Avis and Payless Must Pay $19 Million Over Hidden Fees Now

UPDATE: Avis Budget Group Inc. has been ordered to pay $19 million to settle a class-action lawsuit stemming from allegations that its subsidiary, Payless Car Rental, unlawfully charged customers hidden fees. This ruling comes as rental car customers express growing frustration over service issues and unexpected costs.

The lawsuit, filed in September 2016 and reaching a preliminary settlement this year, claims that Payless improperly charged renters for the Gas Service Option (GSO) and Roadside Protection (RSP) from January 1, 2016, to November 25, 2023. According to Claim Depot, affected consumers could receive up to $20 per rental for GSO fees and $12 for RSP fees.

“Rental car companies have been facing significant challenges, both in terms of vehicle supply and staffing,” said Michael Taylor, J.D. Power Travel Intelligence Lead. “Rising costs and long lines at the airport are negatively impacting customer satisfaction.”

Under the settlement terms, individuals who rented from Payless in the U.S. during the specified period and paid for GSO or RSP fees will be eligible for reimbursement. The settlement does not require Payless to admit wrongdoing, as the company aims to enhance transparency in its sales process.

The case, identified as Bacon et al. v. Avis Budget Group, Inc. et al. (Case No. 2:16-CV-05939-MCA-KM), highlights a growing concern in the car rental industry. Customers have reported unclear communication regarding optional add-on services, often charged even when declined.

Settlement Details:
– Total Settlement Fund: $19,000,000
– Class Period: January 1, 2016 – November 25, 2023
– Maximum Per-Rental Payout: Up to $20 (GSO), Up to $12 (RSP)
– Eligibility: U.S. and Canadian residents who rented from Payless during the class period
– Payment Mechanics: No claim form required for most; payments will be issued automatically unless opted out

The deadline for opting out or selecting a digital payment method is November 10, 2025, with a fairness hearing scheduled for December 2, 2025.

Consumer advocate Christopher Elliott emphasized the importance of clear communication, stating, “Car rental companies are quietly raising revenue through add-on charges, and recent litigation shows just how costly it can be to consumers.”

This settlement raises questions about the future of ancillary fees in the car rental market. As companies like Avis seek to maximize profits through add-ons, they must now navigate increased scrutiny and potential legal risks.

For investors, the $19 million settlement may seem small relative to Avis Budget Group’s overall revenue, but the operational changes and reputational risks could have significant implications for future earnings. Analysts will be watching closely to see how the company adapts its revenue model in response to stricter consumer consent rules.

As this situation unfolds, customers and investors alike are urged to stay informed about developments in the car rental industry and the implications of this landmark case.