That Cheap Car Rental May Be a Fraud

by Msnbctv news staff

The surge in leisure travel as pandemic restrictions lift and a tight supply of rental cars have brought out the criminals this summer, consumer watchdogs say.

The Federal Trade Commission as well as consumer groups and rental companies are warning travelers about schemes that lure them into booking phony reservations through fake customer service numbers and websites.

The problem is that rental car companies have been whipsawed in the pandemic, dealing first with a sudden and extended drop in demand and now with an equally sudden increase in bookings. The result has been higher prices and more challenges in reserving cars during peak times in popular tourist areas. That may leave customers vulnerable to bogus offers that appear to provide the car not only that they want but at a seemingly more reasonable rate, said Emily Wu, a lawyer with the Federal Trade Commission’s division of consumer and business education.

“There’s a lot less availability of rental cars,” Ms. Wu said.

Recent complaints to the AARP Fraud Watch Network and the Better Business Bureau describe similar schemes. In some cases, consumers did not realize they had been duped until they showed up at the rental counter to learn there was no record of their reservation.

The sequence may start when a shopper searches online for a general term like “cheap rental cars,” said Amy Nofziger, director of victim support for the AARP Fraud Watch Network. They call the number that shows up in the search, thinking it belongs to a legitimate rental company, but it turns out to be a fake.

The fake rental agency typically will insist that the caller reserve by paying with a gift card or prepaid debit card, saying there is a special promotion or discount associated with the card.

Once the caller buys a card and relays its PIN to the bogus agency, the criminal can quickly convert the card to cash, and the consumer is left without the money or a car.

It may be hard to understand why someone would fall for such a trick, but criminals are skilled at playing on people’s emotions, Ms. Nofziger said. People may not have realized that it is costly to rent a car this year and are worried about finding an affordable vehicle and taking their family on vacation.

Complaints on the Better Business Bureau’s website indicate the scams involve both no-name companies and impersonators posing as representatives of brand-name outlets. Reported losses range from $200 to $800.

One of the complaints, from early June, involved a call to a company purporting to be Budget. The consumer paid $280 on a prepaid Visa card. When he couldn’t reach the number again — the line was repeatedly busy — he found and called the actual Budget number and was told that no reservation had been booked and that he should report the fraud to the authorities.

Another complaint, in late May, said a company that the consumer believed to be Alamo had “pretended to rent me a car only to take my money and stop answering the phone.”

“The bottom line is that, always, the car doesn’t exist,” said Claire Rosenzweig, chief executive of the Better Business Bureau serving metropolitan New York.

Enterprise Holdings, which includes the Enterprise, Alamo and National brands, doesn’t consider these cases to be “prevalent” but has had recent reports of “some gift card-related issues,” a spokeswoman for the company, Lisa Martini, said in an email. Enterprise alerted customers about the gift-card scheme in March.

Enterprise accepts prepaid cards as payment only at the end of a rental and will not ask for payment information or card numbers over the phone, Ms. Martini said. Prepaying for a reservation may be an option but is never mandatory.

“A website that requires payment or asks for the purchase of a gift card, and to provide the card number and PIN, should cause alarm,” she said.

Similarly, Hertz “will never ask you for prepaid card details over the phone as these cards are ONLY accepted at time of return,” its website says.

Here are some questions and answers about renting a car this summer:

A demand for prepayment with a gift card or prepaid debit card should be an immediate red flag, Ms. Nofziger said. “No legitimate car rental company will ask you to prepay with a gift card.”

If you are suspicious about a promotion, go directly to the rental company’s official website and find the customer service number. “Call the company directly to make sure the deal is real,” the Better Business Bureau said.

When renting a car, always pay with a credit card if possible, Ms. Wu said. Credit cards offer protections if you are the victim of fraud.

The Federal Trade Commission also offers general tips for car rentals on its website.

If your summer travel plans include a rental car, it’s best not to wait until the last minute. AutoSlash, a rental car discount website, recommends booking now for Fourth of July rentals.

Usually, people reserve a car at the end of trip planning. But this year, travel experts are recommending that consumers research prices and availability and book ground transportation first, or at least at the same time they buy a plane ticket.

You may need to be flexible on the type of car you rent, particularly in popular travel spots. Sedans may be more plentiful than minivans.

Consider renting at locations away from the airport, which are generally cheaper. You may have to take a cab or hail a ride to the rental office, but the savings may be worth the hassle.

Various membership organizations, like AAA and AARP, offer rental car discounts as perks. There’s generally a membership fee, but it may be worth it.

Joining a rental company’s loyalty program may snag you a discount, and can at least help you avoid waiting at the counter. Most basic versions are free to join.

Some companies offer employees a corporate discount even when booking travel for personal use, so it’s worth checking with your employer.

And if all else fails, this just may be the year to drive your own car to your vacation destination.

When the pandemic hit last year, rental car companies faced an abrupt drop-off in bookings. In response, companies sold large swaths of their fleets and ordered fewer new vehicles for 2021.

Now, people feel safer boarding a plane and getting out of town. But the rental companies can’t quickly increase their inventory, in part because a computer chip shortage is delaying vehicle productions. Car manufacturers are concentrating first on supplying the retail market because they make more money on cars sold to consumers.

That means fewer cars than usual are available to rent, as demand booms. “It’s kind of a double whammy for the consumer,” said Neil Abrams, a veteran travel industry consultant. The situation is expected to last into the fall, he said.

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