MANHATTAN (CN) - In a $1.3 billion class action demand, a customer claims Hertz uses a "deceptive, predatory and fraudulent scheme to purposefully inflate and manipulate charges to customers."
Lead plaintiff Frederick Cohen sued The Hertz Corporation, Hertz Global Holdings, and Hertz Investors, in Federal Court.
Cohen claims that Hertz "routinely and methodically utilized, at minimum, three different schemes to unlawfully inflate customer invoices," and overcharged hundreds of thousands, possibly millions, of customers.
When customers use discount coupons, Cohen claims, Hertz charges sales tax on the full price, not the discounted price, in violation of New York tax laws.
He also claims that Hertz gives only partial discounts, not the full discount it promised.
Cohen, a member of the American Bar Association, claims Hertz promised him a 10 percent discount for his ABA membership, but gave him only 5 percent discount.
He claims that Hertz also charged sales taxes on full tanks of fuel even when customers received a "refueling credit" for returning a car with more gas in the tank than they had received from Hertz.
Though Hertz failed to deduct the refueling credit before calculating the sales tax, its invoices showed the discount figure before the tax figure to trick customers, according to the complaint.
Cohen seeks to represent everyone who rented cars from Hertz from 2008 through 2013 and was overcharged.
He seeks class certification and more than $1.3 billion in compensatory and punitive damages for fraud, false advertising, intentional and negligent misrepresentation, breach of fiduciary duty, conspiracy and negligence.
He is represented by Alan Ripka with Napoli Bern Ripka Shkolnik.
Hertz Investors, the parent company of Hertz, is a wholly owned subsidiary of Hertz Holdings.
With a rental fleet of more than 355,000 vehicles in the United States and more than 174,000 overseas, Hertz is the second-largest U.S. car rental company by sales, according to the complaint, which cites the company's filings and a November 2012 Wall Street Journal article.