A 4-wheel-drive car rental company will face court to answer allegations of "unconscionable conduct" against its customers.
The Australian Competition and Consumer Commission has started legal action against Australian 4WD Hire, alleging that its contract terms that charge customers for certain behaviours is unfair.
The contract allegedly penalises customers for driving "at night outside built-up areas, above the speed limit, or when visibility was poor", even without any proof that actual damage occurred.
The company is accused of not returning security deposits (that are in excess of $500) for customers that it deemed to be in violation of those terms. When those customers complained, the rental firm allegedly threatened them with even more fees and referral to authorities.
GPS data from the rental car was used to supposedly prove the driving behaviours.
"Australian 4WD Hire’s alleged treatment of some of its customers was of particular concern to the ACCC and is the basis of our unconscionable conduct claim against the company," said ACCC chair Rod Sims.
Yahoo Finance has contacted Australian 4WD Hire for comment.
The business, which is officially registered as Smart Corporation Pty Ltd, is alleged to have breached Australian consumer law. Fleet Manager Vitali Roesch and director Maryna Kosukhina knowingly involved in the breaches, alleges the ACCC.
The consumer watchdog also accuses the rental firm of misleading customers about how much insurance coverage they had in the case of an accident.
More than half of its vehicles only had third-party property damage, but the business website has said all rentals would have off-road insurance. The customer contract gave the company the right to not lodge insurance claims for single-vehicle incidents and have the renter foot the entire bill.
Yahoo Finance has seen the website still claiming that all vehicles have off-road insurance.
The ACCC is pursuing in the Federal Court declarations, financial penalties, compensation for customers and banning orders against Roesch and Kosukhina.
Australian 4WD Hire operates nationally with its headquarters in Surfers Paradise and branches in Alice Springs, Broome, Cairns and Darwin.
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