“Unconscionable” and “fraudulent” Australian four-wheel-drive rental firm fined $1.2 million
There are multiple effective ways consumers can protect themselves against dodgy rental outlets, according to the ACCC.
An Australian four-wheel-drive vehicle hire business has been ordered to pay fines totalling $1.223 million, after the Federal Court found it had serially breached consumer law and behaved deceptively.
Smart Corporation Pty Ltd – which previously traded as Australian 4WD Hire – consistently engaged in “unconscionable conduct, made false and misleading representations in relation to insurance cover, and included unfair contract terms in its vehicle rental contracts,” according to the Australian Competition and Consumer Commission (ACCC).
The company has since gone into liquidation, but remains liable for fines totalling $870,000.
Meanwhile, former directors Vitali Roesch and Maryna Kosukhina have been barred from managing a company for three years in Australia by the court. They were independently ordered them to pay $179,000 and $174,000 respectively in further penalties.
The Court found that the company's terms were woefully unfair because – among other indiscretions – they permitted deposit deductions for "trivial breaches which could not have caused any loss or damage to the hired vehicle." Prosecutors also allege the former directors engaged in bullying practices and threatened customers who complained about the conditions.
However, this incident is not an isolated one – the prevalence of scams and fraud in the rental industry has increased significantly since the onset of the coronavirus pandemic early last year, according to the ACCC.
A spokesperson for the government’s independent watchdog told CarAdvice: “[The best way consumers can protect themselves] is to shop around and read vehicle hire contracts carefully."
“Before signing anything, inspect inside and outside of the vehicle for damage with a representative from the company and take photos of any existing damage,” the spokesperson continued.
“Ensure any damage you find is recorded in the contract and countersigned by the company representative. Check that all mechanical and electrical components work, and there is a full tank of fuel.
“Further, ask the following questions:
- What is the total cost, including rental, basic and excess insurance cover and all extra costs?
- Are there any restrictions on using insurance if the vehicle is damaged while you’re using it? If so, can you use your own insurance from elsewhere
- Who is permitted to drive the vehicle?
- Are you entitled to a refund if you can return the car early?
- If necessary, can you pick up the vehicle in one location and return at another? Is there an extra cost for this?
- In what circumstances will the hire company make unauthorised charges to your credit card? What amounts could be charged in each circumstance? When will the company refund money you’re entitled to, such as a security deposit?
"[When returning the car], ensure you have done everything you are required to do under the contract – if there was no damage to the vehicle while you were renting it, ask for a written agreement from the company noting that the car was returned undamaged."
"If there was damage to the car during your rental, ensure you make a written agreement with the company about costs and procedures for fixing the damage before you leave the premises.”
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