Prestige hire car companies - Public warning

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17 February 2010
Public warnings

Public Warning issued under S162A of the Fair Trading Act 1999 on Wednesday, 17 February 2010

The Director of Consumer Affairs Victoria has issued a Public Warning notice to consumers about the business practices of certain prestige car hire companies.

The Public Warning notice follows a series of complaints from consumers who allege that a Victorian car hire company has unlawfully retained consumer’s deposits, termed “security bond".

In most cases, the hiring company claimed that the consumer has caused damage to the hire car or has been recorded, by an onboard vehicle tracking system as contravening Victorian Traffic Laws.

Following these claims, the hiring company retained the full amount of the bond money on the basis that consumers had breached their hire contract. 

In other instances the hiring company claimed that consumer had damaged hired vehicles but the hiring company failed when challenged to produce evidence of the cost or fact of repairs being carried out to the vehicle or any loss suffered by the company.

While Consumer Affairs Victoria staff believe the majority of car hire companies operate their businesses lawfully, it is warning consumers to:

  • read rental agreements carefully and look out for clauses that allow the hirer, in certain circumstances, to retain the whole of any agreed security deposit or bond money 
  • ensure that they adhere strictly to local road laws and speed limits at all times 
  • ensure any agreement to pay security deposits or bonds and the circumstances in which they may be forfeited are specified in writing before signing any rental agreement 
  • do not provide credit card details to anyone based on verbal representations about the amount to be debited.

Consumer Affairs Victoria staff are inquiring into the consumer complaints received and the Director of Consumer Affairs Victoria will take appropriate enforcement action should those inquiries reveal contraventions of the Fair Trading Act 1999.

Dr Claire Noone
Director of Consumer Affairs Victoria