BBB issues nationwide warning about Payless Car Rental

— -- The Better Business Bureau is issuing a nationwide warning to customers about Payless Car Rental, a major car rental company found at airports across the country.

The BBB says it has received more than 800 complaints about Payless in the past three years and has given the company an F rating. Now the organization is urging attorneys general in four states — California, Florida, New Jersey and Oklahoma — to investigate Payless and its parent company, Avis.

"They have sales practice issues and contract issues and billing issues with consumers," Amie Mitchell, the president of the BBB serving eastern Oklahoma, told ABC News correspondent Gio Benitez.

Questions about fees are a major part of a proposed class-action lawsuit filed against Payless after unhappy customers launched a Facebook group claiming they were charged for services they said they didn't want.

Greg Kohn, one of the lawyers who filed the lawsuit, told ABC News, "Payless has used deceptive business practices in order to lure customers into their shop to rent their vehicles. They use low rates online to get people to use them over other rental agencies, but when you get there, they slam you with additional fees."

One of the lawsuit's plaintiffs, Richard Alexander, a police officer, said he rented a car from Payless in Las Vegas for a six-day family vacation with an online quote of $217 from a third-party website. He says he walked to the counter wearing a police shirt and badge. "The gentleman that waited on us thanked me for my service and offered me a free upgrade," Alexander told ABC News. "I specifically asked him, 'It's going to be $217, right?' I was told yes. I told him, 'I'm covered under my own insurance.' And I believe he was told two or three times I do not need this."

Alexander says he initialed the agreement, expecting to pay $217. But when he returned the vehicle, the total was $528, with charges for, among other things, insurance and roadside service protection, which he said he didn't want.

ABC News producers rent 4 cars: 1 found with 'dangerous' tires

ABC News producers rented four cars from Payless locations in New York and New Jersey and had them inspected by Audra Fordin, founder of Women Auto Know and owner of Great Bear Auto and Body Shop in Flushing, New York. Three of the four cars passed her standard inspection. But the car from the Payless location at John F. Kennedy International Airport, she told ABC News, had four tires that were bald and "dangerous." She found holes and called one tire "a blowout waiting to happen."

ABC News called Payless, which had the car towed. The manager apologized and offered a full refund.

Loss damage waiver insurance included in ABC News producers' bill

But that's not all ABC News encountered while renting from Payless. With two cars, rented from the LaGuardia Airport and JFK offices, producers got exactly what they reserved online: economy cars with no fees for added services. But when producers went to the Newark Liberty International Airport Payless location, asking for a car with no extra charges, they were given a contract that included a $29 per day charge for loss damage waiver insurance. When producers asked the Payless representative about the charge, they were told, "You accepted the total. It comes with it." But the contract that producers were given states in two places that loss damage waiver insurance is optional. Producers were also charged $5.99 per day for roadside service protection. The roadside service plan appears to be optional on Payless' website.

When returning the rental car to the Newark office, producers asked about the loss damage waiver insurance. They were told that if the insurance is taken off, the rate goes up. "You take the insurance, you get a cheaper rate. If you don't, your rate is even three times higher," said the Payless representative. The manager told producers they got a deal, adding, "It's all included in the price under the manager's special when the client doesn't have a reservation."

Payless declined ABC News' repeated requests for an interview. Instead, the company sent a statement that read, "We are concerned about any negative rental experiences that you may have had at Payless. We always strive to provide customers with a positive rental experience, and we take customer feedback seriously. We are investigating your concerns with your experiences to ensure that our employees' statements and conduct always remain consistent with our policies and procedures. The tire problem you described is highly unusual. Safety is a top priority, and we have followed up with the supervisor at that location. While we were encouraged to hear that the Payless employee you spoke with moved quickly to tow the car and provide a refund, we will continue to emphasize and enforce our stringent safety protocols companywide."

Consumer tips before renting a car

The following tips were provided by the BBB to ABC News. Click here for more terms and information on how to file a complaint.

1. Call several firms to find out if the car you want is available and at what price. Rental companies vary widely in their prices. Make sure you are comparing similar sizes, types, locations and dates.
2. Inquire about required fees such as fuel or airport fees and other additional costs. A deposit may be required if you do not have a credit card.
3. Make a reservation, if possible, because unreserved rentals may cost more. Also, call to confirm your reservation, to be certain that the car will be available when you arrive.
4. Read the contract before you sign it. Most firms have written their contracts in plain language for all to comprehend.
5. Check the car before driving away. Be sure that any dents or scratches are noted in the contract, so that you will not be charged for damaging the car.