A Payless car rental franchise that allegedly failed to let customers know it used global positioning systems to track them when they crossed state lines and then slapped them with surcharges, has settled a consumer protection suit filed by the state, according to the Associated Press. The San Francisco Bay area company Acceleron Corp. agreed Tuesday to reimburse hundreds of customers who were hit with the additional fees — some to the tune of $3,000 — beginning in January 2003, according to California Attorney General Bill Lockyer. The use of electronic monitoring devices like GPS in rental cars has become a contentious issue in recent years. In 2002, Connecticut stopped Acme Rent-a-Car from tracking its customers with GPS and fining them $150 for speeding. A law in New York prevents rental-car companies from using global positioning systems to fine renters for speeding or driving outside the state. A similar law in California, which goes into effect in January, allows companies to use such devices only to find lost or stolen vehicles and help drivers navigate. The suit, the first of its kind in California, alleged that Acceleron failed to properly notify renters that their cars were equipped with GPS. The suit also alleged that the company did a poor job of letting customers know about its geographic restrictions. "Acceleron laid a trap for its customers," Lockyer said in a statement. "Vacationers counted on the advertised unlimited mileage. But if they took a side trip outside California to Las Vegas or the Grand Canyon, Acceleron hit them with an unpleasant surprise when they returned their car." Mark Mittelman, an attorney for the company, said that it was well within its legal rights when it installed the GPS devices in 2003. The company also maintains that its rental agreement did alert renters of the tracking device and its geographic restrictions. "It was not used for any intrusive reasons," Mittelman said. "They did not — I emphasize, did not — monitor where the renters were going within the state. They just wanted to, again, make sure that vehicles did not disappear, because vehicles do disappear, literally." The suit also accuses Acceleron of other unfair business practices, including providing customers with unsafe vehicles and refusing to reimburse customers who paid to fix brakes or tires. The company will pay an additional $250,000 in civil penalties and other costs.

Originally posted on Fleet Financials