URGENT UPDATE: Avis Budget Group Inc. has just been ordered to pay $19 million to settle a class-action lawsuit concerning hidden fees charged by its subsidiary, Payless Car Rental Inc. This development could impact thousands of consumers who rented cars between January 1, 2016, and November 25, 2023.
The lawsuit, filed in September 2016, alleged that Payless improperly charged customers for optional services, specifically the Gas Service Option (GSO) and Roadside Protection (RSP), without proper disclosure. According to the plaintiffs, this conduct violated the New Jersey Consumer Fraud Act and other state statutes. The settlement highlights ongoing issues in the car rental industry, where customers often face frustration over hidden fees and poor service.
Under the terms of the settlement, consumers who rented from Payless and paid either of the disputed charges may be entitled to receive up to $20 per rental for GSO fees and $12 per rental for RSP fees. Payments will be issued automatically, bypassing the need for claim forms, unless individuals opt out or choose a digital payment method. The deadline for opting out is November 10, 2025, with a fairness hearing scheduled for December 2, 2025.
Consumer advocate Christopher Elliott noted, “Car rental companies are quietly raising revenue through add-on charges, and recent litigation shows just how costly it can be to consumers.” This settlement is particularly significant given the ongoing challenges in the car rental market, where long wait times and poor customer service have led to rising dissatisfaction.
As part of the settlement, Payless must update its sales process for ancillary products, requiring affirmative consent from customers before charging them. This operational change could have substantial implications for the rental industry’s revenue strategies, which have increasingly relied on add-on services.
While the $19 million settlement amount may seem manageable for Avis Budget Group, the potential reputational damage and operational adjustments signal a shift in how car rental companies may conduct business moving forward.
This lawsuit and its outcome could also encourage similar legal actions against other rental car brands, increasing compliance risks across the industry. As the car rental landscape continues to evolve, consumers and investors alike should remain vigilant about how these changes impact both service quality and financial performance.
Stay tuned for more updates on this developing story as we monitor the implications of the Avis-Payless settlement and its effects on the car rental market.
