Two consumer safety groups are asking the Federal Trade Commission to order Enterprise Rent-A-Car to start fixing every vehicle with a safety recall before renting them to consumers. The groups say the request highlights the lack of a requirement that rental companies must fix recalled vehicles before renting them.
The request comes about three months after Enterprise admitted in a California court that its failure to fix a Chrysler PT Cruiser was responsible for the deaths of two California women when it caught fire and crashed.
Shortly after that admission — and a $15 million award by a jury — Enterprise issued a statement in which the company noted its regret over the deaths but also indicated it might not immediately carry out recalls it did not consider major safety problems.
That makes it clear that the F.T.C. must act, according to Consumers for Auto Reliability and Safety of Sacramento and the Center for Auto Safety of Washington, which filed the request on Monday. They were joined by Carol Houck, the mother of the two women who died.
Enterprise Rent-A-Car is part of Enterprise Holdings, which also includes Alamo Rent A Car and National Car Rental. Enterprise Holdings says those three brands “collectively lead the car rental industry with more than a third of all airport business in the U.S. and Canada.”
Under federal law, auto dealers are not allowed to sell a new vehicle without carrying out a recall, said Clarence Ditlow, executive director of the Center for Auto Safety. The danger to consumers is that there are no such restrictions on rental-car companies, he said.
“We ought to apply the same logic to rental-car companies,” he said.
Rosemary Shahan, the president of Consumers for Auto Reliability and Safety, said rental cars affected so many consumers that the F.T.C. must act.
“Sooner or later, almost everyone ends up renting a car, at least for a day or two,” she said. “You shouldn’t have to worry that the rental car company knows it has a safety defect, and is under a safety recall, but hasn’t bothered to get it fixed — putting your life, and your passengers’ lives, in jeopardy.”
While the National Highway Traffic Safety Administration does not have the authority to force rental-car companies to carry out recalls, a spokesman said: “We expect the rental car companies to provide safe cars to their customers by submitting the recalled vehicles to the appropriate manufacturers for the appropriate safety repairs in a timely fashion.”
Enterprise issued a statement last month saying the company’s policy was to not rent vehicles without carrying out recalls if they involve “the risk of sudden loss of control, safety-restraint failures or fire hazards.”
Other recalls are “addressed as soon as possible, immediately,” Laura Bryant, a spokeswoman for Enterprise Holdings, said in an interview.
Enterprise is concerned about safety, Ms. Bryant said. When Toyota issued recalls over sudden unintended acceleration, Enterprise immediately contacted people who had rented those models and gave them different vehicles, she said.
In deciding whether to “ground” a vehicle and not rent it, Enterprise relies on the automaker’s expertise, she explained. If the automaker says consumers should stop driving a vehicle until it can be repaired, then Enterprise will not rent it, she said, adding, “They are considered the ultimate expert on this.”
By definition, a recall involves a safety problem that the highway safety agency considers a threat to consumers.
In the petition filed with the F.T.C. [pdf], the two consumer groups and Ms. Houck said that Enterprise had no right to pick and choose recalls, that consumers needed to be protected and that all recalled vehicles should be parked until they were fixed.
Two of the victims of a failure by Enterprise to carry out a recall were the Houck sisters: Raechel, 24, and Jacqueline, 20. On Oct. 7, 2004, they were killed in Monterey County, Calif., after a fire broke out under the hood of their car and they collided with an 18-wheeler.
Their vehicle was a 2004 Chrysler PT Cruiser, which had been recalled early in June because power steering fluid could leak and cause a fire in the engine compartment. That recall covered about 438,000 PT Cruisers from the 2001–5 model years.
While there were many news articles about the recall, it wasn’t until late September that Chrysler sent owners notice of the recall. That letter told owners to “contact your dealer right away.”
A suit filed in 2005 in the Superior Court of California by the women’s parents charged Enterprise “carelessly, recklessly and unlawfully” failed to fix the defect and put profit ahead of safety by renting the PT Cruiser to the sisters. Chrysler was also named in the suit but was dismissed as a defendant when the automaker filed for bankruptcy in 2009.
While rental-car companies do not have to pay for recall repairs, they do lose the use of the vehicles while the work is being done. As part of the legal proceedings, an area manager for Enterprise who worked in San Francisco said in a deposition that rather than turn customers away, recalled vehicles were routinely rented when there was a shortage of vehicles.
In May, Enterprise admitted that the company was negligent, and that its negligence “was the sole proximate cause of the fatal injuries.” In June, a jury awarded the parents $15 million.
Ms. Houck, the women’s mother, says Enterprise and other rental-car companies must be forced to change their practices.
“Why is the rental-car industry allowed to rent those cars, and not only rent them, but not even disclose to the public that these cars are recalled and not repaired?” she said in an interview. “It just doesn’t make sense.”
Ms. Houck said she wanted the F.T.C. “to order that any safety recall not be discretionary,” adding: “They have to be pulled from the lot and fixed. It is not rocket science.”
If the F.T.C. takes action against Enterprise, Ms. Houck said she hoped it would put the other rental-car companies on notice. “If the hammer comes down on Enterprise, I would find it surprising if its competitors don’t take notice of that and revise their practices accordingly,” she said.
An F.T.C. spokesman said the petition had been received and “the agency would respond appropriately.”