Legal News

The Federal Trade Commission is under pressure to change regulations allowing rental car companies to rent out cars under recall. Consumer groups and New York lawmaker Charles Schumer want the FTC to make rental car company rules more in line with what car dealers face.

Schumer asked the FTC to make a change in the rules, or he will address the problem with legislation, reports The Washington Post. "[I]f automotive dealers are not allowed to sell recalled vehicles without first fixing the safety issues, then rental car companies should be held to the same standard," he said.

Consumer groups have recently petitioned the FTC to force Enterprise Holdings to change its policies that allow recalled vehicles to be part of the rental fleet. Enterprise Holdings, parent company of National, Alamo and Enterprise, is the largest rental company in America. The consumer groups say that not knowing whether a rental car is the subject of a recall is a safety threat to business travelers and other long-haul renters.

The consistent Toyota recalls have put new pressure on this problem.

According to The Post, Enterprise Holdings says it goes beyond what most car owners do with recalled vehicles. Unlike car owners who rarely stop driving a car that is the subject of a recall until it can be fixed, Enterprise says it grounds the cars until repairs are made. Enterprise spokeswoman Laura Bryant told The Post, "In most cases, we place a 'hold' on recalled vehicles so they are not rented until the recall work is completed."

The requests for new regulations regarding recalled cars come after the successful suit against Enterprise for the deaths of two sisters, Raechel and Jacqueline Houck. As discussed in a prior post on FindLaw's Injured, the two rented a PT Cruiser which was under recall for a defective power steering hose that could cause engine fires. Steering problems caused the accident which killed both Raechel and Jacqueline Houck. Enterprise admitted its liability for the accident and a jury awarded the parents of the two victims $15 million.

In their petition to the FTC, the consumer groups pushing for change claim Enterprise conducted "deceptive trade practices" by suggesting its vehicles are safe, well-maintained and reliable.

Related Resources:

• Starwatch consumer, Rentals and recalls (Kansas City Star)
• What should my car rental contract include? (FindLaw)
• Car and Vehicle Defects and Recalls (FindLaw)