General Rent-A-Car Systems, Inc

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IN THE MATTER OF GENERAL RENT- CAR SYSTEMS, INC., ET AL.

CONSENT ORDER, ETC. , IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRAUJo COMMISSION ACT Docket C-3255, Complaint, June 1.1 1989-Decision, June 1.1, 1989 This consent order requires, among other things, the Miami, F!a. national car rental company to disclose charges that are mandatory or arc not reasonably avoidable lo every consumer that inquires about the prices and also to disclose to consumers the car models they arc to receive under the car size classification that each consumer selects, Appearances For the Commission: Michael R. MacPhail and Joel C. Winston. For thc respondents: Donald L. Peusner Miami, Fla. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it be said Act, the Federal Trade Commission, having reason to believe that respondents General Rent- Car Systems, Inc. , a corporation, and General Rent- Car Inc. , a corporation, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it would be in the public interest, hereby issues its complaint stating its charges as follows:

PAHAGRAPII 1. Respondent General Rent- Car Systems, Inc. is a corporation organized, existing, and doing business under and by virtue of the law of the State of Florida. Respondent General Rent- Car, Inc. is a corporation organized, existing, and doing business under and by virtue of the law of the State of Delaware. Respondents offices and principal places of business are located at 2741 North 29th Avenue, Hollywood, Florida. Respondent General Rent- Car, Inc. is a wholly-owned subsidiary of respondent General Rent-a-Car Systems, Inc.

PAR. 2. Respondents, at all times mentioned herein, have maintained a substantial course of business. includin!! the acts and . , . ,_. . . .,. u ---- 691 Complaint practices hereinafter set forth, which are in or affecting commerce, as commerce" is defined in the Federal Trade Commission Act. PAR. 3. Respondents advertise, offer for rental, and rent to rental vehicles madeconsumers throughout the United States, available to consumers at numerous rental offices nationwide. Many of respondents' rental offices are located at off-airport sites; an airport surcharge or fee is imposed at certain of these locations when consumers use an airport shutte van for transportation to these sites. PAR. 4. In the course and conduct of their business, in order to induce the rental of their automobiles, respondents have disseminated or caused the dissemination of promotional information, including written advertisements stating that fuel charges wil be assessed, and that airport fees may be assessed at certain locations. Respondents advertisements typieally invite consumers to can a ton-free "800" number to receive further information from their agents and to make reservations.

PAR. 5. In response to consumer inquiries to their ton-free number respondents' agents make statements and representations regarding, among other things, the price of contemplated rentals of their vehicles, and their classification by size subcompact compact " and "intermediate..

PAR. 6. In oral presentations in response to consumer inquiries respondents' agents have, in numerous instances, stated prices for respondents' rental services without disclosing: (a) The existence and amount of a mandatory fuel charge; and (b) The existence and amount of a mandatory airport "surcharge or "fee" imposed on consumers who travel in one of respondents shuttle vehicles from certain airport locations to one of respondents rental offices.

The existence and amounts of these charges and fees would be material to consumers. The failure to disclose these facts, in light of respondents' oral price representations, is an unfair or deceptive act or practice.

, certain PAR. 7. Under respondents' vehicle classification system automobile models classified by the federal government, automobile manufacturers, and other vehicle rental companies as "subcompacts or "compacts" are classified by respondents as "compacts" and intermediates " respectively. In oral presentations in response to consumer inquiries, respondents' agents have, in numerous instances stated prices and accepted reservations for specific vehicle classifica- Decision and Order 111 F.

tions without disclosing what model of automobile consumers wil receive. Because of the vehicle classification system used by respondents, information on the particular model being received would be material to consumers. The failure to disclose this information, in light of respondents' vehicle classification representations, is an unfair or deceptive act or practice.

PAR. 8. The acts and practices of respondents, as herein alleged have constituted, and now constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act.

DJoCISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of the complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint, a statement that the signing of said agreement is for settement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2. 31 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent General Rent- Car Systems, Inc. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Florida. Respondent General Rent- Car, Inc. is a nJ.l\J I:nJ.-.n-vru ""LLHU"" Inv- , ""I .nU. vv. 694 Decision and Order corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware. Respondents' offices and principal places of business are located at 2741 North 29th Avenue Hollywood, Florida. Respondent General Rent- Car, Inc. is a whollyowned subsidiary of respondent General Rent- Car Systems, Inc. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDJoIt For the purposes of this order, all required disclosures shall be made in a clear and conspicuous manner.

It is ordered That respondents General Rent- Car Systems, Inc. a corporation, and General Rent- Car, Inc. , a corporation, their successors and assigns, and their officers, agents, representatives and employees, directly or through any corporation, subsidiary, division, or any other device, in connection with the promotion offering for rental or rental of any vehicle, in or affecting commerce as commerce is defined in the Federal Trade Commission Act, as amended, do forthwith cease and desist from: A. Failing to disclose to consumers, in connection with any discussion or inquiry relating to the price of a contemplated rental, all airport surcharges or fees that are applicable to the contemplated rental or are not reasonably avoidable by consumers. B. Failing to disclose to consumers, in connection with any discussion or inquiry relating to the price of a contemplated rental, all fuel charges that are applicable to the contemplated rental or are not reasonably avoidable by consumers.

C. Failing to disclose to consumers, in connection with any discussion or inquiry relating to the price of a contemplated rental any other charges sought to be imposed in connection with a contemplated rental that are mandatory or that are not reasonably avoidable by consumers.

D. Failing to disclose to consumers, in connection with any discussion or inquiry in which an automobile reservation is made, the automobile model or models that they may receive under the classification rented.

Decision and Order 111 F.

II.

It is further ordered That respondents shall for a period of three (3) years distribute, or cause to be distributed, a copy of this order to all present and future operating divisions, subsidiaries, franchisees dealers, and managerial employees.

It is further ordered That respondents shall notify the Commission at least thirty (30) days prior to any proposed change in either corporation such as a dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation that may affect compliance obligations under this order. Respondents shall require, as a condition precedent to the closing of any sale or other disposition of all or a substantial part of their assets, that the acquiring party file with the Commission, prior to the closing of such sale or other disposition, a written agreement to be bound by the provisions of the order.

IV.

It isfurther ordered That respondents shall, within sixty (60) days after service upon them of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

U.JENA , INC. 699 699 Complaint