professionals to handle the
disputes that they have with their consumers in an amicable manner. On the other, it enables
professionals and consumers to be informed of their rights and obligations as clearly as
possible, something which is never unwelcome in the case of car hire.
In the event of a claim about car rental, conciliation is the option most commonly used by
the CNPA. If the decision is in favour of the consumer, the CNPA contact therefore the
professional in order to establish the basis for an amicable solution and present the
agreement proposal to the consumer.
b) The UK BVRLA
The BVRLA Code of Conduct founds in addition an internal conciliation procedure to help
resolve disputes between consumers and BVRLA Members that cannot be easily resolved.
Regarding consumer cross-border litigation, it is important to mention that the BVRLA
does have the jurisdiction to deal with complaints made against UK hire companies by
foreign consumers. Almost 15% of the complaints received by the BVRLA each year are
from foreign consumers. The BVRLA complaint form18 represents an extremely useful tool
to speed up and facilitate claims in this regard, especially when they are processed from a
distance.
In the first instance, the BVRLA will write to both parties in order to resolve the complaint.
If there is no agreement between the consumer and the BVRLA hire car company, then the
relevant details will be forwarded to a Conciliation Committee, a body whose Members are
exclusively appointed by the Management Committee of the Association. Its decision will
be notified to the consumer by the BVRLA within 30 working days of the referral of the
dispute to the Conciliation Committee.
From the experience of the network of European Consumer Centres, the undoubted
usefulness of this instrument has been shown as regards the consideration of consumer
rights.
18
See Annex 5.
55
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c) The Car Rental Council of Ireland
The Car Rental Council of Ireland also offers an internal complaints procedure with regard
to member companies. It can thereby contribute to solving cross-border complaints made by
European consumers. Despite the fact that the members of its complaints procedure body
are all from the industry, the Car Rental Council, from the experience of the Dublin ECC,
has proven to be efficient and effective when dealing with consumer complaints. All were
dealt with in a fair manner and the procedure took no more than four weeks in each case.
V. INFORMATION AND EDUCATION CAMPAIGNS
To conclude this examination of the existing different measures of consumer protection, we
should mention the various information campaigns which have been undertaken for car
hire.
In fact, agreeing a car hire is a transaction which includes a multitude of very varied and
complex parameters. It contains complicated and confusing elements, particularly for
people not used to the procedures involved, as is the case of occasional consumers who are
on holiday. Different items are therefore mixed together which relate not only to payment
for the hire period but also to the large number of other services and to circumstances which
may occur during the hire, such as for example accident or breakdown assistance, the
application of different insurance policies and guarantees, or the establishment of the
respective liabilities of the parties.
It is worth remembering that it is not often that an object with a minimum value of €12,000
is borrowed. A special general effort to achieve clarity and clarification of the terms and
mechanisms of a car hire contract is therefore required.
Different sector associations have therefore produced interesting and useful publications
and guides, with the aim of making a hire more accessible and comprehensible to normal
consumers.
They define for example the different terms of a contract, which are usually written using
jargon which few are able to understand. They detail the different levels of cover which
may exist. These guides also explain the circumstances in which a client may be liable.
They thus provide a detailed description of the different steps to be followed by the
consumer, their rights and obligations, and those of the companies.
In the best cases, these information campaigns have been run in coordination with
consumer authorities and associations, as has been the case in France with the CNPA Rental
Guide.
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Part III. TOWARDS A BETTER CONSUMER PROTECTION
We have firstly described the problems suffered by EU consumers in connection with
vehicle hire contracts and have detailed afterwards the various existing consumer-protection
mechanisms.
This analysis reveals that such problems are exclusively civil in nature, as opposed to the
timeshare sector, for instance, where the problems are mainly of a criminal nature19. The
civil nature of this issue suggests it will be easier to take the steps required to increase
consumer protection and boost consumer confidence, and holds out the hope that these
steps will have a greater chance of success.
We have also shown that this is an issue of considerable magnitude. It affects all the EU
countries on an equal basis, as corroborated by the experience of the European Consumer
Centres network, and it concerns many different kinds of vehicle hire companies:
international companies operating in most of the Member States, companies operating in
just one country, and small companies heavily dependent on tourist activity.
Finally, this is a recurrent problem. The same kinds of complaints have been reported over
recent years, in a constant and even increasing manner.
Taking all the above into consideration, we outline hereinafter a number of different
measures that may provide solutions to the current problems in this sector. In this way, we
hope to encourage further reflection and debate on this issue. We would welcome
discussion as to which type of measure would be the most appropriate at EU level. This
should include the question of whether there is always a need for recourse to legal
instrument, either applying regulations in force in a more effective way or modifying them
or adopting new ones. Finally, the possibilities for self-regulating measures by market
participants should be considered.
I. STRONGER ENFORCEMENT OF THE LEGISLATION
1. Regulation on unfair terms
Over the years, there have been big changes in the way services are advertised, sold and
delivered. Indeed, services provided by companies in certain sectors are now to a large
extent uniform. A consequence of this evolution is the now widespread use of standard
contract terms, which means that many consumers enter into the same contract, and an
unfair contract term can therefore affect a vast number of consumers.
19
See the 2002 ECC network report Timeshare in Europe. The experience of European Consumer Centres.
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This study has not only demonstrated the ubiquity of unfair terms in standard-form car
rental contracts, but also the enormous difficulty of getting access to the contractual terms
before concluding a contract, or independently of such a contract. In addition to the
presence of certain contractual terms, unfairness may also result from the imprecision or
unintelligibility of certain terms and even from the fact that contracts remain silent about
certain matters.
Since it is impossible to rely only on contractual autonomy in this area, greater dialogue
between consumer administrations, unfair-terms enforcement bodies or consumer
associations and the relevant professional organisations is certainly a productive approach.
Concluding fully fledged sectorial-level agreements with a view to drafting fair-standards
contracts avoids having to negotiate with each and every firm and can achieve results for
consumers across a sector. This is certainly the case in the vehicle hire sector, as
demonstrated by the experience of close work between the OFT and the BVRLA in the UK.
Furthermore, vehicle hire usually includes a cross-border dimension, since the consumer
and the company are frequently from different countries, especially when the hire is for
tourist purposes. At EU level, simultaneous cooperation between different consumer
associations or administrations in several Member States to remove unfair contractual terms
would be another option.
2. Injunction action
Directive 98/27/EC of 19 May 1998 on Injunctions for the Protection of Consumers’
Interests stipulates that the Public Prosecutor and authorised entities may be parties in
injunction suits before civil courts to defend the collective and individual interests of
consumers and users. Injunctions could therefore be a complementary or alternative
initiative to the aforementioned cooperation. It could also serve as an intimidatory measure
to persuade a company to accept negotiation of their terms and conditions.
The Injunctions Directive may be used to stop the use of an unfair contract and to obtain an
order to stop any behaviour which damages consumers’ rights or interests. This approach to
eliminating unfair terms based on injunction actions is a “negative” system. Once a term is
declared to be unfair, the court orders that it must be removed from the contract. The
professional must cease to use this term in consumer contracts and will normally replace the
term with another one. Nevertheless, we should note that in view of the numerous vehicle
hire contracts containing unfair terms, very few bodies have used this extremely valuable
complementary measure. The European Commission should reinforce and systematise
subsidy of this kind of practice.
At cross-border level, the authorised entities of other EU Member States set up to protect
the collective and individual interests of consumers can also take part in a legal process in
another EU country. Most of the bodies or organisations notified to the Commission by
Member States under the Injunctions Directive are consumer organisations. So far, despite
the fact that injunctions are fast-acting instruments, very few authorised entities have sought
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cross-border injunctions20. The European Commission should also encourage designated
bodies to bring action for the injunction of unfair terms in another country. Nevertheless,
since vehicle-hire problems are not centred on a few countries in particular, we believe this
action has a lower priority.
