You've just rented a car and given the attendant your credit card. Any idea where that card number goes?
You might want to read the fine print.
Since 2008, several of the nation's largest car-rental companies have shared rental and credit card information with a division of American Traffic Solutions, the nation's largest operator of speed-limit and red-light cameras.
As a result, many renters have opened up their credit card statements and been startled to find they've been charged by the company, ATS Processing Services, for a traffic infraction they never knew they'd committed, along with a $30 administrative fee.
Fines generated by red-light and speed cameras run from as little as $50 to more than $1,000. Some states ban any reporting to insurance companies, but most don't.
The arrangement has some renters surprised and angry, however.
A more direct route for charges
The deal was struck for a simple enough reason: The old way was a mess.Not long ago, Hertz received hundreds of thousands of tickets annually worth millions of dollars in fines, says spokeswoman Paula Rivera. Hertz would pay those tickets, try to figure out who was renting the vehicle at the time and then go after the renter (usually charging his or her credit card and adding a $20 service charge), Rivera says.
Under the new arrangement, when an ATS camera snaps a picture or video of a car, ATS Processing Services figures out if it's a rental car. If it is, the company either refers the alleged violator's name and information to authorities, who send a ticket in the mail, or pays the fine and then charges the renter's credit card along with a $30 fee, explains James Tuton, ATS' chief executive officer.
"We help redirect the fine back to the person who was driving the vehicle and committed the offense," Tuton says.
The $30 administrative fee is justified because "we have to process thousands of pieces of mail," electronic and otherwise, every day, Tuton says. "We have a level of risk, too," in instances in which the company pays the fine first and then tries to get reimbursed later.
Accelerating past due process?
ATS cameras are used by more than 200 cities and other government entities. The company owns and operates the equipment and manages the resulting traffic tickets, either for a share of the fines generated or for a per-camera fee.Some frequent car renters have complained about the arrangement on sites such as FlyerTalk.com, saying ATS essentially acts as both a prosecutor and judge. A privacy advocate likewise was concerned about the arrangement.
"I think the biggest problem with the program is that it removes due process from the equation for the customer," says John Verdi, a senior counsel for the Electronic Privacy Information Center, or EPIC. "Typically, folks are able to challenge any violations," whether they're moving violations or parking violations, before any fine is paid, Verdi says. "Here, that process gets short-circuited."
Just because the car-rental contract warns of the arrangement in the fine print doesn't make it right, he adds. "Courts tend to frown on private contracts that pre-empt" a person's day in court, he says.
Continued: 'Tacking on the fee was one issue'