Zipcar Must Face Late Fee Challenge

Zipcar must face federal claims that it charges excessive late fees of $50 an hour, a federal judge has ruled.

U.S. District Judge Thelton Henderson refused last week to dismiss a class action accusing Zipcar of unfair competition and violation of the Consumer Legal Remedies Act.

Zipcar, an on-demand short-term car rental service, charges up a maximum of $150 for customers who are tardy returning cars.

Gabriela Bayol, admitted she returned her car late and paid the fee, but she sued claiming the fees were unconscionable and unfair.  She argued the fees bear no reasonable relation to Zipcar’s actual damages.

Henderson rejected Zipcar’s motion to dismiss in a brief order Jan. 29.  Zipcar had argued that her factual claims were thin and that the late fees did not amount to liquidated damages.  But Henderson said the late fees are liquidated damages, “because they can readily be determined from the contract at the time of breach.”

Bayol asks for an injunction to block the late fees and refund of the charges.

Case:  Bayol v. Zipcar, No. 14-cv-2483TEH

 

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