Hertz Agrees to $168 Million Settlement Over Bogus Stolen-Car Arrests

Image: Fotostand / Gelhot (AP)

After years of accusations and hundreds of wrongful arrests, the saga of Hertz having people arrested over bogus claims of car theft may be coming to an end. The rental company has announced that it has reached a $168 million settlement with 365 people who say they were wrongfully arrested due to Hertz falsely claiming they’d stolen their rental cars.

The settlement is a big win for the hundreds of customers who were arrested over these false claims. Many of the cases had been held up in bankruptcy court, as the rental car company was fighting to keep these cases under the supervision of a bankruptcy judge, a remnant of the company’s bankruptcy filing in 2020. But things started to change this summer. A new general counsel took over for the company, Colleen Batcheler. Rather than draw things out and refuse to settle, Batcheler came into the job and hit the ground running working to settle numerous cases. A subsequent ruling by a federal judge in June 2022 allowed nearly 100 more claims of false arrests to move forward. This all led to the settlement announced today, as first reported by Automotive News.

In a statement, Hertz CEO Stephen Scherr said the settlement shows that Hertz wants to put customers first and move forward: “As I have said since joining Hertz earlier this year, my intention is to lead a company that puts the customer first. In resolving these claims, we are holding ourselves to that objective.”

Hertz says the settlement shouldn’t have any impact on its capital allocation plans for 2022 and 2023 — in other words, the company doesn’t think this $168 million will impact investors’ pockets. And while you may be asking yourself how a company that just recently came out of bankruptcy is supposed to settle an amount this large, the answer is insurance. While Hertz says an aggregate settlement amount will be paid before the year’s end, the company will almost certainly recover a portion of that amount through its insurance carriers.