3. CLAB European database
The CLAB database is the European Commission instrument for monitoring practical
enforcement of the Directive throughout the EU. It contains the different “national
jurisprudence” governing unfair terms. Regrettably, this valuable instrument has fallen into
oblivion in recent years; it would undoubtedly be in the general interest to promote its use
once again, especially in sectors governed by adhesion contracts containing unfair general
terms that are very similar from one country to the next, such as the vehicle hire sector.
II. REVIEW OF CONSUMER ACQUIS
The recent report regarding the European Contract Law initiative21 reminds us that, in order
to better achieve its Better Regulation goals22, the Commission launched the review of the
acquis to simplify and complete the regulatory framework23. The need for greater coherence
in European Consumer Law would entail, in particular, a review of the existing law on
contracts concluded with consumers in order to remedy possible inconsistencies, to fill in
and to simplify legislation.
The Commission is presently in the diagnostic phase, which consists of identifying
regulatory problems, Internal Market barriers and consumer protection lacunae and
assessing whether they stem from problems with the existing consumer directives or from
their incorrect implementation or application by the Member States.
With regard to the vehicle hire sector, if the Commission finally concludes that the best
option is a vertical approach consisting of individual revision of existing directives, it
would be advisable to consider the opportunity of making legislative changes.
As a result of the aforementioned sentence of the European Court24, it would be suitable to
specify definitively in the text of the Directive whether the car rental sector is included with
or excluded from the main consumer protection rights established by the Directive on
20
Up to date, there has only been one injunction action leading to court decision that has made use of the
Directive 98/27/EC for an intra-Community infringement.
21
See the Report from the Commission First Annual Progress Report on European Contract Law and the
acquis Review, COM (2005) 456 final.
22
See the Communication from the Commission Simplifying and improving the regulatory environment.
Action plan, COM (2002) 278 final and the Communication from the Commission Better Regulation for
Growth and Jobs in the European Union, COM (2005) 97 final.
23
Communication from the Commission Updating and simplifying the Community acquis, COM (2003) 71
24
Case C-336/03 Easy Car (UK) Ltd. v The Office of Fair Trading.
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distance selling. It is worth remembering that during the procedure before the European
Court, the European Commission itself, along with the governments of the United
Kingdom, Spain and France, took a contrary position to the sentence, and appealed
exclusively to the protection of consumer rights25.
In addition, it would also be advisable to take advantage of this initiative to consider the
possibility of modifying the directive on unfair terms so it can better handle the problems
arising from vehicle hire contracts.
III. NEW EUROPEAN REGULATION
1. EU Competences
In accordance with the principle of subsidiarity, legislation at EU level should be limited to
those aspects where Community acts are preferable and add value. In the area of vehicle
hire, there are many questions for which new national legislation would be perfectly
satisfactory for solving the present problems. However, vehicle hire is one of the matters
which would largely benefit from a coherent legal EU-wide framework. We believe the
issue of vehicle hire is appropriate for EU action and it is within the EU’s scope to act. As
the vehicle hire sector is mainly a cross-border market, this matter should be solved at EU
level.
By harmonising Member States’ laws, regulations and administrative provisions on vehicle
hire contracts, a common high level of consumer protection can therefore be better achieved
at Community level than by the different Member States themselves.
2. A specific car rental regulation
Simple, harmonised customer-protection rules in Community Law is often a good way to
enhance consumer confidence. However, the obligations and liabilities of the parties in a
vehicle hire contract are not specifically defined by law in the Member States. The question
of one specific legal instrument needs, therefore, to be addressed.
As Eurobarometer surveys demonstrate, consumers in Europe are very much in favour of
clear, comprehensible and essential rules at a high level on their rights and obligations. An
EU regulation could then contribute considerably to solving these problems of legal clarity
and simplicity about vehicle hire. Moreover, given the wide range and large number of
players involved in the vehicle hire sector across the Internal Market, self-regulation may
not be the appropriate way forward in order to harmonise information requirements.
Given the increasing volume of vehicle hire in the EU, the creation of a common market in
this respect would benefit consumers and service-providers alike. It is also necessary to
25
See Opinion of Advocate General Stix-Hackl delivered on 11 November 2004, Case C-336/03.
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remember that one of the aims of the European Union is to make the Internal Market a
reality. The tourist sector, which includes the vehicle hire sector, represents an essential
aspect of the Internal Market, playing an increasingly important role in the economy of the
Member States. Accordingly, the legal basis of that possible regulation should be Article 95
and Article 153 3b of the Treaty, which, while including measures for the completion of the
Internal Market, extends to the protection of consumers’ economic interests.
This regulation would give rise to the creation of a minimal set of common rules that would
ensure proper functioning of the market and provide consumers with a high level of
protection, by specifying the minimum obligations that should be met by vehicle hire
companies. That sectorial approach could be inspired by protective regimes recently
proposed by the European Commission in the fields of rail26 and coach transport27,
following the model of the regulations governing air passengers and providing legal rights
and remedies for users.
Defining the general terms and conditions regulating vehicle hire should take priority. This
way, focused, coherent and consumer-friendly information requirements before and after
execution of a vehicle hire contract could be established by law.
An important requirement for effective competition in the vehicle hire sector in the Internal
Market is consumers’ ability to easily compare services. Transparent contractual obligations
are utterly crucial to achieve this goal.
Information given to consumers should be focused and limited, so it is read in full. One of
the most difficult issues with respect to vehicle hire contracts is striking the right balance
between ensuring consumers are fully aware of their rights and obligations and not
including an excessive amount of information which would discourage consumers from
actually reading it all. Nowadays, consumers are increasingly subject to information
overload, and to draw up a list of essential information requirements would be necessary. In
addition to providing transparency and legal certainty to both consumers and providers,
such a list should also encourage the provision of the essential information in a clear,
concise manner that is easily understood by consumers.
This legal regulation would need to be done carefully and in accordance with the
Commission's most recent principles of Governance28 and Better Regulation29. Wideranging, overarching legislation could be counter-productive, by creating unnecessary
complexity and disproportionate compliance costs that, generally, would inevitably be
passed onto the users individually or as a whole.
Legislation must provide added value in terms of stability, efficiency (including the Internal
Market dimension), security and service at users' convenience. Although it is rather difficult
to establish fully conclusive and objective cost-benefit assessments, the overall welfare
objectives always need to be observed. Application of a specific regulation in the vehicle
hire sector would not imply a priori any disproportional impact for companies in the sector.
26
See Proposal for a Regulation on International Rail passengers’ Rights and Obligations, COM (2004) 143.
See the Communication from the Commission Strengthening passenger rights within the European Union,
COM (2005) 46 final, and the Commission Staff Working Paper Rights of passengers in international bus and
coach transport, 14 July 2005.
28
Communication Simplifying and improving the regulatory environment. Action Plan, COM (2002) 278.
29
See Communication European Governance: Better lawmaking, COM (2002) 275 final.
27
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The scope of this regulation should also be considered, i.e. its possible limitation to crossborder vehicle-hire transactions, similar to the Directive on cross-border bank transfers, for
instance. This option, rather exceptional in EU legislation, could make sense if it would be
proved that the problems related to vehicle hire contracts tend to arise when they contain a
cross-border element, such as when the consumer and hire company are of different
nationalities.
Consumers from a different country to the hire company enter into contracts with similar
terms to those entered into by consumers from the same country. So, in that sense, it would
be illogical that there would be found more problems regarding the rentals made by foreign
consumers compared to those made by national consumers.
Nevertheless, as regards the different unfair practices in the execution of the contract, such
as the numerous unfair charges we have denounced previously, consultations with different
ADR bodies reveal that these practices tend to occur less frequently with consumers from
the same country. This can be explained in terms of the weaker situation consumers are in
when contracting a service in another country, due to the language barrier and the
difficulties they face when defending the application of their rights.
Finally, it is important to remember that EU regulations designed to harmonise a new sector
normally base their legitimacy on the existence of considerable differences between
practices in this sector in different Member States, which create obstacles and distort the
Internal Market. In the case of the vehicle hire sector, however, such disparities simply do
not exist. For the same reason, in the absence of any specific national regulation in the
ector, new cross-border regulation on car rental could not be logically justified by possible
disparities among the national legislations.
