Zipcar Fined $300,000 For Letting Customers Rent Recalled Cars

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Car rental company Zipcar was issued a consent order including a $300,000 fine from the National Highway Traffic Safety Administration for allowing customers to rent cars that were being recalled for safety issues, which is a violation of the National Traffic and Motor Vehicle Safety Act.

Zipcar is the first rental car company to ever receive a consent order from the NHTSA for renting recalled cars, the agency said Monday.

The order mentions 2015-2017 Ford Transit vehicles that were recalled because “the flexible coupling between the transmission and driveshaft” in some of the vehicles “may prematurely deteriorate and crack” as the vehicles gained mileage, which could cause the vehicles to make a moaning noise, vibrate, lose power during driving or move while in park without the parking brake.

The consent order includes a fine of $300,000, half of which Zipcar has to pay upfront, and the other half of which the company can defer by meeting other demands in the consent order.

Zipcar has to submit an audit report of all Zipcar vehicles with open recalls made within 150 days after the consent order is effective as part of the order.

The rental company also has to update its employee training materials related to NHTSA compliance, and any updates to the company’s written recall compliance actions have to be reviewed by external counsel and reviewed by the NHTSA.

The NHTSA opened an investigation into Zipcar in 2018 to look into whether the company rented at least one vehicle that had an open recall, according to the consent order. The investigation was to determine whether the rental car company violated the National Traffic and Motor Vehicle Safety Act. Based on the investigation and information provided by the company, the NHTSA determined “Zipcar rented certain unremedied recalled vehicles in violation of the Safety Act” during 2017 and 2018. Zipcar did not contest the determination, and has worked with the NHTSA on the consent order. Since the start of the investigation, Zipcar has implemented a centralized and automated documentation system for recalled vehicles that is updated in real-time.

“At Zipcar, we prioritize our members’ safety and take manufacturers’ recalls very seriously,” a spokesperson for Zipcar said in a statement to Forbes.

Less than 50. That’s how many of the 12,000 vehicles in Zipcar’s fleet were under a recall order in 2017, according to the statement, which said “Zipcar has implemented new policies and process improvements to address recalled vehicles in its fleet.”

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