The world’s biggest car rental company Orbitz has been fined for running a “pay-for-ride” scheme that allowed customers to pay an amount based on the distance travelled.
In its annual report on Monday, the Australian Consumer Law Centre (ACLC) said the company had a total of more than $9.7m in “unearned compensation” for over a year.
“The company has failed to properly protect its customers from unscrupulous operators and failed to comply with the law, which requires companies to report and disclose all potential breaches of consumer protection,” said ACCC national director Ian Stewart.
“The ACCC will continue to investigate these breaches.”
The ACCCs report said Orbitz “has a track record of repeatedly failing to protect consumers”.
The ACCs consumer law experts said the scheme “is a form of pyramid scheme” where a customer pays money for distance travelled and then receives a reward from Orbitz, a discount from the amount of time spent.
“This is clearly unlawful and a breach of the ACCC’s consumer law responsibilities,” said Stewart.
“At the same time, Orbitz should have taken action to protect its own customers, as this would have been an additional cost to the company and it could have helped to deter such conduct.”
Ovalz said it would review its practices and “look at all of the information that has been gathered”.
“Ovalys customers have always been confident with us, and we are committed to improving our customer experience and ensuring that our customers are safe and supported while travelling with us,” the company said in a statement.
“We also encourage consumers to share their experiences with us through the Optum Helpline.
Optum is a confidential, 24/7 hotline for Australians who need help.”
The ACLC said Orbitzy had been fined $50,000 by the ACCCs Consumer Protection and Consumer Guarantees Division.
“Oral complaints made by consumers to the ACCs Consumer Protection Division about Orbitz and other car rental businesses are treated in a fair and independent way,” ACCC spokeswoman Julie O’Neill said.
“All complaints received through the hotline are investigated and resolved within 24 hours.”
Oral grievances are assessed by an independent compliance officer, who then decides whether to pursue a claim with the ACCS.ICAC’s ACCC investigations division also has a zero tolerance policy on the exploitation of vulnerable consumers.
“When the company is found to have broken the law in relation to its conduct, it will be immediately removed from the ACCCA list of companies that are in breach of their responsibilities to Australian consumers,” O’Neil said.
The ACC’s consumer watchdog, the ACC, has launched an investigation into the Orbitz scheme.
A spokeswoman for Orbitz said the ACC was investigating and would make a final decision on whether to proceed with a legal action.”ICAC has made an investigation of this matter and will determine whether to take legal action against Orbitz for any breaches of its consumer law obligations,” she said.