Visa's Auto Rental Benefit Should Apply to Zipcar, Says Class Action

Visa is facing a putative class action in California federal court after a cardholder claimed he was wrongly denied benefits for auto rental damage as promised by the credit card company. He alleges he was denied these benefits because he rented from Zipcar, which Visa considers a car share company – not a car rental company.

Visa’s benefit called Auto Rental Collision Damage Waiver protects cardholders.

Visa’s benefit called Auto Rental Collision Damage Waiver protects cardholders by offering reimbursement for damage or theft of rental cars. To activate this benefit, the cardholder must pay for the car rental with their Visa credit card and deny the rental company’s collision damage waiver.

In October 2012, the plaintiff rented a car from Zipcar and incurred damages of about $720. The plaintiff claims that Zipcar would not allow him to deny their insurance policy, but he did deny an additional, optional insurance policy that would cover up to a $750 deductible. After paying the $720 deductible out of pocket, the plaintiff allegedly filed a timely claim through Visa to be reimbursed for the money he paid to Zipcar. However, the plaintiff’s claim was denied on the grounds that Zipcar is a car share company, and the company claimed that the plaintiff was ineligible for the benefit since he did not deny Zipcar’s mandatory insurance policy.

Although Visa does specify that certain cars are ineligible for the Auto Rental Collision Damage Waiver benefit, it does not distinguish between cardholders renting from car rental companies besides Zipcar, and the plaintiff calls Visa’s denial for his claim a “secret, internal policy” not made aware to the public.