Driving This Thanksgiving? Feds Launch Crackdown On Unsafe Rental Cars

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The Federal Trade Commission (FTC) is currently considering a petition filed by the Center for Auto Safety -- and prompted by the Houck case -- that would prevent Enterprise Holdings from renting out vehicles that are still subject to a safety recall.

"The rental car companies have been hiding a dirty little secret – they wait until it's convenient to do safety recall repairs," said Clarence Ditlow, executive director of the Center for Auto Safety. "By auditing auto company recall repair records for cars sold to rental car companies, NHTSA will expose the secret that cars consumers rent have unrepaired safety defects. Using the NHTSA data, the FTC can require rental cars to be parked until fixed for safety recalls."


The Houck Sisters

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Houck Family Wins $15 Million

Raechel and Jacquie Houck rented their Chrysler PT Cruiser in October 2004, one month after Enterprise received a recall notice that an underhood engine fire could result from a possible leak in the vehicle's power steering fluid.

Raechel, 24, and Jacquie, 20, died instantly after their car caught fire and hit an oncoming semi-tractor trailer on Highway 101 in northern California. The sisters had rented the car in Santa Cruz, California to visit their parents in Ventura County.

"You want them to drive something safe, so I sent them the money to go to Enterprise and get a rental car," recalled their father Chuck Houck.

During the court case, the Houck's lawyers discovered that the Enterprise Santa Cruz branch had rented the PT Cruiser three other times since the recall notice.

"I had never imagined in a million years that a company could rent a car they knew was recalled," said the girls' mother, Cally Houck.

During the discovery phase of the case, an Enterprise manager, Thomas Moulton, was asked, "Did you ever consider the possibility that Enterprise should not rent cars to the public after they've received recall notices from the manufacturer?"

"No," responded Moulton.

"Do you think it's a good idea to do that, to rent cars that can catch fire, to the public?" he was asked. "I have no idea," responded the Enterprise manager during the deposition.

The Houcks had earlier turned down a $3 million settlement offer that would have prevented them from talking about their case against Enterprise. After Enterprise's admission of negligence, an Alameda County jury awarded the family $15 million.

Senator Charles Schumer, D.-New York, has called on the FTC to expand on the Enterprise petition from the Center for Auto Safety by requiring all of the rental car companies to repair recalled vehicles before they rent them. "By knowingly renting recalled vehicles, rental car companies have shown a brazen disregard for the safety of their consumers," said Schumer in his letter to FTC commissioner Jon Leibowitz. "This gap in the current law is wrong, and the FTC should immediately fix this problem so that there are no more preventable tragedies. If the FTC can't or won't act, Congress will."

In its return letter to Schumer, the FTC acknowledged that the "alleged practices could pose serious safety concerns to consumers," and said agency staff are still reviewing the issue.

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