A bankruptcy court judge was set to hear arguments Thursday regarding claims filed by dozens of Hertz customers who say they were falsely arrested — and in some cases jailed — because the company reported the cars they had rented as stolen.
The car rental giant, which recently emerged from bankruptcy, insists virtually all of the claims are "meritless" and says they should not be allowed to proceed for various technical reasons.
One of the claimants, James Tolen, said a surprise traffic stop in Houston late last year turned into a frightening police encounter that made him fear for his life. After completing a project for one of the customers at his renovation company, Tolen was heading home Dec. 23 in a pickup truck rented from Hertz.
He and his fiancée, Krystal Carter, who is also a claimant, say they had rented from Hertz about a dozen times last year — but that didn't prevent him from being stopped by police for driving a car reported stolen by the company. Around 10 p.m. that night, police pulled him over and ordered him out of the car over a loudspeaker, telling him to lift his shirt and back up toward them.
"As I turn around, I see both officers train the guns on me," Tolen told CBS News' Consumer Investigative Correspondent Anna Werner.
"It was just terrifying. It was bad. Actually, I was really thinking that I wasn't gonna make it home," he said.
Tolen said officers handcuffed him, then told him he was driving a stolen car.
"I was like, 'That's impossible. I rent from Hertz. I'm a contractor,'" he recalls telling police.
Tolen begged the officers to look at his rental contract, in which he says he was listed as an authorized driver. He says after seeing the document, one of the officers called Hertz and told the company it needed to get a better system.
Carter and Tolen say they later found out the car rented had been reported stolen by Hertz three months earlier.
"I was hot. Hot," Carter said. "Like, we rented several times from them that year. Several."
Tolen and Carter are two of 165 Hertz customers nationwide who have claims pending in bankruptcy court. The claims have been on hold through completion of the company's bankruptcy case.
Hertz declined to do an interview but issued a statement saying that it "cares deeply about our customers, and we successfully provide rental vehicles for tens of millions of travelers each year.
"Unfortunately, in the legal matters being discussed, the attorneys have a track record of making baseless claims that blatantly misrepresent the facts," the company said. "The vast majority of these cases involve renters who were many weeks or even months overdue returning vehicles and who stopped communicating with us well beyond the scheduled due date. Situations where vehicles are reported to the authorities are very rare and happen only after exhaustive attempts to reach the customer."
As to pulling back police reports once payment is made or the vehicle is returned, Hertz told The Philadelphia Inquirer last year that the reports were valid when they were filed and that "it's up to law enforcement to decide what to do with the case."
Another claimant is Philadelphia-area contractor John Ayoub, who rented a truck from Hertz in April 2019. He said he told Hertz agents it would be a long-term rental and was told to call each week to extend it, which he says he did.
"I would call. I would extend. They would charge it. I would see it. And they would say, 'You're good to go till next Monday,'" he told CBS News.
But on May 28, Hertz filed a theft report, just four days after putting through a charge of $2,300, according to court documents. And even though the $2,300 showed as paid in Ayoub's bank account the next day, Hertz didn't pull that police report back, he said.
On June 2, he was arrested right in front of his house and was charged with a felony.
"Everything turned into a mess, just disaster," he said.
After learning Ayoub had paid for the car, his lawyer says, prosecutors dropped the charges.
In its defense, Hertz also claimed the attorneys representing the claimants "have a track record of making baseless claims that blatantly misrepresent the facts."
In response to Hertz' allegations of misrepresentation of facts by the opposing side, claimants' attorney Francis Alexander Malofiy said it is Hertz "trying to hide" what he calls "a corporate disaster."
"They've been aware of this for years, and instead of doing the right thing and addressing it, they're trying to sweep this under the rug, even through bankruptcy," essentially turning legitimate renters into criminals, he said.
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