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Vehicle rental firm in court for alleged consumer law breaches

April 23, 2019 Headline News No Comments Email Email

The ACCC has instituted proceedings against a four-wheel drive vehicle rental company, alleging it used unfair contract terms, engaged in unconscionable conduct, and made false or misleading representations in relation to insurance cover, in breach of the Australian Consumer Law (ACL).

The ACCC alleges that, since 2016, Smart Corporation Pty Ltd (trading as Australian 4WD Hire) used standard form contracts which included unfair terms that allowed it to charge customers for a range of driving behaviours which it claimed would cause excessive wear and tear or damage to its vehicles.

These driving behaviours included driving at night outside built-up areas, above the speed limit, or when visibility was poor.  Australian 4WD Hire relied on GPS data to determine whether customers had engaged in these driving behaviours.

“We consider these contract terms are unfair because they allow Australian 4WD Hire to charge customers for purported vehicle damage without having to prove any actual damage occurred,” ACCC Chair Rod Sims said.

“We are seeking to have these terms declared unfair by the Court [Federal Court of Australia] so Australian 4WD Hire can’t enforce them against its customers.”

The ACCC also alleges that Australian 4WD Hire acted unconscionably by enforcing these terms against certain consumers and withholding at least AUD 500 of their security deposits for excessive vehicle wear and tear. When these customers disputed these actions, the company threatened them with further charges and referral to authorities unless they acquiesced.

“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,” Sims said.

It is also alleged that, since 2014, Australian 4WD Hire has represented on its website that all rental vehicles would have the benefit of off-road insurance when in fact more than half of its vehicles were only insured for damage to third-party property. Australian 4WD Hire’s contract also gave it the discretion to not lodge an insurance claim for single vehicle incidents and instead hold customers liable for all costs.

“We allege Australian 4WD Hire gave its customers a false sense of security by representing they would have the benefit of being covered by insurance, in particular for the off-road use of the vehicles, when this was not necessarily the case” Sims said.

The ACCC alleges that Australian 4WD Hire’s Fleet Manager, Vitali Roesch, and director, Maryna Kosukhina were knowingly concerned in the alleged breaches of the Australian Consumer Law.

The ACCC is seeking declarations, pecuniary penalties, compensation for customers, and banning orders against Roesch and Kosukhina.

The ACCC described Australian 4WD Hire is a four-wheel drive vehicle rental company which operates in locations across Australia including Alice Springs, Broome, Cairns, Darwin and the Gold Coast.

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