By Park Si-soo
Deutsch Finance, Meritz Capital, Orix Capital Korea and 11 other car rental companies were ordered to revise unfair contract terms that force customers to share the companies’ financial losses, according to the fair trade regulator, Wednesday.
Citing illegitimate terms, these companies imposed “exorbitant” penalties on customers who terminated their rental contracts halfway through the term or those who returned vehicles later than scheduled, said the Fair Trade Commission (FTC) in a press release. They also penalized those who canceled a car rental before signing a contract, it said.
The other companies were Hyundai Capital, KB Capital, Aju Capital, CNH Lease, JB Woori Capital, BNK Capital, Shinhan Card, Samsung Card, Lotte Rental, SK Networks and AJ Rentacar, according to the FTC.
“These companies forced customers to share costs they were not responsible for,” the FTC said in a press release. “Major players of the market were found to have made up for their losses this way so we launched an investigation into them.”
Each of the companies has more than a 1 percent market share, the regulator said, adding the car rental market is expanding at an average of 15 percent each year.
As of May, there were 1,034 car rental companies, including 50 financial companies licensed for car rental services. The domestic car rental market was estimated at 2.7 trillion won in 2012. It jumped to 3.1 trillion won in 2013 and 3.7 trillion won last year, according to data from the Korea Rent-A-Car Association that represents 660 car rental companies and agencies.
“We will tighten monitoring on the car rental market because it’s growing rapidly,” said an FTC investigator. “We will also upgrade related regulations to prevent customers from sustaining unjustified losses.”