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Enterprise Holds Up Car-Rental Consumer Protection Bill

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Enterprise rental car that killed Raechel and Jacquie Houck

Enterprise rental car that killed Raechel and Jacquie Houck.

Enterprise Holdings Inc. is holding up legislation that would protect consumers who rent vehicles. The car rental company opposes a bill that would ban companies from renting or selling recalled vehicles until the safety defects in question have been repaired.

Jim Puzzanghera writes in the Los Angeles Times that Senators Barbara Boxer (D-CA) and Charles Schumer (D-NY), introduced the bill, The Raechel and Jacqueline Houck Safe Rental Car Act, last year after the death of two women in a rental car accident.

As he reports:

Raechel Houck, 24, and her sister Jacqueline, 20, rented a Chrysler PT Cruiser from Enterprise in 2004, a month after the company had been notified of a recall for the vehicle because power steering fluid could leak and ignite under the hood.

The Houcks died in a fiery crash. Last year, an Alameda County Superior Court jury ordered Enterprise to pay $15 million to their parents.

Last Monday, Boxer said she wrote to the four leading car rental companies — Hertz Corp., Avis Budget Group Inc., Enterprise Holdings Inc., and Dollar Thrifty Automotive Group Inc. — asking them to voluntarily agree to “this basic commitment to protect consumers,” as Puzzanghera writes.

Hertz already has a policy consistent with the pledge Boxer asked the companies to sign. The pledge says: “Effective immediately, our company is making a permanent commitment to not rent out or sell any vehicles under safety recall until the defect has been remedied.”

Richard Broome, a Hertz spokesman told the Los Angeles Times that Hertz has had a policy since at least 1989 not to rent or sell cars facing recall until they are repaired, and has an agreement with Consumers for Auto Reliability and Safety (CARS), an advocacy group, on federal legislation similar to the Boxer-Schumer bill. “Our hope is the entire industry will come on board because we think this is in our industry’s interests as well as consumers’ interest,” he said.

As Bill Lambrecht reports in a St. Louis Post-Dispatch article appearing in the Chicago Tribune:

Until earlier this year, privately held Enterprise, which owns the National and Alamo rental companies, had insisted that any legislation was unnecessary.

But in February, Enterprise relented after becoming the target of an Internet protest pressing the company to support a regulatory bill in Congress. As of this week, more than 160,000 people had signed the Enterprise Rent-a-Car petition at […]

The company [now] says it has joined with all major rental firms — except Hertz Corp. — in supporting legislation that would, for the first time, give the government authority over rental company policies for recalled autos. […]

Enterprise contends that the legislation it wants is ‘pretty similar’ to a version drafted by consumer groups and — with limited exceptions — would prohibit renting or selling recalled vehicles.

Lambrecht writes that Pamela Gilbert, chief negotiator for the consumer groups supporting the bill, said she is most disturbed at a proposal from Enterprise and its allies that would allow unrepaired, recalled vehicles to be rented if consumers were notified of the defect. She described that provision as a significant change from recall systems for any products.

Enterprise said it would rent a recalled vehicle “to avoid turning away customers who show up at their locations when their desired vehicle is subject to a recall which the manufacturer deems appropriate for disclosure rather than grounding.”

The likely next step, according to Gilbert, is fighting out the issue in Congress. Gilbert, a former executive director of the U.S. Consumer Product Safety Commission, expects a Senate hearing on the matter soon, but, as Lambrecht notes, the likelihood of the bill being approved with the current polarized Congress is small.

Puzzanghera writes that some car rental companies say they should not be forced to take recalled vehicles out of circulation, because consumers who own the same vehicles are allowed to drive them. But Rosemary Shahan, the founder of CARS, said the situations are not the same:

‘If it’s your car, you might ground it. You might decide you’re only going to drive it when you absolutely have to,’ Shahan said. ‘That’s very different from when you go rent a car from a reputable company. We don’t think you should have to worry that they’re knowingly putting you in an unsafe car.’

Image by Consumers for Auto Reliability and Safety, used under Fair Use: Reporting.


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