Europcar faces an accusation of fraudulently overcharging customers for repairs as Trading Standards raided its UK head office.
Evidence obtained by the Daily Telegraph alleges the firm’s UK arm may have profited to the tune of millions of pounds by inflating the cost to consumers of windscreens and other repairs by up to 300%.
Trading Standards is investigating the firm over billing concerns including overcharging for repairs, it was revealed.
Legal experts described Europcar’s actions as “serious” and warned its repairs policy could be in breach of the Fraud Act 2006, as well as the Consumer Rights Act 2015.
The company could face a fine of up to 10% of its turnover if it is found guilty of fraud by misrepresentation.
However, if the firm is found to have systemically overcharged customers it could potentially be hit with a class action.
When a customer brings a car back with a scrape, which falls outside their insurance cover, Europcar bills them for an amount it said was the cost of the repair and adds an administration fee.
Evidence, seen by the newspaper, suggests that some of the repair prices were grossly inflated via secret pre-agreed deals between Europcar and suppliers.
Europcar agrees the price and a margin which it gets to keep, and customers are invoiced for the total ‘cost’ of the work, including the pre-agreed margin.
When the bill is paid the repair supplier issues Europcar with a second invoice, which shows the true cost of the work.
One customer claimed they were billed three times more than the actual cost of a windscreen on their hire vehicle.
A spokesman for Europcar said: “Europcar takes the allegations very seriously and is conducting a thorough internal investigation.
“The company is co-operating fully with Trading Standards in its investigations. It can make no further comment at this point.”
The investigation is focused on the UK branch and Europcar, which operates in 140 countries worldwide, has not said whether its offices abroad are operating the same rules.