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Hertz's new CEO addresses wrongful theft lawsuit

Stephen Scherr says practice of reporting cars stolen not acceptable


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The Hertz Corp.’s new CEO is in a mea culpa kind of mood.

Stephen Scherr, who took the helm of the Lee County rental car giant in February, went on CNBC’s Squawk Box April 4 and during the appearance apologized for the company reporting vehicles stolen while the drivers were in good standing — a practice that's led to dozens of false arrests.

“It’s not acceptable to Hertz to have any customer, a single customer sort of caught up in some of what’s happened,” he says, adding a moment later that “we will do right where our customers have been negatively affected and I’m looking to resolve that, you know, very, very quickly.”

Scherr said dealing with the issue was one of his priorities in his first 30 days. 

A class action lawsuit has been filed against the Estero company by customers alleging they were falsely arrested after the vehicles they rented were incorrectly reported stolen. According to the Philadelphia law firm behind the lawsuit, more than 230 claimants are asking for $530 million.

Scherr told the TV audience that “no one customer should be put through that” and that Hertz “is going to deal properly” with those affected. He said the company has changed its policies to make sure it doesn’t happen again and that, in context, only a few people were affected when compared with the 15 million transactions it engages in each year.

He expressed similar views in several other interviews over the next couple of days.

As will probably surprise no one, the lawyer behind the lawsuit was not particularly receptive to the admission of fault.

In an emailed statement from the public relations firm for attorney Francis Malofiy, he says Scherr “did not answer why dozens of victims are still facing active criminal proceedings. Indeed, there still has been no explanation for Hertz’s longstanding practices of deleting rental extensions and force-charging victims in full after reporting them for theft and saying they have not paid for the rental.”

For his part, after saying those affected would be taken care of, Scherr added: “But in the same vein, we’re not going to obviously engage with people who look to do harm to the company.”

 

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