3. A single directive on Passengers’ Rights
In its recent report Protecting the Rights of Passengers and Holidaymakers30, the European
Consumer Law Group raised the interesting proposal of a single directive on the rights of
passengers, travelling by plane, train, coach or ship. It would also include some aspects of
the present directive on package holidays31, which would be considered obsolete.
Nowadays, unlike twenty years ago, greater protection for holidaymakers booking an entire
package rather than organising transport, accommodation and tourist services separately
simply cannot be justified.
The Commission has been very active in the transport sector in recent years. After
regulating specifically air passengers’ rights by means of Regulation 261/2004, in 2004, the
Commission published a proposal for regulating rail passengers’ rights32. This way, the
Commission lays down provisions on the minimum requirements for information to be
provided to rail passengers before, during and after they journey. It establishes also the
contract conditions as well as a responsibility system in case of accident, delay and
cancellation of the service.
30
ECLG/039/05 –February 2005.
Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours.
32
COM (2004) 143.
31
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Finally, the Communication on passenger’s rights33 issued by the Commission some
months ago raised the possibility of drawing up specific sectorial regulations to extend such
rights to passengers on other means of transport, such as maritime or coach transport.
The European Consumer Law Group, however, recommends adopting a single legal
framework, which would be known as the Consumer Travel Directive, to protect passengers
and holidaymakers, regardless of which means of transport they use. As far as this novel
proposal for regulation is concerned, we could consider the option of including vehicle hire
contracts within its scope of application.
In that sense, it is worth recalling that the European Court of Justice, in its recent sentence
establishing that vehicle hire is exempt from the main benefits of the distance-selling
directive, has defined vehicle hire as a transport service. The Court argues that transport not
only designates the action of moving people from one place to another, but also the means
of transport involved. Therefore, if a means of transport such as vehicle hire is made
available to consumers, it forms part of the services within the transport sector which are
exempt from application of the directive, like air transport and others transports.
If we follow this reasoning and bear in mind that the rights established by this single
directive could be highly useful in the vehicle hire sector, it would not be incoherent to
include vehicle hire within this new single legal framework proposed by the European
Consumer Law Group.
4. Regulation of the revocability of the payment
Overcharging consumers’ credit cards is one of the main sources of claims in the vehicle
hire sector. In such cases, it would be useful for the originator of a payment order to be able
to lawfully cancel it. The Commission is precisely thinking about regulating the
revocability of payment, including payments made with a credit card. This regulation would
fit into the general legal framework for the Single Payment Area in the Internal Market
which is now being prepared at EU level34.
In fact, for credit card payments, the legal situation within the EU is highly fragmented and
could constitute an obstacle to the well-functioning of the Internal Market35. Some Member
States prescribe that credit card payments are irrevocable, which means that consumers
cannot revoke payments once they have been made (Ireland and the UK). Others allow the
possibility of revoking a credit card payment under specific circumstances (Belgium,
Luxembourg). Others do not have any binding legislation, since there are no legal
provisions concerning the issue (Finland, Denmark). Harmonised revocability rules would
therefore improve the efficiency and transparency of existing and forthcoming payment
systems.
33
COM (2005) 46 final.
It is foreseen that the proposal of directive establishing a new legal framework for payments in the Internal
Market will be adopted on the 1st December 2005, imminently after the publication of the present report.
35
See A possible Legal Framework for The Single Payment Area in the Internal Market: Revocability,
National rules related to the right to revoke a payment, MARKT/4010/2003 – Final Draft.
34
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The Commission Recommendation 97/489/EC concerning transactions by electronic
payment instruments36 had already foreseen that payment instructions given by a holder in
respect of transactions effectuated by means of an electronic payment instrument should be
irrevocable, except if the amount was not determined when the order was given (Art. 5 d).
However, effective European legislation on revocability with regard to the rights of
Payment Service Users does not exist.
In its consultation paper as a step towards creating a Single Payment Area in the EU (COM
(2003) 718), the European Commission included preliminary suggestions for future EU
legislation. The Communication was accompanied by twenty-one Annexes raising various
specific legal and technical issues concerning the efficient functioning of the Single
Payment Area. One of them was conditions under which consumers can revoke payment
orders.
In this way, as far as credit card payments are concerned, the Commission suggested
establishing a specific right to revoke a payment order, if the amount was not determined by
the originator when the order was given37. The last version of the European Commission
working document on the draft Directive on the New Legal Framework for Payments
detailed that principle of revocability38.
It should be noted that rules on irrevocability would not impede any other legal or
contractual rights of the Payment Service User, such as a refund related to the legal right of
withdrawal or a charge-back resulting from breach of contract by a trader.
To justify this exemption of the principle of irrevocability, the Commission takes precisely
the example of vehicle hire, where the total amount of the transaction is not determined,
since it depends on different factors as for example the number of days within which the
vehicle will be returned.
Revocability of credit card payment orders if the amount was not determined by the
originator when the order was given could reduce traders’ confidence, because they would
have to consider that a payment order could be revoked anytime. Nevertheless and
especially regarding the vehicle hire sector, the Commission proposal to provide a specific
right to revoke payments of amounts not determined in advance could be justified. Indeed,
when consumers sign a vehicle hire contract, they are in effect giving companies a blank
cheque, which implies the highest levels of consumer trust in the service supplier. In return,
consumers warrant the highest levels of protection.
36
Commission Recommendation 97/489/EC of 30 July 1997 concerning transactions by electronic payment
instruments and in particular the relationship between issuer and holder.
37
"A payment order given by the originator via the beneficiary of the payment is irrevocable [except if the
amount was not determined when the order was given]".
38
See in Annex 6: Art. 27 of the European Commission Working Document on the draft Directive on the New
Legal Framework for Payments in the Internal Market, Version 5.0 (26.11.2004). It seems that some formal
changes regarding that article have been introduced in the imminent final proposal of directive.
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IV. A SPECIFIC ADR FOR CAR HIRE
Alternative Dispute Resolution (ADR) schemes could play an important role in handling
the problems arising from cross-border and national disputes, particularly in the event of
small claims. To make out-of-court dispute settlements a really useful and effective
instrument for consumers and citizens in general is nowadays a permanent preoccupation in
the EU and initiatives by Member States in this field are increasing.
Therefore, establishing specific ADR bodies for the vehicle hire sector could be another
useful mechanism for protecting consumers. The need for such a mechanism could be
justified by the complexity of the vehicle hire business, particularly the contracts, which
would require the members of the arbitration body to have a thorough knowledge of the
characteristic mechanisms in this sector. The specialised nature of the arbitration would be
likely to inspire greater confidence in this method of conflict resolution amongst vehicle
hire companies. The result could be that many vehicle hire companies would agree to
submit to the arbitration procedure, if it were voluntary, as is most often the case.
It is worth remembering that the ECC network has always been in favour of ADR schemes
which aim to facilitate fast, cheap and effective solution of consumer disputes, provided
they respect the established principles of independence, transparency, adversarial
procedure, effectiveness, legality and liberty.
Nevertheless, to promote ADR across Europe and to establish clear rules for ADR
procedures, their functioning and independence would be crucial, both in general and in a
particular sector such as vehicle hire. Although years have passed since the publication of
the Green Paper on ADR in civil and commercial law39, the Commission has yet indeed to
deliver any follow-up.
Finally, the Belgian consumer association Test-Achats40 has brought forward similar crossborder proposal related to vehicle hire, as this sector normally includes cross-border
aspects. It would consist of creating an exclusive international arbitration commission,
whose arbitrators and experts would be designated by the countries involved, viz. the
country where the company is based and the country where the sectorial consumer lives.
V. SECTORIAL SOFT LAW
1. Background
Soft law is the name given to alternative ways of regulating business or professional
behaviour in the marketplace. Traditional regulation is linked to the democratic process
through which parliament passes laws which are then enforced through the civil or criminal
39
40
Commission Green Paper on ADR in civil and commercial law, COM (2002) 196 final of 19 April 2002.
Test-Achats, Contrats de location de voiture. Un festival de clauses unfairs!, Budget & Droits, nº 175 p. 37.
