Watch as car hire firms caught on camera using sneaky tactics to rip off holidaymakers – and signs to watch out for

CAR hire firms have been caught on camera using sneaky tactics to rip off holidaymakers.

An undercover investigation by consumer champion Which? showed how firms use pressure tactics to encourage customers to purchase unnecessary insurance for their holiday at the rental desk.

Alamy

Which? found that some car hire companies used pressure tactics to rip off holidaymakers[/caption]

The investigation was carried out after a recent Which? survey found that travellers face a deluge of issues when hiring cars on holiday.

As many as nine in ten (89%) reported concerns about being taken advantage of at the rental desk, according to the survey.

Insurance pressure selling was described as a particular concern, with one in six (17%) customers saying that they felt under “a lot” of pressure to buy additional insurance at the desk, even if they already had adequate cover.

After travellers raised concerns in the survey, Which? decided to send investigators to Spain – the most popular holiday destination for UK holidaymakers – to look into the issue.

Investigators visited Alicante and Malaga airports and, posing as regular customers, they filmed interactions with three companies Which? was most concerned about based on reviews and complaints.

The companies in question were Goldcar, Dollar and OK Mobility. 

During the undercover operation, Which? found that agents were making untrue statements about car insurance.

This included a desk agent claiming that the customer would need to pay €760 (£654) just for a scratch if they didn’t buy additional coverage.

When hiring a car in Europe, basic insurance – known as a Collision Damage Waiver (CDW) –  is always included in the rental price.

However, since the excess payable can be very expensive, Which? advises travellers to buy an Excess Reimbursement Policy (ERI) to claim back the excess paid – some of the best start from just £16.

As an alternative, car hire firms sell Super Collision Damage Waivers (SCDWs) to waive the excess altogether.

However, these can cost hundreds of pounds more, and generally offer inferior cover.

Car hire companies can make large profits from upselling these SCDW policies to customers.

An industry insider told Which? that car hire staff are often encouraged to sell this extra insurance for a commission.

The undercover operation saw investigators visit car rental desks at airport after pre-booking car hire – which always included basic insurance as standard – online.

The investigators had also purchased a legitimate ERI policy in advance which was flagged to the firms during the exchanges. 

After reading multiple complaints about OK Mobility online, Which?’s undercover shopper was incorrectly told at Alicante Airport that they did not have basic insurance with their booking. 

The agent claimed that “nothing is included” as the booking was made through a third party, Rentalcars.

However, booking through a third party has no impact on the insurance and Rentalcars confirmed that over is included with all European rentals as standard.

The OK Mobility agent also said any damage would cost a fixed rate of €760.

After the investigator showed their ERI policy, they were told again “the insurance has to be with the car hire company” and that “only the other car is covered” – both of which are untrue.

The customer was then told they would need to “buy one of the two insurance policies” the company was offering.

Only after the secret shopper said they would need to go away and think about did, the agent said it was their choice whether or not to purchase a policy.

OK Mobility told Which?: “OK Mobility employees always provide information about the coverage or extras that the company offers that may be of interest to the user.

“In this sense, OK Mobility employees offer customers the possibility of hiring coverage that allows them to limit their liability in case of damage to the vehicle and clearly explain both the price of the coverage and what exactly it consists of so that customers can freely decide whether or not it is worthwhile for them to hire such limitation of liability.

“It is an optional product that the customer can decide whether or not to purchase.”

The spokesperson added: “OK Mobility recommends taking out coverage directly with our company, as the enterprise that owns the vehicle and therefore the only one capable of directly covering the property, to protect the client from possible extra charges in the event of damage.

”In 100% of cases, customers are always informed of the cover they are contracting with OK Mobility. 

“The amount per damage category and vehicle group is shown in a price matrix that the company provides to its customers.

“The deposit is a pre-authorization, not a direct charge.

“Normally, a hold is placed on the cardholder’s account, although the specific effect on the card will depend on each issuing institution.

“Once the rental is completed, the pre-authorisation will be unblocked.

“Depending on the operation of the card issuer, the time it takes for the unblocking to be reflected will vary, though the average time is usually between 14 to 30 days.

“The rental companies do not influence this process, since it depends on the financial entity issuing the card.

“We work vigorously to protect fair competition in the marketplace and the free choice of our customers based on the information presented during their interaction with OK Mobility through our agents or our online communication channels.”

Meanwhile, Which? said that Goldcar, that has come bottom in its annual car hire survey for the last six years, also shared incorrect information at the rental desk.

The investigator was told in Malaga that they had no cover, “no protection, nothing…in case of damages, you pay everything”, even though basic insurance was included in the rental.

