Budget Rent a Car fraud claims probed by RCMP
Former employees say scams aimed to bilk customers
Budget Rent a Car's Vancouver-area operations are facing increased scrutiny as B.C. Attorney General Shirley Bond confirms provincial agencies are investigating allegations of fraud at several locations.
"There will be a fair process to look at whether the allegations are true or not," Bond said.
"It is being taken very seriously and I don’t accept the fact that consumers should be treated inappropriately in this province and I expect the processes to be rigorous and examine the allegations."
Vancouver area Budget franchises are owned by Syd Belzberg, a prominent businessman who has won awards for philanthropy.
But some of his former employees claim Belzberg makes money by systematically deceiving customers.
"We would consciously lie to people," Dylan Paul told CBC News.
"I will use the word lie and I will use the word swindle. It was by design. I had personal meetings with the owner, with the general manager, and I know how I participated in that. And a lot of times I should have just said, 'No.'"
Former employee Martin Torres tells a similar story.
"It was a big grab of money, like unbelievable — lots of money being made on a daily basis dishonestly. And you were part of it. And finally I got out," he said.
Paul, who managed Budget’s downtown location, says he feels terrible about what he did.
"I’ve had people cry … because they can’t afford [the repairs] ... and we are charging $1,000 for a windshield and it doesn’t cost that," Paul told CBC News.
"And if someone did that to my wife, it would just break my heart. That was the reason I left."
According to Paul, the scam was to slap customers with a bogus charge of at least $300 for minor vehicle damage.
"A car would come in and we would charge the person $1,000 for the windshield and tell them we are going to send it to get repaired," Paul said.
"Thirty minutes after that customer has left, we will rent that car to someone else … without repairing it."
The repair shop that came up with the estimates and repair bills is also owned by Belzberg, but customers were led to believe it was independent.
"We are all operating under the same business concept, business idea, which is find damages and charge people," said Elie Daher, who worked as a customer service representative for Budget’s downtown location for several months.
Graeme Darbyshire, the lead customer service agent in charge of a suburban outlet, says ripping off customers was mandatory.
"It’s Budget’s way or the highway with everything from top to bottom — more so Syd Belzberg’s way."
Darbyshire estimates as much as 70 per cent of the additional charges were unfair.
The former employees say bilking foreigners was Budget’s specialty.
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"We knew one, these are foreigners so the chance of them complaining is very unlikely and two, the language barrier they don’t know," said Paul.
Daher remembers an incident when his manager spotted a wealthy customer from Hong Kong and flagged her to pay more.
"We charged the lady $4,000 a week for renting the car … for a Mercedes C class," he said, adding the rental would normally cost $199 a day, or about $1,400 for seven days.
The employees all worked on commission, so the more they overcharged customers, the more they made.
"If you add up what happened with the dishonest sales tactics, the damage, the stuff like the fuel, it’s easily millions of dollars," Paul said.
Belzberg has declined repeated requests for an interview with CBC News.
But his manager said in an email to CBC News he was "shocked" by the allegations made by former employees.
"We take these allegations very seriously," the email said. "We take great pride in the excellent service we give to our customers. Under no circumstances would we condone any business practices which do not serve the best interests of our customers."
The company earlier said the employee commission system for repairs had been scrapped and vehicle damage would now be assessed by an independent appraiser and repaired at an independent shop, adding that anyone caught misleading customers would be fired.
David Klein, a well-known class action lawyer, says tracking down customers who may have been overcharged could be a challenge.
"Finding all those people from all over North America can be a challenge and could be an impediment to having the matter proceed," he said.
"There are, though, enough people who are local, enough people who are right here in British Columbia, that I think a case would be viable."
The former employees who spoke to CBC News hope things will get cleaned up — but they’re skeptical.
"Even now, with all this coming to light, you don’t have the owner or the [general manager] come out and apologize for it," Paul said.
Budget’s corporate head office in the U.S., which has the power to enforce changes in the Belzberg operation, says the allegations are being investigated.
"When this process is complete, we will then review our options with respect to taking appropriate action," the company said in a statement.