Hundreds of Hertz customers say they were accused of bogus theft claims after renting cars – some were even arrested

A severely disabled US Air Force veteran with post-traumatic stress disorder (PTSD). An employee at Nasa's famous Jet Propulsion on assignment in Florida. A California dentist trapped in the countryside by Covid-19 quarantine rules.

These are among the 232 people who claim they were falsely accused of car theft by Hertz despite legitimately renting, returning, or in some cases never having heard of the vehicles they were alleged to have stolen.

In court documents filed in Delaware in December, lawyers for some of those customers accuse the rental giant and its subsidiaries Thrifty Car Rental and Dollar Rent-A-Car of "filing false and materially misleading police reports that threw [their] lives into a tailspin".

Of the 232 people named in court, 159 say they spent time in jail and 209 say they were arrested or detained, in some cases as many as four times each.

The lawsuit asks the court to reopen Hertz's recent bankruptcy agreement and list the customers as creditors, arguing they were not properly informed of their right to do so before the deal was approved last year. The suit was originally filed in 2020.

Last week, Judge Mary Walrath ruled that 17 out of 32 customers who joined the lawsuit after it was filed should have been told by Hertz about the deadline. Other cases have not yet been decided.

"For years, the Hertz Corporation has been falsely reporting its customers for car theft, throwing them in jail on felony charges, prosecuting them, burdening them with criminal records that impact their livelihoods, and separating them from their family and loved ones," says the complaint from December.

"But in each case, there was no theft. Each of the [plaintiffs] paid for their car and was authorised to use the rental – other than two who have never rented from Hertz."

The complaint adds: "While Hertz knows the identities of those who it falsely named to the police, many times the victims themselves do not. Each of these false reports is a ticking time bomb waiting to go off and threatening to destroy a victim."

Hertz disputes these claims and is fighting the lawsuit. A spokesperson told the Los Angeles Times: "Situations where vehicles are reported to the authorities are very rare and happen only after exhaustive attempts to reach the customer.

"The vast majority of these cases involve renters who were many weeks or even months overdue returning vehicles and who stopped communicating with us well beyond the scheduled due date."

Hertz was losing hundreds of millions of dollars per year even before the pandemic, and when global travel seized up it filed for bankruptcy. Last May, it was bought out by two private equity firms, Knighthead Capital Management and Certares Management.

Greg O'Hara, the new board chairman installed by Hertz's buyers, also sits on the board of the Innocence Project, a charity that campaigns against miscarriages of justice.

In November, Hertz's customer service went viral when a law professor, Kate Klonick, posted on Twitter about her nightmare experience trying to pick up a car she had already reserved so she and her partner could spend Thanksgiving with his mother.

Prof Klonick said the company repeatedly promised cars it could not deliver at multiple locations before eventually finding her a defective vehicle with a nearly empty gas tank for twice the original price.

One employee, she wrote, told her that the company's customer service office had "no idea" about stock levels at local branches and regularly took bookings for cars that were not available. Hertz apologised and said it would refund Prof Klonick's extra costs.

The lawsuit in Delaware alleges similar dysfunction. Nirbhay Agarwal testified that Hertz leased him a car it had already reported as stolen, leading him to be arrested at gunpoint hours later.

Carmen Bosko said she was jailed for 40 days and separated from her newborn child for stealing a car she had returned four months earlier. Others said they were victims of identity theft.

Mary Lindsay Flannery, a disabled Air Force veteran of 11 years, said she was jailed for 15 days, triggering a PTSD episode, after Hertz filed a theft report that did not mention the $4,000 she had paid the company one month earlier.

Dr Tederhi Teddy Usude, a dentist in Santa Clarita, California, testified that he had initially rented a car for one week and repeatedly extended it over the next six months. Out of the blue, he was told the car was overdue.

Dr Usude told Hertz that he was in quarantine in rural Northern California due to a Covid outbreak at the hospital where he was working, but that he would return the vehicle after his quarantine ended. Upon returning, he was arrested at gunpoint.

Alleged failures of communication within Hertz are a common theme in the complaint. Some customers in the suit say they agreed to return dates with employees at local Hertz branches only to later be arrested, or that theft reports were issued even after they paid the company thousands of dollars.

In a response filed in court in February, lawyers for Hertz said: "When a car was not returned, [Hertz] worked diligently to recover it... [Hertz] made repeated attempts to contact the customer by all available means of communication, including phone calls, voicemails, emails and texts."

Regarding Ms Bosko, Ms Flannery, and Dr Usude, Hertz said their rentals were more than two months overdue and that it had repeatedly contacted them to ask for the vehicles' return.

The company also claimed that Ms Bosko's car was not returned by her but impounded and then returned to the company with damage. In Mr Agarwal's case, they said the theft report was actually filed by a prior customer.

The case continues.