What practices of Budget did the Federal Trade Commission (FTC) investigate?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ing consent orders pertaining to Budget franchises and the Network.
In the Matter of Budget Rent A Car System, Inc. (Federal Trade Commission Docket No. C-4212). The Federal Trade Commission ("FTC") undertook an investigation of Budget's practices alleging that Budget engaged in unfair and deceptive practices related to fuel charges imposed upon renters who drive less than 75 miles. As part of a Consent Agreement, Budget agreed to modify disclosure language regarding fuel-related charges. The Consent Agreement requires Budget to disclose expressly or by implication any fuel-related charges, fees, or costs relating to the rental of any vehicle in marketing and promotional materials. Further, Budget is required to disclose clearly and conspicuously at the time of the rental transaction any fuel-related charges, fees, or costs, including any fuel-related charges, fees, or costs that a renter who drives the vehicle less than any specified amount may incur and the manner in which a renter can avoid such fuel-related charges. On January 2, 2008, the FTC signed the Decision and Consent Order. Budget is obligated to comply with the Consent Order until January 2, 2028. The Consent Order is included in Exhibit C of this disclosure document.
Budget Actions Concluded Within the Past 10 Years
The following concluded actions involved Budget, the Predecessor, or current affiliates of Budget that are offering franchises under the "Budget" trademark.
Kirit Bakshi v. ABCR Avis Budget Group, et als. – (United States District Court for the Eastern District of Michigan, Case No. 2:20-cv-10419-DML-MJH) On February 18, 2020, Plaintiff filed a complaint alleging violations of the Michigan Consumer Protection Act, California Unfair Business Practices (Bus. & Prof. Code Section 17200) and the New Jersey Consumer Fraud Act. Plaintiff alleges ABG/Costco fraudulently, uniformly, routinely and systematically imposed unauthorized and/or specifically declined charges on the credit and/or debit cards of their rental customers across the Country. The plaintiff's original complaint was dismissed for failure to plead an amount in controversy ($75k)
sufficient for federal court jurisdiction. Later, the plaintiff failed to file an amended complaint in a timely manner which could have led to a formal dismissal of the complaint by the court. On August 27, 2020, the pro se plaintiff filed an order to show cause ("OTSC") claiming he was not aware of the court's prior order dismissing his claim. The parties settled this case on December 2, 2022 for $20,000 and the case was closed on December 14, 2022.
Faiz Ahmed, d/b/a Premium Autos, LLC and Ahsan Syed, d/b/a ARS, Inc. v. Avis Rent A Car System, Inc., a Delaware Corporation, Budget Rent A Car System, Inc., a Delaware Corporation, Avis Budget Group, Inc., a Delaware Corporation and DOES 1-100, Inclusive (Superior Court for the State of California for the District of Rancho Cucamonga, County of San Bernardino, Case No. CIVRS 1308871).
Source: Item 3 — LITIGATION (FDD pages 12–16)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Federal Trade Commission (FTC) has investigated Budget's practices on two occasions. In one instance, the FTC investigated Budget for allegedly engaging in unfair and deceptive practices related to fuel charges imposed on renters who drive less than 75 miles. As a result of a Consent Agreement signed on January 2, 2008, Budget was required to modify its disclosure language regarding fuel-related charges and must comply with the Consent Order until January 2, 2028. The agreement mandates that Budget clearly disclose any fuel-related charges in marketing materials and at the time of the rental transaction, including charges incurred by renters driving less than a specified amount, and how renters can avoid these charges.
The FTC also investigated Budget, specifically Budget Rent-A-Car Systems Inc., in 1996 for deceptive practices related to failing to disclose potential charges to customers for "loss of turnback" values exceeding the cost of repairs when customers returned cars with significant damage. The FTC alleged that Budget sought to collect the amount lost because damaged vehicles could not be resold to the manufacturer at a higher price than retail.
As a result of the 1996 investigation, Budget was required to pay $75,000 for consumer redress. Additionally, if Budget intended to charge consumers for "loss of turnback" values again, the order required clear disclosure in rental contracts and reservation systems regarding consumers' liability for damage or loss exceeding the actual cost of repairs or the fair market value of the vehicle. Budget was also required to post this information at rental locations and distribute a copy of the order to managers responsible for collision or theft damages from renters. This Consent Order terminated on June 17, 2016.