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Credit hire business ‘misled customers’

Credit hire company Compass Claims will change its advertising and sales practices after an Australian Competition and Consumer Commission (ACCC) investigation.

Credit hire businesses provide hire cars to drivers who are not at fault in car accidents, and Compass is one of the largest in Australia.

Its customers were told they would not be liable for hire car charges or associated costs, but the ACCC considers this misrepresentation.

“Although Compass waived those charges, its contract required Compass to do so only if it was able to recover the charges from the at-fault party or their insurer,” the watchdog says.

Compass also said consumers would not have to take further steps to recover costs.

In fact, they were required to assist Compass by authorising court action in the consumer’s name, providing witness statements and attending court.

Compass co-operated with the investigation and has made changes to its advertising, call centre procedures and sales practices, to inform consumers of hire charges and their obligation to provide assistance.

“Businesses must not mislead consumers about any additional costs or obligations that may incur when using their services,” ACCC Deputy Chairman Delia Rickard said.

“If consumers are not responsible for an accident, they may be entitled to compensation for the costs of hiring a comparable vehicle while repairs are made.

“Credit hire businesses can help consumers access that compensation. However, consumers should be aware of their obligations to that business if they accept that help.

“The ACCC will review the marketing and sales practices of other credit hire businesses and will pursue businesses that mislead consumers.”

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