Car rental companies across the country have come under scrutiny from consumer advocates in recent weeks as they struggle to comply with new regulations governing how they rent cars.
The latest controversy centers on a car rental company that advertises to rent out vehicles from Texas’ Department of Insurance.
In a video, CarRental.com explains how it operates, and how it plans to get around a few rules in the coming months.
A few months ago, the company was sued by the Texas Consumer Federation, an umbrella group for more than 30 state consumer organizations, after it claimed it was exempt from the state’s insurance regulations.
The lawsuit claimed that the company violated Texas’ motor vehicle insurance regulations by renting vehicles out of state without a valid Texas Insurance Policy.
The group also alleged that CarRent.com and its CEO, Dan Boulud, are acting as brokers and solicitors for insurance companies.
The Texas Department of Transportation, the state agency that enforces the Motor Vehicle Act, did not immediately respond to a request for comment.
The Department of Finance, which regulates the insurance industry, is also investigating the allegations.
But some experts say the car rental industry is not the only industry to face scrutiny from regulators.
The Consumer Federation of America, a trade group, last week asked the US Department of Labor to investigate the industry, which has long been under scrutiny for lax practices in how it sells vehicles to renters.
“We think that the consumer advocacy groups are going to continue to come to the defense of this industry and say, ‘Look, you guys have been in this business for a long time,'” said Paul J. Buell, an attorney at the consumer group.
“There’s a lot of people who are making a lot more money in the insurance market than this industry is making.”
Consumer advocates say the industry is trying to skirt regulations, and are using the new rules to try to get them to do things they haven’t been able to do in the past.
The new rules, called the Automated Vehicle Information Reporting System, or AVIRS, apply to all rental companies operating in the US and Canada.
They require rental companies to provide consumers with the details of their insurance policies, as well as the names and addresses of their brokers and dealers, and they require rental company websites to be updated with information about insurance and vehicle leasing programs.
Consumers in Texas can check their insurance status and see how much money they’ll be paying for a vehicle from CarRenter.com.
But in a statement to the Texas Tribune, the California-based company said it is not required to comply.
“If a customer has requested that their personal information not be disclosed, we will not disclose that information to our customers, because that information is not subject to privacy laws and regulations,” the statement read.
“As of this writing, Carrental.us has not been ordered by the Department of State Health Services to comply to AVIRSS regulations.”
Consumers in New York City and Los Angeles also complained to the city’s insurance regulator in December that the rental company had failed to provide the public with the same level of information about its insurance policies and the amount of money a consumer could expect to be paid.
“What they’re saying is that we can’t know who is in this position because the company doesn’t disclose that, so we’re going to have to trust the insurance company,” said Jonathan P. Goldstein, a New York Insurance Department spokesman.
“And then when they do disclose it, it’s not going to be a very good disclosure.”
Consumer groups say CarRrent.com is using the AVIRAS requirements to avoid the costs associated with providing consumers with additional information, like a vehicle’s ownership status, mileage and the type of insurance the car is covered by.
“This is a great way for companies like CarRotor to avoid having to provide this information,” said John K. Daley, the president of Consumer Watchdog, a consumer advocacy group.
He said the rules also make it difficult for car rental companies in other states to find and rent out the vehicles that are covered by their policies.
“They’re essentially using the existing regulations to do the bidding of the insurance companies that provide them with the vehicles,” he said.
A spokesperson for the Texas Department in the office of Transportation and Utilities told the Texas Observer that Carrental.com has complied with all applicable requirements and has complied in a timely manner.
“Our mission is to ensure that consumers receive the most accurate information regarding vehicle rental arrangements and vehicle prices and the policies that are applicable,” said T.J. O’Brien, a spokesperson for state transportation department.
“CarRental has complied and is compliant with all state and local laws regarding insurance.”
A representative for CarRearnt.com said in a written statement that the car leasing company’s website is updated daily with the information it provides to consumers.
“The information provided to consumers is accurate and up-to-date,” the company said.
The statement did not address