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Car rental companies: Driven to danger

Op-Ed

Astonishingly, car rental companies aren't required to repair recalled vehicles. Pending bills in the state and U.S. aim to fix that.

August 10, 2011|By Ben Kelley

A long-standing threat to rental car customers from unrepaired defective cars — an issue that received virtually no attention until early this year — is now the focus of a sweeping federal bill. What started as an obscure court case in California has grown into a national initiative, supported by a cross-section of consumer advocacy groups, to ensure the safety of millions of people who rent cars.

The 2004 incident that led to the legislation involved sisters Raechel and Jacqueline Houck, who rented a Chrysler PT Cruiser from Enterprise Rent-A-Car in Santa Cruz. Four days later, the two young women were dead, killed in a fiery crash triggered by a defect in the car. Chrysler had recalled nearly half a million PT Cruisers a month earlier because of the defect — a design that could result in fire from a leakage of flammable power steering fluid onto hot engine surfaces or catalytic converters. But Enterprise ignored the recall and continued renting out the car. The sisters were the fourth customers to rent the car after the recall was announced. The Houck family sued the rental car company, and in 2010, after nearly six years of stonewalling, Enterprise finally admitted in court that it was responsible for the Houck sisters' deaths. A jury awarded $15 million in damages to the parents.

Although Enterprise's actions seem indefensible, it had broken no law because current statutes and regulations don't require rental car companies to fix recalled vehicles. Seeking to close that lethal loophole, California Assemblyman Bill Monning (D-Carmel) introduced a bill in February to forbid the companies from putting unrepaired recalled cars into the hands of California customers. The bill, AB753, seemed headed for swift approval; the need to protect the lives of rental car customers from safety hazards was obvious.

Obvious, that is, to everyone except the rental car companies. They quickly marshaled a campaign to defeat the bill, or to so weaken it that they could continue to rent recalled vehicles without first repairing them. Despite this effort, the Monning bill passed the Assembly in June. It is pending in the state Senate, where the companies' lobbying efforts against the bill have intensified.

The issue now has reached the federal level. Last month, Sen. Charles Schumer (D-N.Y.) introduced the "Raechel and Jacqueline Houck Safe Rental Car Act of 2011" to ban rentals of recalled yet unrepaired vehicles. "Millions of rental car customers and others who share the road with them may be at risk" without such a prohibition, Schumer said. The bill is co-sponsored by California Sens. Barbara Boxer and Dianne Feinstein and Connecticut Sen. Richard Blumenthal. It is expected to gather more co-sponsors; senators and their staffs are frequent travelers and, therefore, car renters.

In addition to banning rentals of cars and trucks under safety-defect recalls until they are repaired, the bill prohibits sales of rental cars with uncorrected defects. Last year, according to Schumer's office, rental car companies sold 1.4 million cars to auctions, wholesalers and consumers. The bill's provisions would be enforced by the Federal Trade Commission and state attorneys general.

Further, the bill would require the National Highway Traffic Safety Administration to carry out two studies and send the results to Congress. One study would address reports that rental companies have ordered new vehicles without side air bags or other safety features. Consumers renting or subsequently buying such cars were never informed of that, Schumer said. The second study would determine whether rental car companies were selling cars that they knew were about to be recalled.

In opposing proposals such as Schumer's and Monning's, the rental car industry has argued that its rentals of recalled vehicles before they are repaired are "infrequent." It also argues that some safety defects are not so serious that they must be fixed immediately. It has called for a two-tier recall system that would provide leeway to delay some repairs. But NHTSA has disputed the idea that some fixes can wait: "All safety recalls resulting from defects present an unreasonable risk to safety, and we believe it is inappropriate to suggest that some defects are not risky enough to require repair. For the safety of the motoring public, all recalled vehicles should be fixed promptly."

To some observers it seems incongruous that the rental car industry is fighting proposals meant to ensure the safety of their customers. After all, such a stance can only mean negative publicity for the companies and a stain on their reputations. But Carol Houck, the mother of the sisters killed in the 2004 crash and a vigorous proponent of the Monning and Schumer bills, thinks reputation and the well-being of customers are of less concern to the industry than money. "The industry's business model clearly illustrates that profit trumps safety every time," she says.

Ben Kelley is on the board of the Center for Auto Safety and works with the Trauma Foundation, two of the groups supporting the Schumer and Monning bills. He is working on a book about the Houck case. This commentary also appears on FairWarning (www.fairwarning.org), an online investigative news organization focused on safety and health issues.

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