Car rental company has been hit by court case, and owner is now suing
Car rental companies in NSW are facing court proceedings after being accused of using misleading and deceptive advertising to boost their business.
Key points:A court case is being fought over claims car rental company Alamo Car Rentals advertised rental car deals as ‘good for life’ and ‘unlimited mileage’The case comes after a judge gave the company the go-ahead to take legal action against the mediaThe case has been ongoing since February 2018, when a Sydney court judge ruled Alamo’s advertising of its rental car business was misleading.
The Advertising Standards Authority (ASA) has been involved in the case since October, and is expected to hand down a decision by the end of the year.
The Alamo car leasing company was formed in 2011 and its advertising, including its car rental services, was aimed at helping people find car rentals, according to the Australian Securities Exchange (ASX).
“We had an advertising policy that was fairly clear that the advertisements were intended to help people find the car they were looking for,” said Alamo chief executive and founder Paul Whelan.
“We made sure to get all the necessary approvals from the relevant authorities before we ran any advertising, and we did a lot of that with the ASX.”
Mr Whelans said his company was trying to prove that the ads were misleading because he said there was no such thing as a “good for lifetime” car rental.
“Our business model was designed to be extended for the life of your vehicle,” he said.
“So if it gets to that point where you’re looking for a rental car, you’ve got to be pretty sure that you’re going to be able to afford it.”
MrWhelan said his business was struggling to compete in the rental market because of the lack of information about the cars available.
“It was only recently that we were able to get some information on the cars that were available,” he told ABC News.
“There are about 20-odd cars that we can advertise, but we’re not even sure that that’s the number that we’re going out there with.”‘
We’re going on the road’MrWelan said he was frustrated with the lack-of-information and misleading advertising, but added that he was still on the “road to recovery”.
“We are on the right path,” he added.
“This is a business that has had its finances wiped out, but this is the future for our business.”
I think we are going to have to take our time and we’re just going on this road, and if we don’t, we’re in trouble.
“Alamo Car Rental’s owner has filed a complaint with the Victorian Competition and Consumer Commission (VCCC), which is expected in February.
The court case has seen MrWelans step up his fight against Alamo, and he said the business was preparing to fight the charges in court.”
Alamo has been in the media for quite a while and they’ve had some really good publicity, but unfortunately there’s not a lot out there in the community, especially when it comes to rental car companies,” MrWhelans told ABC radio.”
They’re going back and forth in court, so we’re definitely going to do our best to try and get them to go to court.