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courts. Under soft-law regimes, by contrast, commercial or professional bodies help to
regulate their own markets.
The advantage with traditional regulation is that it applies to everyone. No-one has to
subscribe to it; citizens and businesses must know the law applicable to them. As soft law is
a self-regulatory scheme set up by a trade association, it lacks this advantage and consumers
are understandably sceptical about its effectiveness.
Nevertheless, soft law can be perceived as a quicker, cheaper, more practical and flexible
alternative to legislation.
It may involve a trade organisation making the rules with or without participation from
other stakeholders, or a government body (other than the legislature) establishing rules with
input from the industry and other stakeholders. Monitoring and enforcement may be left to
the usual state bodies or may be carried out by a trade organisation or by a dedicated
independent entity.
Originally, self-regulation was presented by businesses as a way for consumers to better
identify traders who subscribed to codes of practice. To this effect, self-regulation is more
directed towards areas where, as a voluntary activity, a trade organisation sets up a scheme
whereby members promise to adhere to a code, which may often go beyond the
requirements of the law.
More recently, soft law has been promoted as an alternative to regulation by government,
and in many cases soft law is indeed a substitute for traditional regulation. A trade body
often develops a code in anticipation of legislation, and sometimes soft law is tried because
it is difficult to see how traditional regulation can be developed.
Finally, soft-law systems are often developed because of the threat of legislation.
Legislation is needed, but the industry is allowed to try self-regulation first. Developing a
scheme may be delegated to a trade body within a time period imposed by government; if a
scheme cannot be agreed, legislation follows.
Many consumer organisations are often sceptical of self-regulatory schemes, some of which
may appear to be merely cosmetic. Soft law, which sets standards of service, and has
sanctions and redress, can bring benefits to consumers; but to gain public confidence, softlaw schemes must identify and publicise real consumer benefits.
As far as the vehicle hire sector is concerned, can we rely on the industry to put its own
house in order? Highly fragmented markets require more intervention, as do markets where
larger players try to impose their solutions on smaller competitors. The vehicle hire sector
seems to satisfy both criteria, as there is a very large number of enterprises and a vast
difference between big and the small companies. As a result, traditional regulation could
usually be preferred as a better guarantee of effectiveness.
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2. Soft law at EU level
For the same reasons, at EU level, it could be more unlikely that self-regulation in the
vehicle hire sector could achieve a harmonised regime within the Internal Market.
Scepticism about self-regulation being the appropriate way forward to harmonise
information requirement is understandable, especially given the wide range and large
numbers of players involved in vehicle hire across the Internal Market. Traditional
regulation, when it aims to correct distortions or imbalances in the marketplace, is usually
preferred as a better guarantee of effectiveness and EU legislation could therefore to be a
preferable approach.
Moreover, soft law which relies on voluntary self-regulation is less appropriate for crossborder consumer protection, since it is very difficult to develop an EU-wide uniform code
that meets consumer needs and ensures compliance41.
Nevertheless, the EU must continue to develop market instruments as much as possible,
particularly voluntary agreements with the industry and information campaigns to raise
consumer awareness. Whilst they cannot always be a substitute for adopting regulatory
measures designed to correct market inadequacies and to provide proper signals for
consumers when necessary, these instruments can prove highly effective. Working with the
relevant trade associations to agree model terms and establishing rigorous codes of practice
are initiatives that can work in the vehicle hire market sector, as well as others. In this way,
the Commission should promote co-regulation and encourage self-regulation by market
participants, in particular with ECATRA, the European sectorial association.
3. Codes of conduct
As one of the forms of soft law, codes of conduct set out the general principles by which the
members of a trade organisation should operate, and establishes, by inference, the standards
of behaviour expected from them. In that way, consumers would be ensured proper
standards of quality, service and value, intended to ensure that consumers who obtain hire
service from members have an absolute right to expect and receive the highest levels of the
service offered.
There are different kinds of codes. Unilateral sectorial codes are voluntary, self-imposed
codes of practice adopted by a trade or a profession; negotiated codes are negotiated by an
industry body with government and consumer interests; and trade-association codes can
also be formally approved by a qualified body. While all these forms of unilateral codes are
appropriate, codes negotiated with government agencies, consumers or other stakeholders
will always enjoy greater legitimacy and credibility.
Regarding vehicle hire, sectorial codes of conduct would have to ensure above all that
companies promote their prices transparently and that their terms and conditions are clear
and unambiguous.
41
See for example the unsatisfactory experience of the EU-wide Code of Conduct on Home Loans published
by the European Commission as the Recommendation 2001/193/EC of 1 March 2001 on pre-contractual
information to be given to consumers by lenders offering home loans.
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In the event of a complaint, the associations could require members to operate a customercomplaint procedure aimed at ensuring that complaints are handled promptly and
efficiently, with a conciliation service available to resolve any disputes.
4. Standard contracts
In some EU countries, such as Belgium, consumer organisations negotiate standard-form
contracts with trade associations, and a separate independent redress scheme is established
which creates a code to deal with breaches. At national level, establishing concerted
standard contracts regarding the vehicle hire sector could be another effective option to be
promoted.
At EU level, in the 2003 Action Plan42, the Commission agreed to examine whether it could
promote the development by private parties of EU-wide Standard Terms and Conditions, in
particular by hosting a website on which market participants could exchange relevant
information. After careful examination, the Commission considered that it was not
appropriate to host such a website.
Nevertheless, the development of EU-wide standard terms and conditions is clearly
something that should be welcomed, although experience with the development of soft law
at European level to date has not been encouraging. Some countries do have experience of
consumer groups negotiating standard-form contracts, but for this to be extended to
European level we feel the Commission would have to be more proactive by targeting, in
this case, the vehicle hire sector and encouraging discussions with ECATRA. There is also
a need for supervision to ensure standard-form contracts are in accordance with the law and
best practice.
5. Sectorial redress schemes
Fully fledged sectorial-level agreements between professional organisations and consumer
authorities or organisations can also establish systems for resolving disputes over standardform contracts or others. Indeed, a genuine sector-specific complaints scheme can be put in
place to handle disputes concerning the conclusion and performance of consumer contracts
in vehicle hire.
These schemes would require clear, accessible and well-publicised complaint procedures to
deal with alleged breaches of the code. Codes of conduct should contain, for example,
requirements that members have formal internal complaints practices and that complaints
are dealt with speedily and fairly.
When consumers present cases for adjudication, they will be more likely to trust the
outcome if the system is independent from the trade. Whether the redress schemes is
independent from the sector or not, it would have to publish an annual report on the action
taken, as well as case reports on decisions made in redress schemes. Finally, another
requirement is that consumers should be informed about the existence of the scheme.
42
Communication from the Commission Action Plan on European Contract Law, COM (2003) 68 final.
68
_______________________________________________________________________________________________
VI. INFORMATION AND EDUCATION CAMPAIGNS
Providing more information about the problems that can occur in the vehicle hire sector is
not enough in itself. Nevertheless, consumer public administration, consumer organisations
and trade associations should make an effort in this respect, as this would undoubtedly raise
consumer awareness.
In particular, it would be appropriate to aim this information at familiarising consumers
with the different terms used in contracts and the different insurance mechanisms.
Moreover, providing basic tips for hiring a vehicle, as contained in the sample annexed to
this report43, could constitute another possible basis for information campaigns, which
should be reinforced during the summer.
It would be a good idea to involve the different travel intermediaries who consumers may
have contact with before hiring a vehicle, such as travel agencies and hotels, for example.
It is important to stress the role airlines could play here, as consumers often hire cars at the
same time they buy a plane ticket, since there are many commercial agreements between
companies of both sectors. Airport terminals and railway stations would be suitable places
to provide this kind of information, as they are home to a large number of vehicle hire
offices.
VII. PUBLIC CONSULTATION BY THE EUROPEAN COMMISSION
The European Commission issues many policy-defining documents, such as White Papers,
Action Plans and Communications.
As far as the vehicle hire sector is concerned, an appropriate course of action could be for
the Commission to issue a Green Paper to stimulate debate and launch a process of
consultation on this specific policy area at European level.
