PRESS RELEASE

FOR MORE CLEAR AND CONSISTENT CAR RENTAL CONTRACTS - COMMITMENT BY 5 COMPANIES WITH THE EU AND NATIONAL ANTITRUST

Five of the major car rental companies agreed to review their practices towards their consumers, through a joint common action carried out by the European Commission and the National Authority responsible for consumer protection. Citizens will benefit from more clear contractual terms on the insurance cover offered and on fuel policies (return of the vehicle with full/empty fuel tank), more correct procedures for the assessment of damages to vehicles and clearer information on prices. The joint action originated from numerous complaints on car rental companies received by the European Consumer Centres, which increased considerably in the last two years.

Vĕra Jourová, European Commissioner for Justice, Consumers and Gender Equality welcomed today’s agreement: “Booking a car online, renting it in a country and returning it in another is very easy today. Unfortunately, the conditions and contractual terms in the car rental sector sometimes are too vague and lack clarity. Too often consumers are faced with additional costs that were not budgeted. Five major car rental companies have recently agreed to improve their information policies and make their conditions and contractual terms for consumers more correct. I welcome favourably the commitment by these companies and the excellent work done by national authorities for consumer protection in ensuring better conditions for consumers in the car rental sector”.

Car rental companies have undertaken to align the current car rental practice to the requirements of EU rules in matters relating to consumer rights, unfair commercial practices and unfair terms.

Some of the major promised improvements include:

Greater transparency in the process of booking online

• Full information on compulsory expenses and the (costs of) optional services;
• More clear information about the main contractual terms, including the amount of the security deposit blocked on the credit card of the consumer;
• Better information, during the booking process, on the optional insurance coverage and insurance products in general, including information on prices, exclusions and coverage limits;
• More clear information on the so-called fuel policy;
• More correct inspection processes at the return of the vehicle;
• More correct processes for billing consumers for additional post-rental costs: consumers will have a reasonable opportunity to contest the damages found on the vehicle before being billed.

These undertakings will allow the restriction of some drawbacks that occur when renting a car. It often happens, for example, that even for minor damage (under €100) the consumer is made to pay higher costs, in relation to the deposit blocked on the credit card (on average €600). In fact, on returning the car, the car rental operator informs the consumer of the charge of the total amount of the deposit, as provided by the terms and conditions of the contract already accepted.

The commitments are gradually being implemented by the companies and many of these will be fully implemented by the end of 2015.

However, the National Authorities have decided to leave pending some outstanding issues that will be monitored further. In detail, these relate to problems concerning:

• Liability of the consumer caused by third parties;
• Practices of intermediaries and brokers;
• Language in which the contractual terms must be available for the online booking made by consumers in other member states;
• Insurance covers offered by the charterers, even compared to possible alternatives that are available on the market.

Origin of the joint action

The decision to intervene was taken following the increase in consumer complaints about rental services booked in member states other than that of residence – from around 1,050 cases in 2012 to around 1,750 in 2014 – as reported by the European Consumer Centres

A dialogue, co-ordinated by the English Competition and Market Authority (CMA) was opened between the national authorities of the Consumer Protection Cooperation Network and the five main car rental companies operating within the European Union: Avis Budget, Enterprice, EuropCar, Hertz and Sixt. The European trade association Leaseurope, that helped to carry out the action from the end of the companies end, has also agreed to further develop their practice guidelines for the car rental sector. Similar actions were conducted in respect of deceptive sales practices through an online app game (v. IP/14/847) and to improve the rights of consumers in online travel and tourism sites.

Improving information and confidence among consumers in the car rental sector could help to increase the tourism sector annually by 3-4% in the next two years in Europe (see external sector studies). In 2013, there were an estimated 21 million car rental contracts in the European Union. According to the trade association Leaseurope, the companies – forming part of the dialogue – account for more than 65% of these contracts.

The five car rental companies submitted a final version of the proposed commitments that was assessed by the National Authorities. Today, the European Commission and the National Authorities have published their evaluations on the proposals made within the framework of the joint action. This fits in with the initiatives already undertaken by the Antitrust Authority in Italy in the car rental sector and, in particular, in terms of tariff transparency, compulsory equipment and arbitrary charges for damages to cars.

More information is available on the following links:

• Press release by the Competition and Market Authority
• EU Consumer policy - Enforcement
• Annual Report by the European Centre for Consumers

Rome, 13 July 2015