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Nearly 50 People Have Sued Hertz, Claiming They Were Falsely Arrested for Stealing Cars One plaintiff said she spent two weeks in jail.

By Gabrielle Bienasz

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Opinions expressed by Entrepreneur contributors are their own.

Nearly 50 people said in a lawsuit they were wrongly arrested for car theft because of faulty policies from rental company Hertz — and, in some cases, suffered various traumas as a result, according to CNN.

These claims were part of the company's bankruptcy processes, but this suit was filed in Delaware state court after an early June court ruling that it could be moved out of Hertz's Chapter 11 proceedings.

This is one of many legal actions related to an issue from the last few years where claimants say they rented cars lawfully, but then were arrested by police — often at gunpoint — after Hertz filed police reports, NewsNation reported.

The company says it only files police reports after cars are not returned for a lengthy period of time, but there are cases that say Hertz errors have resulted in customer prosecution, per The Los Angeles Times.

One plaintiff, Mary Lindsay Flannery, said she spent two weeks in jail, during which she dealt with bedbugs and physical violence from other folks in her cell, but the case was later dismissed, the lawsuit said, per CNN.

This lawsuit says Hertz's operational issues — including not keeping track of inventory, saying customers have not paid when they have, not ameliorating reports to the police, and failing to document reservation extensions — led to them being wrongly arrested and jailed, and even though charges were typically dropped, they left economic or emotional scars, the lawsuit added, per the outlet.

In an April interview, Hertz CEO Stephen M. Scherr said "several hundred" people had been "impacted," by the issue of being incorrectly marked as having stolen cars, on CNBC's "Squawk Box."

"It's not acceptable to Hertz to have any customer, a single customer sort of caught up in some of what's happened," he said.

Scherr became CEO of Hertz in late February 2022, after a difficult period for the company, where it filed bankruptcy after the pandemic hit.

"It's unfortunate these were vehicles that were reported as stolen. The theft report was withdrawn when they were found yet these people got caught, you know, in a moment where that, you know, rescission wasn't recognized," Scherr added.

Hertz's bankruptcy proceedings lasted from roughly March 2020 to June 2021. The company was able to keep most of these wrongful arrest claims with its bankruptcy proceedings — where there is no jury, Bloomberg reported.

However, a judge ruled in early June people could hold the company accountable outside of bankruptcy court for the wrongful arrests, the outlet added reported.

Hertz told Entrepreneur it planned to appeal this decision. "In parallel, we are reviewing and considering each claim brought against Hertz on its individual merits," the statement said.

"In furtherance of our stated commitment to resolve situations in which customers have been harmed by our actions, we have begun extending settlement offers to dozens of claimants and will continue to do so on a case-by-case basis," it added.

      Other plaintiffs described, according to CNN, losing a job and being denied medication while in jail. ABC News in Philadelphia broke this story in 2018, and there have been multiple lawsuits since then and settlements from Hertz.

      In response to one 2019 story from ABC Tampa Bay, a Hertz spokesperson said at the time, "False reports of stolen vehicles are extremely rare."

      Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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