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Hertz Pays $168M to Settle Wrongful Arrests Claims: ‘We Will Not Always Be Perfect’

Hertz Global Holdings LLC, the rental company, accused of falsely reporting vehicles stolen, resulting in the wrongful arrests of hundreds of mostly Black customers, will pay $168 million to settle 364 outstanding claims.

Some of the customers were arrested at gunpoint. Many were accused of failing to return rentals, and in some instances, the vehicles were reported stolen before there were even reserved by the customers.

Hertz CEO Stephen Scherr promised to make amends for the arrests soon after being selected as the head of the company in February.

Hertz Pays 8M to Settle Wrongful Arrests Claims: 'We Will Not Always Be Perfect'
White Bear Lake, Minnesota, Hertz car rental. Hertz filed for bankruptcy protection due to the coronavirus pandemic. Hertz lost all its revenue when travel shut down due to the coronavirus. (Photo by: Michael Siluk/Education Images/Universal Images Group via Getty Images)

“As I have said since joining Hertz earlier this year, my intention is to lead a company that puts the customer first,” Scherr said in a Dec. 5 statement announcing the settlement.

It took Black community activist Saleema Lovelace nearly two years to clear her name. Lovelace told Atlanta Black Star in an earlier interview that she lost several career opportunities and her reputation was ruined. James Tolen, a Black man, was detained at gunpoint in late 2020 and still copes with the traumatic effects of the ordeal.

“There was nothing I could do,” said Tolen speaking to Atlanta Black Star about his arrest. “It was dark. No one was there. I couldn’t touch my phone. I couldn’t let nobody know. …Opening the door that really rattled me because one simple mistake and I could’ve been dead.”

The lawyer behind the nearly 400 claims against Hertz said more than 80 percent of customers wrongfully detained were Black. Some of them lost their jobs and homes. One woman had a miscarriage after being arrested three times for the same rental car.

The federal lawsuits, which sought $750 million from Hertz, alleges that the arrests were caused by systemic failures within the company.

Hertz allegedly failed to create an integrated process that would record extensions or keep track of the vehicles. The complaint also alleges that the staffers reported rentals stolen for past due balances and denied cards without reattempting payment methods.

Atlanta Black Star reached out to attorney Francis Alexander Malofiy for this story.

About 95 percent of the false theft reports claims are now resolved, a Hertz representative said on Dec. 6. Courts records show they date back to at least 2015.

The company will pay out the $168 million, which will be mostly covered by its insurance carriers.

“While we will not always be perfect, the professionals at Hertz will continue to work every day to provide best-in-class service to the tens of millions of people we serve each year,” Scherr said. “Moving forward, it is our intention to reshape the future of our company through electrification, shared mobility and a great digital-first customer experience.”

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