[co-author: Stephanie Kozol]*
On August 15, New York Attorney General (AG) Letitia James announced a settlement with Avis Budget Group Inc. (Avis Budget), for allegedly denying car rentals to customers who did not possess a credit card. Under the terms of the settlement, Avis Budget will pay $275,000 in civil penalties, and will update its relevant employee training.
According to New York state law, N.Y. Gen Bus L § 391-L(2), it is unlawful for any individual or entity engaged in the business of renting motor vehicles to “refuse to rent [a] vehicle to any person solely on the requirement of ownership of a credit card.”
After receiving a complaint in 2022, the AG launched an investigation. As part of the investigation, the AG visited and called Avis Budget locations around the state to inquire whether a credit card was mandatory to rent a vehicle. The investigation ultimately found that 74 Avis Car Rental and Budget Rent a Car locations in New York informed customers that leaving a credit card on file was mandatory to rent a car. While most rental car companies allow individuals without a credit card to rent a vehicle by placing a cash deposit or a hold on a debit card, Avis Budget allegedly failed to provide such accommodations.
As part of the settlement, Avis Budget agreed to: (1) pay $275,000; (2) update its employee training to ensure compliance with rental vehicle regulations; and (3) provide compliance reports to the AG’s office.
Why It matters
Avis Budget’s settlement with the AG demonstrates that even a single consumer complaint can cause AGs to launch an investigation, resulting in a costly settlement. Accordingly, businesses should collect and monitor consumer complaint data, and periodically assess current business practices under applicable law.
*Senior Government Relations Manager