In a similar way to the recent public consultation on coach passenger rights44 within the
Interactive Policy Making initiative45, this Green Paper would launch direct dialogue and
discussion among all the parties involved: police authorities across the European Member
States, consumer organisations, sectorial associations and consumer redress bodies. In this
way, they would all be able to contribute in various ways to solving the vehicle hire
problems in Europe, especially by discussing improvements in the general terms and
conditions used in contracts.
After the consultation process, the Commission could propose a course of action to see if
there is a clear business case for Commission intervention in the EU car rental market.
43
See Annex 1.
Commission Staff Working Paper Rights of passengers in international bus and coach transport,
Directorate General for Energy and Transport, 14 July 2005.
45
See http://europa.eu.int/yourvoice/
44
69
_______________________________________________________________________________________________
ANNEXES
70
_______________________________________________________________________________________________
ANNEXES
Annex 1
Advice on car rental
Annex 2
Example of damage list charges
Annex 3
BVRLA Standard Contract
Annex 4
BVRLA Terms & Conditions
Annex 5
BVRLA Complaint Form
Annex 6
Art. 27 Draft for a Directive on
Payment Services
Annex 7
Contact details of the ECCs
71
_______________________________________________________________________________________________
Annex 1
Advice on car rental
72
_______________________________________________________________________________________________
ADVICE ON CAR RENTAL
Before signing the contract or if the vehicle is rented through a distance method:
1. It is advisable to take a few minutes to read the contract and to ask for an
explanation of the aspects of the contract that you do not understand. Keep
a copy of the contract.
2. At the time of contracting a vehicle it is important to book in advance in order
to get more competitive rates.
3. It is advisable to check carefully the price per renting day and the type and
the price of the insurance, as it can differ considerably from one company to
another. If you pay in cash do not forget to ask for the receipt.
4. It is advisable to pay special attention to the part of the contract related to
the coverage of the insurance and to determine if the company offers the
whole coverage desired. Try not to drive on roads that can involve a risk for
the vehicle (mountain trails, river crossings, etc.) because in the event of an
accident, it would be excluded of the insurance coverage. The deposit
(Insurances excess) is the maximum amount you will have to pay in case of
damages occurred during the rental period. If the cost of the repair exceeds
the deposit, it is to be paid by the renting company. If you wish to deduct the
amount of the deposit you can contract complementary insurances. Check if
the insurance excludes coverage of any damages. Some personal or credit
car insurance policies already cover the damages that may be caused to the
rented vehicle; Read it carefully and you will avoid paying twice for the
damages.
5. If you are planning to travel out of the country where you rented the vehicle,
make sure the contract allows you to do so and check if the insurance policy
includes the country you are planning to visit.
6. If it is necessary, ask for information about the additional costs such as,
taxes, location service charges, infant seats, second driver, exceeding the
limit of kilometres allowed, etc. As a general rule, any variation of the
contract implies the payment of a complementary rate.
7. It is very important that you revise the vehicle with a member of the
company’s staff at the time of receiving it and to specify in the contract any
damages that you may find or even filming or taking a picture of them.
Check carefully the car panels, the lights and the upholstery.
73
_______________________________________________________________________________________________
8. It is advisable to ask for information about the company fuel policy. Most of
the companies rent their vehicles with the tank full. If you are not going to
return the car with the tank full, ask for the price per litre, which will be higher
than the market price. If you fill in the tank before returning the vehicle, keep
the ticket.
9. It is advisable to ask for information about the office opening hours and try to
return the vehicle during these hours, as you will be responsible for any
damages caused to the vehicle if not returned during the office opening
hours.
10. If you suffer an accident, or if the car is damaged while you are using it, go
to a garage and ask for an estimate of the repairing cost. Do not allow the
garage to repair the car.
11. It is advisable to take enough time to return the car and insist upon the
rental company to revise it. Both parties have to reach an agreement
regarding the return conditions and it shall be written down and signed in the
contract and all the copies of it. This way, we will avoid being held
responsible for damages on the car that we have not caused. If you find any
big blanks in the contract form, cross them out so that the company cannot
add anything else afterwards.
12. If the company asks for the blank signature of a receipt of your credit card
as a payment warranty, ask the company to give it back to you once you
have reached the agreement that the vehicle has been returned to the
company in the conditions agreed and tear it out immediately, unless it is
made on account of the price.
74
_______________________________________________________________________________________________
Annex 2
Example of damage list charges
75
_______________________________________________________________________________________________
A company offering a hire service displays its damage policy on its website and includes
the following list, although it indicates which of these damages are not covered by
comprehensive cover:
CATEGORY 1.- €100 will be charged.
•
Puncture, cut or dent to the side of a wheel.
•
Missing tyre.
•
Damaged (unrepairable) or missing metal wheel rim.
•
Glass in wing mirror or rearview mirror broken or missing.
•
Hubcap broken or missing.
•
Burns or damage to the interior upholstery
•
The interior of the vehicle requires professional cleaning.
•
Warning triangle, reflective jacket or tools missing.
•
Side glass broken or missing.
•
Dent in bodywork (less than 10 cm in diameter) which does not break the paintwork.
•
Scratch (more than 5 cm) which breaks the paintwork.
•
Windscreen with repairable chip (without replacement).
•
Vehicle adhesives missing or damaged - not labelling.
•
Alloy wheel rim damaged or missing.
•
Front headlight broken or missing.
•
Rear light broken or missing.
•
Bumper broken (without need for replacement).
•
Dent in bodywork which breaks the paintwork.
•
Windscreen broken, scratched or chipped, requiring replacement.
•
Rear window broken.
•
Multiple Category 1 points.
•
Ski-rack or baby seat missing or damaged.
•
Labelling removed, missing or damaged.
•
Impact on any body panel.
•
•
Impact on more than one body panel.
•
Structural damage to the vehicle.
•
•
Tank filled up with wrong fuel
•
Repair of puncture with wrong screws.
•
Damage on underside
76
_______________________________________________________________________________________________
Annex 3
BVRLA Standard Contract
77
Rental Agreement
You are responsible for any restoration charges
and loss of income if the vehicle is seized by
Customs and Excise or Immigration Authorities.
You must not use the vehicle outside England,
Scotland or Wales without written permission.
Rental company
Damage Diagram
X = Dent
O = Scratch
Tools
Out
You are responsible for any damage to the vehicle
by striking overhanging objects.
Out
In
In
Other Equipment
Out
In
Spare Wheel
Out
In
Inside _________________Inside _________________
Date
Rental agreement
and invoice number
Source
Vehicle
registration number
Your name
(In full)
Address and postcode
Contact or employer’s address and postcode
Make
Model
Time
Out
In
Date
Group charged
Group
Time
Time
Due
back
Date
Date
Due back to
Phone
Phone
1
Miles or
Kilometres
Identification
Credit or cheque card number
2 Driven
Driver licence number
Authorisation
Code
Issued by
Expiry date
Issue date
Date of birth
Amount
Order number or voucher details
Other driver
In
£
3
Miles at
4
Days at
5
Weeks at £
6
Extra days at £
7
Hours at £
8
9
Date of birth
Offence
code
Date of
conviction
Date of
offence
refuse to pay the extra daily rate to limit what you will have to
pay to the responsibility amount shown.
No
Yes
Daily rate £
Responsibility amount £
Amount own
damage
Third party
13 Collection charge
14
15 Rental charges
17 Theft waiver at £
Theft waiver
18
By putting your initial in the relevant box below you agree or
refuse to pay the extra daily rate indicated to limit what you
will have to pay to the responsibility amount shown.
Yes
No
Daily rate £
Responsibility amount £
19 Refuelling service charge
20 Vatable total
21 VAT at
%
22 Sub total
Personal accident insurance, Personal belongings
insurance and goods in transit insurance
Number
12 Delivery charge
16 Collision and loss damage waiver at £
Fine
Have you had any accidents or made any claims
in the past 36 months?
