ITALIAN COMPETITION AUTHORITY [AGCM] FINES GOLDCAR AND FIREFLY FOR UNFAIR COMMERCIAL PRACTICES

The Italian Competition Authority has recently closed two proceedings against the low cost car rental companies, Goldcar and Firefly (the latter is the low cost brand of Hertz group) and has fined them 2 million euros and 1.6 million euros, respectively.

The commercial practices, sanctioned as "aggressive", consisted in how these companies present the sale of additional services (additional covers to reduce the deposit and/or limit the consumer’s liability for damage) when consumers get the desk for picking up the vehicle already booked online.

In particular, the Authority considers unfair to link this offer to  the significant amount reduction of the security deposit, which in cases assessed by the ICA was particularly high: in some cases the required deposit exhausted the consumer’s credit card limit and in others even exceeded  the line of credit and this unduly influenced consumers to buy such  additional services.

Regarding Goldcar cases  the offer of additional covers was also presented as the best solution to avoid the risk of possible charges for damages or theft of the vehicle without clarifying which damages/events are covered by the CDW (the basic cover included in the  contract). 

According to ICA’s rulings this conduct takes advantage of the weakness of consumer’s position when he picks up the vehicle and provides his credit card’s details on which a high amount is blocked to cover any damages

These proceedings have also allowed to ascertain, for both companies, a second unfair commercial practice: Goldcar presented in an unclearly manner the "Flex Fuel" system associated to “the Smart rate” and provide consumers with poor information about the existence of some administrative fees. As regards Firefly, it failed to provide any information about the criteria used to assess damages on their website.

The fine imposed on Firefly took account of the fact that this company has already reduced the amount of security deposit requested to consumers and made clearer the information about the security deposit.