Avis Budget Group.'s Zipcar is being hit with a hefty fine after federal regulators discovered the company was letting users rent vehicles that had open recalls.
The car-sharing network was ordered to pay a $300,000 civil penalty, half of which must be paid upfront, as part of a consent order for violating the National Traffic and Motor Vehicle Safety Act, the National Highway Traffic Safety Administration (NHTSA) said Monday.
Investigators determined that the company "rented certain unremedied recalled vehicles in violation of the Safety Act" during 2017 and 2018, according to the consent order.
Zipcar – which dubs itself the world’s leading car-sharing network – allows users to rent cars by the hour or the day in cities and campuses worldwide.
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"Vehicles with open, unrepaired recalls pose a safety risk to everyone on the road," NHTSA acting Administrator Ann Carlson said.
Zipcar is also required to submit an audit report of all of its vehicles with an open recall at any time within 150 calendar days after the effective date of the consent order. It must also provide updates to Zipcar’s employee training materials about the agency's compliance obligations.
Updates to the company's written recall compliance procedures must also be reviewed by outside counsel before being submitted to NHTSA for review, and it must include feedback from the agency before taking effect.
Representatives for Zipcar did not respond to FOX Business' request for comment.
The company said in a statement to The Associated Press that it prioritizes members' safety and takes recalls very seriously. It also noted that only 50 out of its global fleet of 12,000 cars were in violation of a 2017 recall.
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Zipcar, which agreed to the consent order, said that it made improvements to its recall policies as well as its procedures since 2018, which is when the agency opened its investigation, according to NHTSA.
This includes implementing a real-time automated documentation system for recalled vehicles and making such vehicles unavailable for new rental reservations as well as addressing the recall remedy status of vehicles and release of vehicles post-remedy, the agency continued.
Zipcar also told the agency that it increased the frequency of communications between its home office and field offices about grounded vehicles and recall remedies.
To date, this marked the agency's first enforcement action against a rental car company for recalls. However, Carlson noted that the agency will "continue to use the full scope of its enforcement authorities to protect the public from safety defects in their personal vehicles or in a vehicle they rent."