If Yes, fill in the panel
Sub-total
11 Sub-total rental
Our insurance and damage protection programme
Collision and loss damage waiver
Insurance proposal
Fill this in only if you are using our insurance
Have you had a proposal turned down, a policy
cancelled or renewal refused or had to pay an
increased premium or had special conditions
put on you by any motor insurance company?
If Yes, fill in a separate form
Do you have any physical or mental disability or
infirmity, or suffer from diabetes, fits or any
heart complaint?
If Yes, fill in a separate form
Have you been convicted of any motoring offence during
the last five years, or had your licence suspended during
the last ten years, or are you waiting to be prosecuted?
If Yes, fill in the panel
£
10 Less
Issued by
Expiry date
Issue date
p
p
Litres @ £
(Name in full)
Driver licence number
Rental
rates and
charges
refuse to pay the extra daily rate indicated to limit what you
will have to pay to the excess shown.
Outstanding
claim
Yes
No
Daily rate £
£ excess
Yes
No
Daily rate £
£ excess
Yes
No
Daily rate £
£ excess
PAI
23 Insurance Personal accident at £
24
Personal belongings at £
25
Goods in transit at £
26
27 Amount due
28 Less deposits
Insurance Cover from
to
As far as I know the information in this proposal is correct
and complete. I have not withheld any information which
might affect your decision to accept this proposal.
PBI
29 Receipt number
Amount
GTI
Your signature
Your own insurance Fill this in only if using your own insurance
Insurance company_______________Policy number_____________Cover note number________________
Cover note ends________________Date______________Time_________Policy excess(es) £___________
I confirm my motor insurance policy will be in force on this vehicle throughout the rental period.
30 Amount due to you or the rental company
Your signature_________________________________________________________________________________________
Tax point (date)
Your use of the vehicle
It is important that you have read and understand the terms and conditions that will
apply to this contract before signing. Only sign this agreement if you wish to be bound
by the terms and conditions over the page and if you confirm that if you pay by credit
or charge card, your signature is authority to take the total amount you owe.
I agree that the vehicle is not to be taken outside England, Scotland or Wales.
Your signature
I agree that you have given your permission to use the vehicle outside England, Scotland or Wales and that I have received the Travelling Abroad document/vehicle check card.
Your signature
Signed
Renter’s signature ____________________________________________
Personal information
Statement of liability
I understand that the rental company will keep the personal information on this form as
part of their records to maintain and improve the management of their car rental
business. This may include sharing the information with related companies within or
outside Europe. I may see the information at any time to make sure it is up to date. I
confirm I agree to using this information in this way.
I agree that while the rental agreement is in force I will be liable as owner of
the vehicle, or any replacement vehicle, for any fixed penalty offence or parking
charge for that vehicle under s66 Road Traffic Offenders Act 1988 and
Schedule 6 Road Traffic Act 1991.
Renter’s signature___________________________________
Renter’s signature
Please initial here if you do not agree to
your personal information being used for
marketing purposes.
Agreement prepared by
Top copy: to be retained by rental company
Received by you or the rental company
3708
Date ______________________
Clarity
approved by
Plain English Campaign
Agreement ended by
Copyright BVRLA November 1998. This form may only be issued by BVRLA Members.
_______________________________________________________________________________________________
Annex 4
BVRLA Terms & Conditions
79
BVRLA Rental Agreement Terms and Conditions
Version January 2003
BVRLA Rental Agreement and Terms & Conditions of Rental
Member's Obligations
You agree that you will only use information produced by the BVRLA in accordance with these Terms and
Conditions and those set out in the Conditions of Membership.
You represent, warrant and undertake that you will not do anything or cause or permit anything to be done that
may infringe, damage or endanger any intellectual property rights of BVRLA or any third party or do anything
that is otherwise unlawful.
Acceptable Use
In particular:
You agree that any material, software, data and content of any information provided by BVRLA is for use by
the locations specified in your Membership only.
Employees at these locations may not use the material for commercial purposes or cause to be distributed
commercially without the prior written permission of the BVRLA.
Intellectual Property or Proprietary Rights
All content, software, data and publication produced by the BVRLA is the property of BVRLA and/or its
suppliers.
None of the publication, software, data or contents relating to information issued by the BVRLA may be
reproduced, republished, distributed, posted, sold, transferred, linked to or modified without the prior express
written permission of BVRLA.
In addition, the trade marks, logos and service marks displayed by the BVRLA may not be used without the
BVRLA's prior express written permission.
All copyright, database rights, and other intellectual property rights in the materials or contents relating to
information produced by the BVRLA (unless licensed to BVRLA) be owned by and vested absolutely in the
BVRLA.
The BVRLA works closely with the Office of Fair Trading to ensure that the industry standard rental agreement
reflects the most up-to-date legislation. In its quarterly publication in 2002, the OFT cited the BVRLA rental
agreement as a model standard in both clarity and intelligibility.
The BVRLA rental agreement has also attained the crystal mark awarded by the Plain English Campaign.
Only Members of the BVRLA may use the BVRLA standard rental agreement and 6-part NCR stationery sets are
available to Members who wish to purchase them. For more information contact Nora Leggett at the BVRLA, tel
no. 01494 545713 or email, [email protected].
British Vehicle Rental and Leasing Association recommended rental agreement, copyright of BVRLA. Only
members of BVRLA may use it. You must not copy all or part of this agreement without our permission.
Our address is River Lodge, Badminton Court, Amersham, Buckinghamshire HP7 0DD. Phone: 01494
434747 Fax: 01494 434499 e-mail: [email protected]: web address www.bvrla.co.uk
1
1
Your contract with us
When you sign the form over the page you accept the conditions set out in this rental agreement.
Please read this agreement carefully. If there is anything you do not understand or do not agree with, please ask
any member of staff at the place you rented the vehicle from.
2
Rental period
You will have the vehicle for the rental period shown in the agreement. We may agree to extend this rental period
but the rental period may never be more than 30 days.
If you do not bring the vehicle back on time you are breaking the conditions of this agreement. We can charge you
for every day or part-day you have the vehicle after you should have returned it to us. Until we get the vehicle back
we will charge you the daily rate published at the place you have rented the vehicle from.
3
Your responsibilities
a
You must look after the vehicle and the keys to the vehicle. You must always lock the vehicle when you
are not using it, and use any security device fitted to or supplied with the vehicle. You must always
protect the vehicle against bad weather which can cause damage. You must make sure that you use the
correct fuel.
b
You are responsible for any damage to the vehicle caused by hitting low-level objects, such as bridges or
low branches.
c
You must not sell, rent or dispose of the vehicle or any of its parts. You must not give anyone any legal
rights over the vehicle.
d
You must not let anyone work on the vehicle without our permission. If we do give you permission, we
will only give you a refund if you have a receipt for the work.
e
You must let us know as soon as you become aware of a fault in the vehicle.
f
You must bring the vehicle back to the place we agreed, during the opening hours displayed at that place.
One of our staff must see the vehicle to check that it is in good condition. If we have agreed that you
may return the vehicle outside business hours, you will remain responsible for the vehicle and its
condition until it is reinspected by a member of staff.
g
You will have to pay for reasonable costs of repair if:
h
•
we have to pay extra costs to return the vehicle to its condition when the pre-rental inspection
was carried out (for example, if extra valeting time or special material or equipment is needed
to restore the vehicle to its pre-rental condition); or
•
you have damaged the inside of the vehicle.
Before you bring back the vehicle you must check that you have not left any personal belongings in the
vehicle.
2
4
Our responsibilities
We have maintained the vehicle to at least the manufacturer's recommended standard. We assure you that the
vehicle is roadworthy and suitable for renting at the start of the rental period. Also, if you are not renting the vehicle
for business purposes, we are responsible for loss caused by:
•
•
•
•
the vehicle not matching our description of it;
the vehicle not being of the quality that you would be entitled to expect from a rental vehicle;
the vehicle not being fit to drive; or
us not having the legal right to rent out the vehicle.
We are responsible if someone is injured or dies as a result of our negligence, act or failure to act. We are also
responsible for losses you suffer as a result of us breaking this agreement if the losses are a foreseeable
consequence of us breaking the agreement. Losses are foreseeable where they could be contemplated by you
and us at the time the vehicle is rented. We are not responsible for indirect losses which happen as a side effect
of the main loss or damage and which are not foreseeable by you and us (such as loss of profits or loss of
opportunity).
