The Federal Court has fined Europcar $100,000 for misleading customers about the scope of protection when they buy extra insurance.

The ruling is a victory for the Australian Competition and Consumer Commission (ACCC), which took action in 2014 under a review of the car rental industry.

The court says customers were misled when they bought extra cover based on information on Europcar’s website, which said their liability for accident damage would be limited to $3650 or less. The rental agreement states otherwise.

“The court found that [from December 2013 to July 3 2014] Europcar represented that under its standard car rental contract a customer’s liability for loss or damage to the rental vehicle or damage to third-party property would be limited to the applicable ‘damage liability fee’,” the ruling says.

“The court found Europcar’s conduct was misleading because, apart from breach of the car rental contract, customers would also be fully liable for loss or damage, in an unlimited amount, in circumstances including damage caused by driving a commercial vehicle in reverse, overhead damage, underbody damage and water damage to the rental vehicle.”

ACCC Deputy Chairman Michael Schaper says the ruling sends a strong message.

“This decision is an important one, because it makes it clear to car rental companies that they cannot simply rely on contractual terms to hold consumers liable for any and all damage that may occur during a rental period, regardless of the circumstances,” he said. “Terms in standard-form rental agreements must be fair.”

Europcar has since removed the misleading information from its website and amended its standard rental agreement to remove unfair contract terms.

Europcar has about 12.5% of the consumer car rental market in Australia, and made about $172.4 million revenue in 2014, according to court documents.