The ACCC has commenced proceedings in the Western Australian Registry of the Federal Court against CLA Trading, trading as Europcar Australia. The regulator claims Europcar’s vehicle rental contracts contain unfair contract terms, and that the company has engaged in misleading or deceptive conduct in relation to liability cover.

The proceedings allege that Europcar’s standard form consumer vehicle rental contracts contain the following terms which amount to unfair contract terms under the Competition and Consumer Act, and should be declared void:

  • Terms which require consumers to pay a “Damage Liability Fee”, currently up to $3,650, if the rental car is damaged or stolen, or if there is third party loss, irrespective of fault.
  • Terms making the consumer fully liable to Europcar if the rental vehicle is damaged or stolen, or if there is third party loss, in circumstances in which the consumer breaches the contract, no matter how trivial the breach and whether the breach caused the relevant damage or loss.

In a media statement, Europcar has rejected that the Damage Liability Fee is unfair and says it will strenuously oppose any attempt to prevent it charging this fee.

The ACCC has also alleged that Europcar has engaged in misleading or deceptive conduct and made false or misleading representations on its website in relation to the maximum amount that a consumer would be liable for if there was loss or damage to the rental car or third party loss. These representations are said to be misleading because in addition to the amounts disclosed, a customer would also be liable for loss or damage to an unlimited amount in certain circumstances.

Europcar has denied the allegations in its press release. It says that full disclosure of liability is contained on its website.

The action comes on the back of the ACCC’s report last year into unfair contract terms, when the ACCC directly approached a number of businesses to raise its concerns about certain terms in their standard form consumer contracts, and seeking voluntary amendment of those terms. The rental car industry was one clearly in the ACCC’s gunsights.

The matter is first listed on 5 February 2015 for directions.