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Feds Probe Rental Car Agencies on Recalls

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By Tanya Roth, Esq. on November 29, 2010 11:51 AM

More federal agencies are looking into whether rental car companies are renting potentially dangerous recalled vehicles.

First Sen. Charles Schumer (D-N.Y.) requested that the FTC crack down. Now the issue of rental car companies renting out cars under recall has come to the attention of the National Highway Traffic Safety Administration. NTSA launched an investigation into the practices of rental car companies regarding recalled cars -- propelled in part by stories of injuries and deaths in rental cars under recall.

The NHTSA says it has recently learned of injuries and accidents stemming from recalled cars and it wants to probe further into the problem, reports CNN Money. As noted in a prior post on FindLaw's Common Law, Senator Schumer has also been asking that the FTC change its regulations to force rental car companies to adhere to the same recall practices that car dealerships do: If it's under recall, it can't be sold by dealers and shouldn't be rented by rental car agencies.

The Raechel and Jacqueline Houck case pushed both the NHTSA and FTC to pressure practices by Enterprise Holdings, parent company of National, Alamo and Enterprise. As noted in a prior post on this blog, the Houck sisters died in a fiery crash when the PT Cruiser they had rented from Enterprise hit a truck. The Cruiser had been recalled for a steering hose leak that had the potential to cause a fire. Enterprise admitted liability in the suit and the family of the victims was awarded a $15 million dollar verdict.

According to Enterprise, the company currently places a "hold" on all recalled vehicles until the required work is complete. The company says this is the practice even if a recall notice does not recommend that the car should not be driven until the recall work is finished. CNN Money reports that in January, Enterprise Holdings announced it would take some of the recalled Toyotas out of its rental fleets until the required recall work was completed.

The NHTSA investigation will focus on tracking recalled vehicles from General Motors, Ford and Chrysler. Some of the models NHTSA will investigate include the 2009 Buick Enclave SUV, the 2005-2006 Chrysler Town & Country minivans and the 2010 Ford Explorer.

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