Europcar Australia Accused of Unfair Contracts

The Australian Competition and Consumer Commission (ACCC) has taken action in the Federal Court of Australia against CLA Trading Pty Ltd, known as Europcar Australia.

The ACCC alleges that a number of terms in Europcar’s vehicle rental contracts are unfair, and that Europcar has engaged in misleading or deceptive conduct and made false or misleading representations regarding the liability cover provided to car hire customers.

In Australia, Europcar has around 125 offices and a rental fleet that includes passenger vehicles, trucks and specialty vehicles.

According to the ACCC, the following terms in Europcar’s standard vehicle rental contract are unfair and should be declared void:

• Terms requiring consumers to pay Europcar a “Damage Liability Fee" (currently up to $3,650) if the rental vehicle is damaged or stolen or if there is third party loss — irrespective of fault.
• Terms making the consumer fully liable to Europcar if the rental vehicle is damaged or stolen, or if there is third party loss, where a consumer breaches the rental contract — no matter how trivial the breach and regardless of whether the breach caused the damage or loss.

Additionally, the ACCC alleges that Europcar engaged in misleading or deceptive conduct and made false or misleading representations on its website (www.europcar.com.au), regarding the maximum amount that a customer would be liable for if there was loss or damage to the rental vehicle or third party loss. These representations were misleading because in addition to the amounts specified, a customer would also be liable for loss or damage to an unlimited amount in some circumstances, according to the ACCC.

“Vehicle rental contracts are complex in nature and are often entered into during time-sensitive situations, such as airport departures,” said ACCC Chairman Rod Sims. “Consumers have little time to properly assess their rights and obligations under these rental agreements and no opportunity to negotiate. The ACCC is concerned that Europcar’s standard consumer contracts contain terms that, if applied, impose unlimited liability on consumers in certain situations which the ACCC alleges is unfair.”

The ACCC seeks the following orders:

• Declarations that certain terms in Europcar’s rental contract are unfair and therefore void.
• Declarations, injunctions and pecuniary penalties, orders for the publication of corrective notices and compliance program orders.

There will be a hearing on Feb. 5, 2015, in Perth’s federal court, according to the ACCC.