Published April 23, 2014
The advent of electronic-toll highways was designed to make traveling down toll roads easier for harried drivers. Goodbye brake lights, lines of cars and fumbling for coins, hello electronic transponders and license plate-readers.
But if you're in a rental car in an unfamiliar city, driving on an e-toll road with no cash lanes can leave you with a nasty charge on your credit card bill.
As the number of cashless e-toll roads has risen, so have the complaints about fees piled on top of fees.
In 2011, Seattle attorney Averil Rothrock launched a class-action suit against Fox Rent A Car and Violation Management Services after she returned from a Denver trip to find a $106 charge on her credit card. The amount reflected two $3 tolls and two $50 "service fees." In the lawsuit, Rothrock complained, "The 'service fee' is nothing other than an illegal scam to collect from customers amounts they do not owe. She contended that Fox gave customers no way to pay the tolls without incurring the egregious fee, and that the two companies "conspired to turn Fox customers' tolls into an illegal profit center for themselves."
Though the case settled almost immediately, Rothrock says, "I get contacted about this all the time by people facing similar issues with car rental companies, leading me to believe that it is a huge problem for consumers."
In 2012, New Yorker Jodd Readick filed a class-action lawsuit against Avis after he was slapped with an irritating "convenience fee" that he believes was left deliberately ambiguous in the fine print of his rental agreement. A similar lawsuit in Florida against Hertz and PlatePass was settled in 2013; the companies were ordered to provide $11 million in refunds.
Maze of fees
When CreditCards.com first wrote about the issue of rental car e-toll booth charges in 2011, disclosures about rental car policies for cashless toll roads were not always clear. One upside of the complaints and lawsuits from consumers is many national rental car companies have largely revamped or clarified the fees they charge customers for using toll systems. In its settlement, for example, Hertz acknowledged the suit "led to changes and modifications being made to Hertz's rental agreement."
Although the increased clarity in rental agreements is a step forward, some drivers still feel outraged by car rental company's toll fees, largely because they often feel like they have no choice but to pay them. While it's simple enough to turn down a rental car company's add-on insurance -- usually you're covered by your own auto insurance -- if you're driving in an area with cashless toll roads, you can't easily do without an electronic toll transponder. Rental car drivers who opt out of the e-toll system, then accidentally drive on a e-toll-only road or fail to find the cash lane in time, will usually be charged with a toll violation, which often includes an additional fee of between $18 and $25 a pop.
Third-party fees tagged on
Even more vexing is that some rental car companies outsource their fee collection to third-party agencies, which tack on their own fees. Although it ostensibly makes the process more efficient -- and allows rental car firms to keep a happy distance from a sometimes-ugly customer service transaction -- customers end up losing.
One of the most widely used agencies, Violation Management Services of Great Falls, Mont., has an "F" rating from the Better Business Bureau in Washington. The BBB says the company showed "a pattern of complaints showing that consumers had unknowingly or did not approve a compliance agreement regarding processing fees relating to vehicle violations from rented vehicles from third-party business contracted with this business." In its response to the BBB, the company said its existence is revealed in rental car agreements, and that it needs to move quickly to protect the fleets of rental car companies from being seized due to unpaid tickets.
Even if you figure out a way to avoid using the car company's e-toll transponder system, you may end up being charged for it anyway. When Sean White, of Hollywood, Fla., rented a car from Budget for a two-week trip to Orlando, he brought along his own portable SunPass prepaid toll device and never turned on the toll device in the rental car. But six weeks later, his American Express card showed a bill for over $79 in tolls. When he disputed the charge, American Express "reversed it, but then a month later charged it back and sent me documentation of tolls collected in Texas with the onboard device in the rental car." When White provided evidence he paid his Florida tolls with his own SunPass -- and he hadn't been near Texas -- the charges were reversed, only to reappear a few months later. The problem took nine months to resolve.
Surviving the e-toll system
For all its hassles, representatives of the rental car and toll management industries naturally believe that the benefits of offering e-toll systems in rental cars outweigh the drawbacks. "I think there's a convenience element that most renters recognize and take advantage of," says Charles Territo, a spokesman for Arizona-based PlatePass. "And the number of toll roads is only going to increase."
Neil Abrams, a rental car-industry constant, adds that rental car companies are justified in tacking on administrative fees because they incur their own costs related to managing tolls and violations. "Rental companies, the big brands, get tens of thousands of violations each month that go unpaid by the renter," he explains. Even with something as simple as charging a renter for a toll, "there's time and labor involved." The cost of all the paperwork adds up.
Abrams acknowledges that toll administrative fees are galling to consumers. Even Dollar-Thrifty's Pass24 program, which aims to create a single flat-fee for toll road usage, can be controversial and confusing because "if you have one toll you get charged the same thing as someone who has $20 in tolls. People see the charges on their charge card and they don't understand what it is, notwithstanding that there's full disclosure on the rental agreement."