Europcar is facing an ever growing compensation bill for the scandal for overcharging customers for repairs to their hire cars.
The Daily Telegraph was the first UK newspaper to report the scandal by writing about disclosures from a Europcar manager that staff were paid an extra £4 for spotting damage.
Staff at car hire companies are also expected to sell upgrades and extra insurance for damage to tyres, windscreens, stone chips etc. This is commonplace among car hire companies and anyone who has hired a car will have experienced the hard sell.
It is likely that Europcar are not alone in encouraging staff to spot damage to vehicles. So far, they were expected to have overcharged for repairs by a staggering £30 million. However, the company has recently admitted that this may now be closer to £40 million, £10 million greater than it originally thought.
Europcar has written to it’s suppliers telling them to stop inflating repair costs and to cease paying rebates for the work. In some cases, charges for windscreens were inflated by 300 per cent. The serious fraud office are likely to get involved as some legal experts have said that these charges could be in breach of the Fraud Act 2006 and the Consumer Rights Act 2015.
One of the largest customers of Europcar are Motability, the charity for disabled drivers. Motability have a contract with Europcar, thought to be about £25 million to provide temporary car cover when one of their lease vehicles break down.
The National Association for Body Repairers commented about the practise of incentivising staff to spot damage as a potential conflict of interest and would result in unnecessary repairs being made.
Another car hire giant, Avis, is thought to be next in line for investigation. An Avis spokesman said its charges were inline with repair industry standards.