5
Property
We are only responsible for loss or damage to property left in the vehicle if the loss or damage results from our
negligence or a breach of contract.
6
Conditions for using the vehicle
The vehicle must only be driven by you and any other driver named over the page, or by anyone else we authorise
in writing. Anyone driving the vehicle must have a full valid driving licence.
You or any other authorised driver must not:
•
use the vehicle for hire or reward;
•
use the vehicle for any illegal purpose;
•
use the vehicle for racing, pacemaking, testing the vehicle's reliability and speed or teaching someone to drive;
•
use the vehicle while under the influence of alcohol or drugs;
•
drive the vehicle outside England, Scotland and Wales, unless we have given you written permission;
•
load the vehicle beyond the manufacturer’s maximum weight recommendations and make sure that the load is
secured safely;
•
if the vehicle is a commercial vehicle, use it for a purpose for which you need an operator's licence if you do not
have one.
3
7
Towing
You or any other authorised driver must not use the vehicle for towing unless we have given you written
permission.
8
Charges
We work out our charges using our current price list, as published over the page.
You will pay the following charges.
a
The rental and any other charges we work out according to this agreement.
b
Any charge for loss or damage resulting from you not keeping to condition 3.
c
A refuelling service charge if you have used, and not replaced, the quantity of fuel that we supplied at the
start of the original rental . The charge will be based on the rates printed on this rental agreement or at
the place you rented the vehicle from (or both).
d
All fines and court costs for parking, traffic or other offences (including any costs which arise if the vehicle
is clamped). You must pay the appropriate authority any fines and costs if and when the authority
demands this payment. If you do not, you will be responsible to pay our reasonable administration
charges which arise when we deal with these matters.
e
The reasonable cost of repairing any extra damage which was not noted on our damage control diagram
over the page at the start of the agreement, whether you were at fault or not (depending on 4). And the
reasonable cost of replacing the vehicle if it is stolen, depending on any insurance you have (as set out in
8), if and when we demand this payment.
f
A loss-of-income charge, when we demand it, if we cannot rent out the vehicle because it needs to be
repaired, it is a write-off (can't be repaired) or it has been stolen and we are waiting to receive full
payment of the vehicle's value.
We will only charge you for loss of income if we can't get back the losses under the Damage Protection
Programme. We will charge you at the published daily rate and we will never charge you for more than
30 days' rental charges. We will always do everything we can to make sure the vehicle is repaired or we
get payment as soon as possible.
g
Any charges arising from Customs and Excise seizing the vehicle, together with a loss-of-income charge
while we cannot rent out the vehicle, if and when we demand this payment.
h
Any published rates for delivering and collecting the vehicle.
i
Interest which we will add every day to any amount you do not pay us on time, at the rate of 4% a year
above the base lending rate of Barclays Bank from time to time.
j
Value added tax and all other taxes on any of the charges listed above, as appropriate.
You are responsible for all charges, even if you have asked someone else to be responsible for them.
You can get details of our Damage Protection Programme from the office you rented the car from.
4
9
Our insurance and damage protection programme
If we arrange separate insurance, we will give you separate information on the insurance cover and any
restrictions which may apply. Otherwise, the conditions of our insurance and damage protection programme will
apply. By putting your initials in the appropriate box over the page you are accepting the conditions of our
insurance and damage protection programme.
a
b
c
We have a legal responsibility to have third party insurance. This provides cover for claims made if you
injure or kill anybody, or damage their property (cover for damage to property is limited to £250,000).
We will provide cover for loss or damage to the vehicle if you have ticked the box marked ‘Collision and
loss damage waiver’ over the page. If you accept this, you still have to pay an amount up to the
‘responsibility amount’ every time you damage the vehicle.
We will provide cover for theft and damage to the vehicle caused during an attempted theft if you have
ticked the box marked ‘Theft waiver’ over the page. If you accept this, you still have to pay an amount up
to the 'responsibility amount' if the vehicle is stolen.
The responsibility amount you have to pay in each case is shown over the page.
d
We will provide personal accident insurance, personal belongings insurance and goods in transit
insurance if you initialled the appropriate boxes over the page.
You can get details of our insurance and damage protection programme (including the main exclusions) from the
office you rented the car from.
10
Your own insurance
If we fill in the appropriate box over the page you may arrange your own insurance for the full duration of the rental
as long as you can prove that this insurance is valid and have signed the confirmation over the page. We have to
agree to the amount of cover you arrange, the type of policy and the insurer you have chosen.
We must be satisfied with the cover and policy conditions, and you must not change them. We may ask your
insurers to record our name as owners of the vehicle. If the vehicle is damaged or stolen you will let us negotiate
with the insurers about whether the vehicle can be repaired or what compensation is due to us. You are financially
responsible for settling the full claim and paying all costs if the policy you have arranged fails and the vehicle is
damaged, lost or stolen, or a claim as made by any other party.
11
What to do if you have an accident
If you have an accident you must not admit responsibility. You should get the names and addresses of everyone
involved, including witnesses. You should also:
•
•
•
make the vehicle secure;
tell the police straight away if anyone is injured or there is a disagreement over who is responsible; and
call our nearest office straight away.
You must then fill in our accident report form and send it to our address shown over the page.
5
12
Data Protection
You agree that we may use any information you have given us to carry out our own market research. If you break
the agreement we can give this information to credit reference agencies, the Driver and Vehicle Licensing Authority
(DVLA), debt collectors and any other relevant organisation. We can also give this information to the British
Vehicle Rental and Leasing Association (BVRLA), who can pass it on to any of its members for any purpose
shown in the Data Protection Act 1998.
13
Ending the agreement
a
If you are a consumer we will end this agreement straight away if we find out that your belongings have
been taken away from you to pay off your debts, or a receiving order has been made against you. We
may end this agreement if you do not meet the main requirements of this agreement.
b
If you are a company, we will end this agreement straight away if:
•
•
•
•
you go into liquidation;
you call a meeting of creditors;
we find out that your goods have been taken away from you until you pay off your debts; or
you do not meet any of the conditions of this agreement.
c
If we end this agreement it will not affect our right to receive any money we are owed under the conditions
of this agreement. We can also claim reasonable costs from you if you do not meet the main
requirements of this agreement. We can repossess the vehicle (and charge you a reasonable amount)
without using unreasonable force or causing damage.
14
Governing law
This agreement is governed by the laws of the country in which it is signed. Any dispute may be settled in the
courts of that country.
6
_______________________________________________________________________________________________
Annex 5
86
Complaint Against a BVRLA Member
If you have a complaint against a BVRLA Member you must follow that Member’s complaint
procedure before contacting us.
So that we can investigate your complaint speedily and efficiently please fill in the form below and
submit it to the BVRLA. Pressing Tab will take you to the next field.
Your Details (This should be the details of the person who signed the agreement)
Surname
Title
First Name
Address for Correspondence
Daytime Phone Number/
Mobile Number
E-mail Address
Details of the Member you are complaining about
Members Name
Branch/Head Office
Address1
Agreement or
Reservation number or
other reference
When did the problem you are complaining
about happen?
When did you first complain to the Member?
Day
Month
Year
1
Please note the BVRLA has no jurisdiction to deal with complaints against vehicle rentals or leases outside
the UK. Only Rental or Leasing Members operating within the UK are subject to our Code of Conduct and
we are therefore unable to invoke our full conciliation service for such complaints. Nevertheless, where
reservations are made with UK Members, we would wherever possible, assist UK nationals, and would
expect Member companies to offer their comment or observation on the experience abroad.
1
Please click on the boxes to select
Have there been any court proceedings relating to your
complaint or are any court proceedings pending?2
Have you contacted any ombudsman or other complaints body
about your complaint?*
YES
NO
*If you have answered YES to the above question please give details below
Please sum up your complaint for us here
Please tell us more about your complaint
Please use this page to list the main points of your complaint.
