Eric Schneiderman for Attorney General

New York AG: Zipcar Charged Damage Fees Without Giving Drivers A Chance To Dispute

August 2, 2016

As published on the Consumerist on July 28, 2016.

With Zipcar, members can rent a car for a few hours without having to stand in line, fill out paperwork, or wait for the car to be brought around. Problem is, when a Zipcar gets damaged, it can difficult to say who’s to blame. Nevertheless, the New York Attorney General’s office says Zipcar was routinely charging drivers for damage fees that violated state law.

New York law says that car rental customers must be given the chance to dispute damage fees before they are assessed, but an investigation by the office of Attorney General Eric Schneiderman claims to have found that Zipcar was hitting members with damage fees before telling them about the suspected damage.

Rather than notify the customer of the alleged damage and give them an opportunity to demonstrate they were not responsible, the AG’s office says that Zipcar would simply make a determination about who was driving the vehicle at the time it was damaged, then charge that member’s account up to $1,000.

Given that many Zipcars in NYC are kept in unmonitored — or minimally monitored — parking lots, where damage could occur at any time, this practice is particularly troubling.

According to Schneiderman, this also isn’t just a handful of incidents. His office says that some 5,000 New York Zipcar members will illegally charged damages fees between 2011 and 2015.

Zipcar has agreed to settle with the NY Attorney General and will refund any damage charges that were assessed against consumers who contested their responsibility for the vehicle damage.

The company will also pay $35,000 in fees and costs to the state, and has agreed to comply with New York law, by not charging damage fees unless the customer affirmatively agrees that they are liable or Zipcar obtains a legal determination of liability.

If you rented a Zipcar in New York state and were charged a damage fee, you may be eligible for a refund if you objected to that fee at the time it was assessed. People who fall into that category can submit a claim online at www.ag.ny.gov/zipcar-inc-refund-program, or call the Attorney General’s office at 212-416-6045 to have a claim form sent to them.

“Consumers should never learn that they have been accused of damaging a rental car when they see a surprise charge on their credit card statement,” said Schneiderman in a statement. “New Yorkers have a right to contest damage fees before any penalties are assessed and my office will continue to enforce the law to ensure that customers are treated fairly.”