In Alicante, Goldcar staff told the undercover investigator that the ERI policy they had would only cover the other vehicle in case of an accident, which is not accurator.

When Which?’s investigator rebuffed this, the agent insisted that they would only be able to use the ERI in the event of an accident. 

A spokesperson for Goldcar said: “Goldcar Spain is, of course, disappointed that the alleged experiences have been identified by Which? Travel. 

“With regard to insurance cover, the company offers premium cover to provide a seamless process should damage occur during a customer’s rental.

“A customer, of course, has the right to choose to buy their cover separately, however, if this is the case they will be charged for any damages that occur during the rental and will then need to claim the costs back from the chosen provider.  

“Whilst the company has not been given the opportunity to see the footage referred to by Which? Travel it is committed to investigating any incidences where a customer believes they have received service that does not match expectations for a low-cost brand. 

“The company introduced a Code of Ethics for counter sales and a Guide of Good Sales Practices in 2021, both of which are reviewed annually based on customer feedback about their sales experience.

“If an employee breaches the Code of Ethics, they are immediately warned and penalised economically and if breaches are repeated they can be subject to termination of their contract.”

Dollar also scored poorly in Which?’s latest car hire survey – coming second from bottom.

One respondent even claimed they were charged for insurance they turned down.

The US firm is much less prominent in Spain than it is in America, and at both Alicante and Malaga airport bookings were handled at the Hertz desk as Dollar is a Hertz subsidiary. 

Which? said its experience with Dollar in Alicante was smooth and pressure-free, but at Malaga Airport the undercover shopper felt misled.

They were told their ERI policy “isn’t valid” and that “the thing you bought on the internet is for nothing” despite it being perfectly valid.

The mystery shopper was also told they’d be liable for up to €2,400 (£2,065) if anything happened to the car – and that any scratch bigger than 1cm would cost between €300 (£258) and €400 (£344) to fix, plus a €50 (£43) admin fee and tax on top.

Staff claimed that “full cover is always cheaper than minimum damage” and said this would cost €162 (£139) for the total of the period – despite the rental itself costing £132.

A spokesperson for Dollar said: “Although we have not been able to view the footage, the actions described do not align with our corporate values or policies.

“Providing outstanding customer service is a top priority for Dollar and we regularly take steps to ensure all staff adhere to our standards.”

Upselling is not against the low, but under the Consumer Protection From Unfair Trading Regulations it is illegal to use misleading or aggressive practices that are likely to lead customers to make a purchase they would not otherwise have made.

Spain has similar consumer protection legislation to the UK, meaning holidaymakers should be free to hire a car without undue pressure from agents. 

Rory Boland, editor of Which? Travel, said: “Every year we hear from countless travellers who have felt ripped off and pressured by their interactions with staff at the car rental desk, and our undercover filming has uncovered absolutely shocking practices by Goldcar, Dollar and OK Mobility staff.

“Anyone hiring a car this summer should ensure they book with a reputable company or broker, and to avoid the pressure from pushy agents they should buy their own excess reimbursement policy before they travel.”

How to avoid the car hire insurance hard sell

You don’t have to buy insurance in Europe as basic insurance is always included in the rental – but that doesn’t stop some car hire companies from pressure selling their policies. 

To withstand the pressure from pushy agents, Which? recommends that you buy your own excess reimbursement policy from a third-party insurance provider, then just say no at the rental desk.

Explain that you don’t want any extra cover and that you understand the need to pay up to the excess limit if you damage the car – in the knowledge that you can claim it back.

Some people like to print out their own ERI policy to show the rental company, but the consumer champion has found that this can open you up to the hard sell as agents can pick holes in your policy that don’t really exist.

How car insurance works

When travellers hire a car in Europe, they don’t need to buy any additional insurance, as basic insurance is always included in the rental price.

However, that insurance is subject to an “excess”, so if the car is damaged it can be necessary to pay a contribution towards repair costs, regardless of who is at fault.

Data from Zest Car Rental suggests that typically holidaymakers could be charged hundreds of euros depending on the issue.

Common issues like a puncture could cost as much as €300 (£258) to rectify, while a replacement windscreen can cost around €750 (£644).

To mitigate that, there are two options – purchase an SCDW policy from your rental firm, which removes or reduces the excess, or buy an ERI from a third party (either directly from an insurer, or via your car hire broker) which allows you to claim the excess back.

On average, Which? found for a week’s cover in Malaga this summer, holidaymakers would pay £177 for a SCDW from their car hire firm, compared to £38 for an ERI from a broker, and just £23 if purchasing directly from an insurer.

Not only are SCDWs more expensive, but they are inferior too, Which? said.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories