FTC Rental Car Recall Repair Petition

Immediate Release: August 9, 2010

     Two auto safety advocacy groups, joined by the mother of two girls killed in the crash of a defective vehicle knowingly rented to them by Enterprise Rent-A-Car, today petitioned the Federal Trade Commission to take action to stop Enterprise and its owner company from renting out recalled but unrepaired vehicles to customers.
     Employees of Enterprise Rent-A-Car and its owner, Enterprise Holdings – the company that also owns the National and Alamo car rental businesses – have admitted that the company’s procedures allow them to rent out cars that have been recalled by a manufacturer due to a safety defect but not yet repaired, and to withhold this information from customers. “There is nothing in place that keeps an employee from renting that car… Enterprise’s corporate offices looked the other way regarding this fact,” a company manager has testified.
    The petition, to “remedy Enterprise’s deceptive trade practices,” was filed by the Center for Auto Safety (CAS), Consumers for Auto Reliability and Safety (CARS), and Carol S. Houck. Enterprise Holding is North America’s largest provider of rental vehicles.
     In 2004 Ms. Houck’s daughters, Raechel and Jacqueline, rented a PT Cruiser from Enterprise in California. The vehicle had been recalled for a power steering hose defect that was known to cause an underhood fire, but Enterprise failed to have the defect corrected, and also failed even to inform the two girls about the existence of the defect to give them the choice of not renting the car.
     The car caught fire while traveling on the highway, causing a loss of steering and a head-on collision with a semi-trailer truck. The girls were killed instantly. After five years of litigation, and one month before trial on the merits, Enterprise admitted to 100 percent liability in the two girls’ deaths.  Trial was held on the issue of damages only and in June of this year, a verdict was rendered for $15 million.
     “Justice has not been served,” Ms. Houck said of the verdict. “Justice is making sure this never happens to another family. That’s why the FTC must grant this petition.” Rosemary Shahan, president of CARS, noted that “Enterprise apparently thinks that human life is worth so little, it will put its customers at risk for a mere $30 daily rental fee. FTC urgently needs to put a stop to this practice."
     Clarence Ditlow, CAS’ Executive Director, noted that in 1990, responding to a CAS petition, the FTC entered into a consent order with Budget Rent-A-Car targeting Budget’s failure to disclose to consumers that it was renting defective vehicles that were subject to outstanding recalls and had not been inspected or repaired. “Our petition asks for similar FTC action against Enterprise, but further asks the FTC to stop Enterprise from making claims suggesting that its rental vehicles are safe, such as in ads that use misleading words like ‘well-maintained’ and  ‘security and reliability’ to describe their vehicles.”
     “Not only is it deceptive for Enterprise to fail to disclose its practice of renting out recalled but unrepaired vehicles, it is deceptive of Enterprise to have such a practice in the first place. Only strong FTC enforcement action will stop Enterprise from renting unsafe vehicles to consumers and send a message to all rental car companies to park recalled cars until fixed,” said Ditlow.
     The petition notes that a simple remedy is available and should be adopted by the company:
     “…once Enterprise receives the official notice of the recall, the affected vehicles should be immediately parked until fixed.  This is the same duty that new car dealers have been assigned by the federal Motor Vehicle Safety Act…and is appropriate for Enterprise under the circumstances.  Enterprise has already proved itself capable of living up to this remedy when it publicized in early February 2010 that it had removed from its fleet 83 percent of the affected Toyota vehicles within days of Toyota announcing its intent to recall them for the sticking accelerator problem and before Toyota had provided the official notification letter to owners.” 
     The petition also notes Enterprise can “monitor, through NHTSA and its contacts with manufacturers, the reports of intent to initiate a recall that manufacturers file with NHTSA.”  These reports precede, by weeks or months, the notification letters that go out to owners. “Enterprise can use that time to prepare for the recall and perhaps even to repair the vehicles in question before the recall notice is received.”
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     Copies of the full petition and attachments are available at www.autosafety.org.
     Petitioners may be contacted at the following phone numbers:
·    Clarence Ditlow, CAS:  (202) 328-7700
·    Rosemary Shahan, CARS:  (530) 759-9440
·    Carol Houck:   (805) 479-2545