Hertz Moves to Dismiss Currency Conversion Fee Class Action Lawsuit

Last Friday, Hertz Corp. requested that a currency conversion fee class action lawsuit filed against them in New Jersey federal court be thrown out on the grounds that the current class action allegations involve Hertz foreign subsidiaries, which are technically outside of the court’s jurisdiction. The class action lawsuit alleges that Hertz failed to inform their rental car customers of the currency conversion fee applied to automobiles rented from the company’s European locations.

The currency conversion fee class action lawsuit was filed in February by New Jersey resident Daniel Margulis, who allegedly rented cars from Hertz Italiana and Hertz UK. Margulis alleges that in both these transactions, he was charged a fee to convert his rental charges from local currency to the standard U.S. currency, a fee Margulis alleges he and other Class Members were not informed of.

According to the Hertz class action lawsuit:

“Plaintiff [Margulis] filed suit on behalf of himself and a putative class of customers, alleging that, among other things, Hertz representatives in Europe did not ask him whether he wanted his rental car charges to be converted to U.S. dollars and did not disclose the fee for the currency conversion service. Plaintiff’s complaint asserts four causes of action against Hertz: breach of contract, violation of the New Jersey Consumer Fraud Act, unjust enrichment, and fraud.”

Many competing rental car companies abroad generally allow customers to choose whether they wish to be charged in the countries local currency or in rental car customers native currency. The currency conversion fee class action lawsuit claims that Hertz Corp. automatically converts a rental car bill to the rental car customer’s native currency at an inflated exchange rate.

In the Margulis case, the bill allegedly demonstrates that Hertz conversion fee charged him an exchange rate 4.5 percent higher than the international exchange rate set between the United States and the European countries in which Margulis rented Hertz’s vehicles. The class action lawsuit also alleges that Hertz employees who completed Margulis’ rental transaction refused to convert his rental car bills to euro currency, citing that it was Hertz company policy to charge U.S. debit and credit cards in U.S. currency.

Hertz’ legal counsel submitted a motion for judgment to U.S. District Judge William J. Martini, who is presiding over the case, asking him to dismiss the case on the grounds that the allegations only apply to Hertz Italiana and Hertz UK. According to the class action lawsuit:

“Though it is the parent company, Hertz cannot adequately protect Hertz Italiana and Hertz UK’s interests in this matter because it is a separate and distinct corporate entity and Hertz is not a party to the rental contracts signed by plaintiff at the time of pickup, nor did Hertz impose the currency conversion charges about which plaintiff complains[.]”

In Hertz’s motion for dismissal, the company stated its concern that to move forward with this case would necessitate a change in Hertz Italiana and Hertz UK business structure and transactions. Hertz also stated its concern of the possibility foreign subsidiaries facing additional litigation if the Hertz currency conversion class action lawsuit were not to be dismissed.

Daniel Margulis is represented by James E.Cecchi of Carella Byrne Cecchi Olstein Brody & Agnello PC

The Hertz Currency Conversion Fee Class Action Lawsuit is Daniel Margulis v. The Hertz Corporation, Case No. 2:14-cv-01209 in the U.S. District Court for the District of New Jersey.