The local Budget Rent-A-Car agency is the target of several lawsuits
over its use of sophisticated technology that tracks customers and for charging
them extra - up to $7,500 in one case - for driving beyond certain state boundaries.
Consumers and privacy advocates have blasted the use of the satellite-based devices, which also let the company see whether their customers are speeding and where they stay, as an example of invasive technology.
"They have a tracking device and they know where you're driving (but) they don't disclose that to anybody," said Travis Mague of Tucson, who was charged nearly $2,500 in mileage fees for driving into Texas in April on an unlimited-mileage weekly rental that was estimated at $253.
In at least four lawsuits involving seven other consumer plaintiffs, Consolidated Enterprises Inc., which does business in Arizona as Budget Rent-A-Car and Budget Car & Truck Rental of Tucson, is accused of defrauding customers by failing to disclose the tracking systems and potential penalty fees, as well as invasion of privacy.
The company has denied any wrongdoing in the cases, which have not been set for trial.
Lynne Trenery, a Tucson attorney representing five Budget customers in one lawsuit and two others in separate suits, said her clients were not advised of the use of the tracking systems and the boundaries were not clearly disclosed in rental contracts.
"It's all fine if they want to have restrictions, but at the very least they need to be disclosed in the contract," she said.
In each case, the customers were charged $1 a mile for their entire trips for venturing across state lines outside company-imposed boundaries, resulting in charges ranging from $1,600 to about $7,500.
Ron Newman, a Tucson attorney representing Consolidated Enterprises, declined to comment on the company's use of tracking systems, citing the pending lawsuits.
The local Budget agency is a licensee of Budget Rent a Car Corp., which does not have control over local licensees' business practices, an official of the Lisle, Ill., company said.
In court filings, the local Budget agency denied giving the plaintiff customers permission to drive outside of Arizona.
The company's contracts state "Vehicle cannot be driven out of Arizona without written approval," and "With no approval, an additional $1 per mile will be charged."
In some cases, according to court documents, the customers discussed their travel routes with Budget rental agents, and permitted areas were noted on rental contracts.
Some customers said they didn't realize the $1-per-mile charge would be applied to their entire trip.
"All of the people I've talked to took that to mean it would be $1 for every mile (driven) out of bounds," said Tucson attorney Michael Moore, who filed suit in January on behalf of a Tucson couple charged more than $5,300 in mileage for taking a car 270 miles through out-of-bounds Idaho.
Mague, who is not part of any lawsuit against Budget, said he only realized part of his planned trip was out-of-bounds when he went to pick up a Nissan Altima in late April at Budget's office at 401 W. Orange Grove Road and the contract said travel was limited "only to bordering states."
Eager to leave, Mague said he figured his destination of San Antonio was closer than many locations within the allowable area, such as San Francisco.
"I figured no harm, no foul," Mague said. "We weren't putting an excessive mileage on the vehicle."
Industry officials say a growing number of companies are using the car-tracking systems, which employ a combination of satellite-based Global Positioning System (GPS), cellular telecommunications and computer technology.
Used by trucking companies since the late 1980s, such systems can also provide new "telematics" services such as map and directions displays and emergency functions like remotely unlocking car doors.
Most rental-car companies - including Budget's corporate-owned locations - use tracking systems mainly to recover stolen cars, but some monitor where customers drive because liability laws vary from state to state, said Cathy Stephens, editor of Auto Rental News.
Jenny Sullivan, director of public relations for Budget Rent a Car Corp., said the company-owned rental agencies use GPS tracking systems only to recover missing cars, not to enforce operating boundaries.
"We don't believe it's a consumer-friendly policy," Sullivan said. "The only time the GPS is turned on is when the vehicle is missing."
Sullivan said the company has no power to ban customer monitoring by its licensees.
An official of the company that provides the Tucson Budget agencies' tracking systems, Toronto-based AirIQ Inc., said the systems are in increasing demand.
AirIQ's systems are installed on more than 25,000 vehicles, including a growing number of rental cars, and company sales have doubled since last year, said Miguel Gonsalves, AirIQ vice president of marketing.
Gonsalves said most of AirIQ's rental-fleet clients use the systems for vehicle recovery, since overdue and stolen vehicles represent a major loss of revenue. He did not have a breakdown on how many companies use them to enforce boundary restrictions.
Another rental-car agency ran into a legal roadblock after taking customer monitoring to an extreme: speed monitoring.
In February, the Connecticut Consumer Protection Department ordered American Car Rental Inc., a Connecticut company that does business as Acme Rent-A-Car, to stop imposing $150 speeding "fines" on customers every time they drove over 79 mph for at least two minutes.
The department ordered Acme to refund money to at least 26 customers charged for "speeding."
Consumer-privacy advocates say the rental car tracking is another case of consumers' being tracked without their consent.
"At a bare minimum, it should be disclosed to consumers," said David Sobel, general counsel of the Electronic Privacy Information Center in Washington, D.C.
"The biggest problem we see is that there is basically no law governing the use of this technology at all," said Sobel, adding that tracking systems may create records that can be subpoenaed by police or private lawyers.
Trenery noted that tracking information Budget provided for one client included what hotels he stayed in each night.
While the Tucson lawsuits may be settled before going to trial, any court decisions may set important legal precedents for similar cases in the still-evolving area of privacy law, Sobel said.
* Contact reporter David Wichner at 573-4181 or at email@example.com