Consumer Protection Authority: Fine of NIS 6 million on Budget Car Rental for misleading consumers

The Consumer Protection Authority imposed a fine of NIS 5,598,720 on Domicar Ltd. (Budget Car Rental) for misleading consumers under aggravating circumstances: concealing a material detail in the transaction. It is alleged that Budget sold 93 vehicles that were used as rental vehicles, which it presented as vehicles that were used as leasing vehicles to 93 different consumers. In addition, the company published 28 cars on the company website and on the Focus website, presenting them as leasing vehicles, while in practice they were used as rental vehicles, and sometimes even as leasing vehicles.
It seems that this apparent deception is a practice among car rental companies, since this is the third car rental company to be fined for such deception: Alber was fined NIS 3.3 million in June 2020 for misleading the sale of 86 vehicles, and Peri Yeruham was fined NIS 1.4 million in October 2021 for Deception in 16 vehicles.
Both companies filed an appeal. Alber's appeal was closed in a compromise: the sanction was reduced by about 45% to 1.8 million, in accordance with the reduction regulations, mainly following actions taken by the company to prevent the recurrence of the violations, and Yeruham Perry's appeal is ongoing these days, and a hearing will be held next week.
The sanction filed against Budget is the highest, which seemingly highlights the severity and scope of the violations committed by the company. She is also entitled to appeal within 45 days.
There is a difference between the designation of a vehicle for rental and its designation for leasing (leasing): rental vehicles are leased to several drivers, with each driver using it for a short period of time and therefore their wear and tear may be greater, compared to leasing vehicles that are usually leased for a long term, to one person (and his passengers). Therefore, a rental car is less attractive, because it is seen as very used, and the depreciation of a rental car is also more significant.
Consumers should beware of the ambiguity regarding whether the vehicle is for rent or leasing and demand from the companies the report or log of the vehicle's movements and thus see how many renters or lessees have driven it. The companies keep such a report on each vehicle since they must know who drove the vehicle at any given time, Among other things because if they receive a report on the vehicle - they will know who to file the report on: the driver who was in the vehicle at the time.
The Authority emphasizes that there was a concealment or lack of proper disclosure to the consumer since the past of the vehicle, its use and the fact that it was used as a rental vehicle, and not only as a leasing vehicle, are essential details in the transaction, as they may testify to the condition of the vehicle, its quality, its wear and tear, and other factors that influence on the consumer's decision whether to purchase the vehicle or not. The same violations took place in aggravating circumstances also in advertising on websites.
The authority has already imposed a financial sanction on the company in the past, so this is not the first time that it allegedly violates the law and should have received a higher fine. The Authority explains that Budget did not violate the same sections of the law in the three years preceding the violation in this procedure. In light of this, her fine was reduced by 10% of the original amount in accordance with consumer protection regulations from NIS 6,075,000.
The authority stated that: "In this case, the company advertised 16 vehicles on the company's website, of which 12 vehicles were also advertised on the Focus website, while presenting them as leasing vehicles, while in practice they were used as rental vehicles and sometimes even as leasing vehicles. This constitutes an act that may mislead a consumer in a material detail in the advertisement , regarding each and every vehicle published".
Anita Yitzhak, Deputy Commissioner of the Authority and Head of the Investigations and Intelligence Division, said that: "The company misled consumers regarding the previous use of the vehicle, this is a particularly serious deception because these details can testify to its condition, quality and other additional parameters, which influence the decision whether to purchase the vehicle. The purchase of a vehicle is one of the more expensive and more complex transactions that a consumer carries out. This is a significant information gap between the dealer and the consumer regarding the product, both regarding the condition of the vehicle and regarding the previous use made of it, and it is important to understand that the consumer has no way to check the information himself. The imposition of the financial sanction is another step in the Authority's determined war against those who mislead the consumer public."
The company stated in response: "Domicar completely rejects the unsubstantiated claims made against it. The company will work to prove its justification, to cancel the sanction and to maintain its good name in court and through the other legal means available to it. The company notes that no complaint has been made on this issue by any customer and that the claims of The Authority for Consumer Protection refers, apparently, to a small number of transactions, conducted several years ago.
"The company has been serving its loyal customers for decades according to strict rules of honesty, respect, fairness and full transparency. The company is convinced that the court will reject the authority's claims and prove its righteousness and will continue to do everything, with the aim of preserving the customers' trust. Happy New Year."