Attach copies of relevant correspondence that will assist in setting out the points of your
complaint.
If you need more space, please continue on a separate piece of paper and attach it to this
form.
2
If your complaint has gone to court proceedings stage it has gone beyond any jurisdiction the BVRLA has
and we will be unable to assist you further.
2
How would you like the Member you are complaining about to put the matter right for you?
Your permission for us to go ahead
I would like the British Vehicle Rental and Leasing Association to consider my complaint. I
understand that:
• In the first instance you will try and resolve the complaint through an informal conciliation
procedure, where the BVRLA will request information from the Member involved with regards to
my complaint and, based on my information and the information from the Member, will
comment on the validity of my complaint. (This normally results in the complaint being
resolved.)
• If either party is not happy with the outcome of informal conciliation, a formal conciliation
procedure can be invoked whereby an independent committee of Rental or Leasing Members
will review the complaint and report their findings.
• To help prevention of similar complaints in the future you may publish examples of where
things can go wrong, based on real cases, but without mentioning the identity of anyone
involved.
____________________________________
Signature
Date
__________________
Please return this completed form to:
Rhian Kendall
Legal Services Executive
BVRLA
River Lodge
Badminton Court
Amersham, Bucks
HP7 0DD
Have you…
Included everything you want to
tell us about your complaint?
Enclosed copies of relevant
documents?
E-mail: mailto:[email protected]
Fax: 01494 434499
3
_______________________________________________________________________________________________
Annex 6
Art. 27 European Commission
Document on the draft Directive
on the New Legal Framework
for Payments in the Internal
Market Version 5.0 (26.11.2004)
90
_______________________________________________________________________________________________
Article 27
Refund of a payment transaction
1.
2.
A payer acting in good faith shall have the right to refund of a payment transaction
which he had authorised and which has already been executed if:
–
his authorisation did not include the exact amount of the payment transaction
at the time of its authorisation and,
–
the amount of the executed transaction is, contrary to the payer’s legitimate
expectations.
The right to refund in paragraph 1 shall not apply for currency exchange reasons, if
the reference exchange rate agreed with him according to Article 17, paragraph 3,
letter (i) was applied.
3.
The request for refund shall be introduced at the latest within six weeks of the
payer having been informed about the payment transaction in question by his
payment service provider, but not in any case after three month of the actual
execution of the payment transaction. This request shall include factual
information or elements on the meeting of the conditions in paragraph 1 first and
second indent, if required by the payment service provider in his conditions.
4.
A payment service provider shall be free to grant more favourable refund rights to
payers.
5.
After the payer has exercised his right to refund in accordance with paragraph 1
the payment service provider shall within 10 days either refund the payer for the
full amount of the payment transaction or provide justification for refusing the
refund. No fees shall be due for successful claims for refund.
6.
The payment service provider of the payer shall be free to agree with a payee or
the payee’s payment service provider conditions concerning the reclaiming of
amounts reimbursed to a payer, as a consequence of a payment order, refunded in
accordance with the procedure in this Article.
91
_______________________________________________________________________________________________
Annex 7
92
_______________________________________________________________________________________________
AUSTRIA
Europäische Verbraucherberatung
Mariahilfer Straße 81
1060 Wien
[email protected]
www.europakonsument.at
BELGIUM
Europees Centrum Voor de Consument
Centre Européen des Consommateurs
Ridderstraat 18 Rue des Chevaliers
1050 Brussels
[email protected]
www.cec-ecc.be - www.evz.be
CYPRUS
European Consumer Centre
c/o Competition and Consumers Protection
Service (CCPS)
6, Andreas Araouzos
1421 Nicosia
[email protected]
CZECH REPUBLIC
European Consumer Centre of the Czech
Republic
Na Frantisku 32
110 15 Prague 1
[email protected]
www.mpo.cz
DENMARK
Forbruger Europa
Amagerfaelledvej 56
2300 Copenhagen S
[email protected]
www.forbrugereuropa.dk
ESTONIA
European Consumer Centre of Estonia
Kiriku 4
15071 Tallinn
[email protected]
www.consumer.ee
FINLAND
European Consumer Centre of Finland
c/o Finnish Consumer Agency
Haapaniemenkatu 4 A
Box 5
00531 Helsinki
[email protected]
www.kuluttajavirasto.fi/ecc
FRANCE
Centre Européen des Consommateurs
c/o Euro-Info-Verbraucher e.V.
Rehfusplatz 11
D-77694 Kehl
[email protected]
www.euroinfo-kehl.com
GERMANY
Europäisches Verbraucherzentrum (Evz)
Düsseldorf (coordination office)
Mintropstraße 27
40215 Düsseldorf
[email protected]
www.evz.de
Gronau
Enscheder Straße 362
48599 Gronau
[email protected]
www.evz.de
Kiel
Willestraße 4-6
24103 Kiel
[email protected]
www.evz.de
Kehl
Euro-Info-Verbraucher e.V.
Rehfusplatz 11
77694 Kehl
[email protected]
www.eej-net.de
GREECE
European Consumer Centre of Greece
c/o Hellenic Ministry of Development
Kanigos Square
10181 Athens
[email protected]
www.efpolis.gr
ICELAND
NEYTENDASAMTÖKIN
Siðumúli 13
108 Reykjavik
[email protected]
www.ns.is
IRELAND
European Consumer Centre Dublin
13a Upper O’Connell Street
Dublin 1
[email protected]
www.eccdublin.ie
93
_______________________________________________________________________________________________
ITALY
Centro Europeo Consumatori
Europäisches Verbraucherzentrum
Via Brennero 3
39100 Bolzano/Bozen
[email protected]
www.euroconsumatori.org
LATVIA
European Consumer Centre of Lativa
c/o Consumer Rights Protection Centre
Elizabetes 41/43
1010 Riga
[email protected]
www.ptac.gov.lv
LITHUANIA
European Consumer Centre of Lithuania
Europos vartotojų centras
J. Basanavičiaus 20-11
03224 Vilnius
[email protected]
www.ecc.lt
LUXEMBOURG
Centre Européen Des Consommateurs-Gie
55 rue des Bruyères
1274 Howald
[email protected]
www.euroguichet.lu
THE NETHERLANDS
Stichting Consumenten Informatie Punt
Bordewijklaan 46
2591 XR The Hague
[email protected]
www.consumenteninformatiepunt.nl
NORWAY
The Consumer Council Of Norway /
Clearing House
Rolf Wickstrømsvei 15
P.O.Box 4594
Nydalen, 0404 Oslo
[email protected]
www.forbrukerportalen.no
MALTA
European Consumer Centre Malta
3A, Old Mint Street
Valletta CMR 02
[email protected]
POLAND
Europejskie Centrum Konsumenckie
Plac Powstańców Warszawy 1
00 950 Warsaw
[email protected]
www.konsument.gov.pl
PORTUGAL
Centro Europeu do Consumidor
Praça Duque de Saldanha, 31-1°
1069-013 Lisboa
[email protected]
www.consumidor.pt/cec/
SPAIN
Centro Europeo del Consumidor
Madrid
Principe de Vergara 54
28006 Madrid
[email protected]
http://cec.consumo-inc.es
Barcelona
Gran Via de Carles III, 105, letra B
08028, Barcelona
[email protected]
Vitoria
Donostia-San Sebastian, 1
01010 Vitoria-Gasteiz
[email protected]
SWEDEN
Konsument Europa
Rosenlundsgatan 9
118 87 Stockholm
[email protected]
www.konsumenteuropa.se
UNITED KINGDOM
European Consumer Centre
PO Box 3308
Wolverhampton, WV10 9ZS
[email protected]
www.euroconsumer.org.uk
94
Centro Europeo del Consumidor de España
Sede de Barcelona
Gran Via Carles III, 105 lletra B
08028 Barcelona
Tel. +34 93 55 66 044
Fax +34 93 411 06 78
[email protected]
http://www.cecbarcelona.org
The European Consumer Centres Network is co-financed by the European Commission

Rent a car in European Union - Europejskie Centrum Konsumenckie

Transcription

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