Car Rental Agency Uses GPS to Monitor and Fine Driver

7 Apr ’05

Apropos a post I wrote recently on the new Aviva Autograph program, there is an interesting case out of Connecticut concerning the use by a car rental agency of onboard GPS to monitor vehicle speed and penalize the driver for driving at excessive speed. Quotes:

The Supreme Court unanimously upheld the findings of the state Department of Consumer Protection that the car agency, owned by American Car Rental Inc., could not justify the $150 penalty – sometimes levied multiple times against the same driver – as legitimate damages for the additional wear and tear high speeds cause on the car.

“The $150 collected by [American Rental] was more than 400 times the potential damage incurred,” Justice David M. Borden wrote. “Using the [consumer department] hearing officer’s calculation, a customer would have to travel more than 1,070 miles at high speeds, without decelerating below 80 miles per hour, to cause $150 of excess wear on the vehicle.”

The global position systems installed in all of Acme’s rental cars were programmed to fax the agency notice any time a car was driven at 80 mph or more for two minutes or longer. For each occurrence, the car agency charged the patron $150, usually levied immediately against whatever credit or debit card they had used to secure the rental.

It appears that the rental agency’s disclosure of the monitoring system was deficient:

Court documents indicate Acme began using GPS to track speeding by drivers of its rental cars in October 2000. From October to December of 2000, those who rented cars in 32 of 400 contracts written were charged the speeding fee. In all, 76 Acme patrons paid in excess of $22,000 in fees that ranged from $150 to $750 per driver.

Several of those drivers who were assessed the penalty fee challenged not only its amount, but the lack of notice given by the rental agency that the global positioning systems would be used to monitor speed and what penalties would attach.

Several of the contracts in evidence do make reference to fee, but the reference is in the midst of a paragraph about accident reports. The sentence states, “Vehicles driven in excess of the posted speed limit will be charged $150 per occurrence.”

The Supreme Court in a footnote to Monday’s ruling stated it did not need to reach the issue of whether the notice to patrons was adequate, because it had deemed the fee to be an illegal penalty.

Assuming adequate notice is given and consent obtained about the monitoring and use of data, and the contract clearly sets out the agency’s rights, why can’t an agency use a system like this to, for example, deter dangerous driving behaviour that could damage their valuable property?

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