FTC Staff Comment to the Hon. Peter M. Sullivan Concerning Ch. 784 New York Laws Regulating Auto Rentals

26 FEDERAL PlAZA, 22nd FL.
NEW YORK, N.Y. 10278
(212) 264-1200
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
NEW YORK REGIONAL OFFICE 	COMMISSION AUTHORIZED
V890023
March 	6, 	1989
The Honorable 	Peter M. 	Sullivan
New 	York Assembly
Community Office
2 	William 	Street
White 	Plains, 	New 	York 	10601
Dear Mr. 	Sullivan:
The 	staff 	of 	the 	Federal 	Trade 	Commission 	is 	pleased 	to
have 	the 	opportunity 	to 	respond 	to 	your 	request 	for 	comment
on 	the 	Act 	of 	Dec. 	29, 	1988, 	ch. 	784 	N.Y. 	Laws 	("the 	Act"),
which 	becomes 	effective 	on 	April 	1, 	1989. 1 	We 	are 	providing
these 	remarks 	in 	response 	to 	your 	letter 	of 	December 	28,
1988, 	suggesting 	that 	the 	New 	York 	State 	Legislature 	may
consider 	amendments 	to 	this 	law 	during 	this 	legislative
session. 	Our 	comment 	addresses 	several 	aspects 	of 	the 	new
law 	that may 	adversely 	affect 	consumers. 	We 	would 	be 	pleased
to 	offer 	additional 	assistance 	on 	any 	particular 	amendments
that 	are 	offered.
The 	Act 	amends 	the 	New 	York 	General 	Business 	Law 	in
several 	significant 	ways. 	First, 	the 	Act 	limits 	the 	methods
automobile 	rental 	companies 	may 	employ 	in 	calculating 	base
rental 	charges 	and 	in 	advertising 	those 	prices. 	Second, 	it
alters 	the 	current 	methods 	of 	allocating 	the 	costs 	and 	risks
of 	damage 	to 	(or 	theft 	of) 	a 	rental 	vehicle. 	Finally, 	it
prohibits 	rental 	car 	companies 	from 	requiring 	renters 	to
provide, 	during 	the 	term 	of 	the 	rental 	agreement 	or 	pending
resolution 	of 	any 	dispute, 	any 	security, 	deposit, 	or 	payment
for 	damage. 	We 	are 	concerned 	that 	parts 	of 	these 	provisions
may 	result 	in 	increased 	costs 	to 	consumers 	who 	rent 	automo-
1 	These 	comments 	are 	the 	views 	of 	the 	staff 	of 	the 	New
York 	Regional 	Office 	and 	the 	Bureau 	of 	Consumer 	Protection 	of
the 	Federal 	Trade 	Commission. 	They 	are 	not 	necessarily 	the
views 	of 	the 	Commission 	or 	any 	individual 	Commissioner.
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The 	Honorable 	Peter M. 	Sullivan
March 	8, 	1989
biles 	without 	providing 	significant 	benefits 	to 	the 	majority
of 	automobile 	renters 	or 	to 	the 	public 	at 	large.
The 	Federal 	Trade 	Commission 	is 	charged 	with 	promoting
competition 	and 	protectin~ consumers 	from 	unfair 	and 	decep-
tive 	commercial 	practices. 	In 	fulfilling 	this 	mandate, 	the
staff 	of 	the 	Federal 	Trade 	Commission 	often 	submits 	comments,
upon 	request, 	to 	federal, 	state, 	and 	local 	governmental
bodies 	to 	help 	assess 	the 	competitive 	and 	consumer 	welfare
implications 	of 	pending 	policy 	issues. 	In 	enforcing 	the
Federal 	Trade 	Commission 	Act, 	the 	Commission 	has 	gained
considerable 	experience 	in 	analyzing 	the 	impact 	of 	various
private 	and 	governmental 	restraints 	on 	competition 	and 	the
costs 	and 	benefits 	to 	consumers 	of 	these 	restraints.
The 	Commission 	and 	its 	staff 	have 	considered 	other
matters 	involving 	the 	car 	rental 	industry. 	The 	Commission
recently 	commented 	on 	Guidelines 	prepared 	by 	the 	National
Association 	of 	Attorneys 	General's 	Task 	Force 	on 	Car 	Rental
Industry Advertising 	and Practices 	("NAAG Guidelines,,).3 	The
advertising, 	pricing, 	and 	allocation of 	liability portions 	of
the 	Act 	are 	very 	similar 	to 	portions 	of 	these 	NAAG 	Guide-
lines.
Pricing 	and 	Advertising 	Restrictions
The 	Act 	states 	that 	any 	fee 	that 	consumers 	generally
must 	pay 	should 	be 	reflected 	in 	the 	total 	advertised 	price
rather 	than 	being 	stated 	separately. 4 	This 	requirement,
referred 	to 	as 	"bundling," 	apparently 	is 	directed 	toward
2 	~ 	15 	U.S.C. 	§ 	41 	et 	seq.
3 	Letter 	from 	the 	Federal 	Trade 	Commission 	(Commis-
sioner 	Strenio 	not 	joining) 	to 	Robert 	T. 	Stephan, 	Attorney
General, 	Kansas 	(February 	24, 	1989). 	A 	copy 	is 	attached.
The 	Guidelines 	will 	be 	further 	considered 	by 	the 	Attorneys
General 	at 	their March meeting.
4 	"A 	rental 	vehicle 	company 	shall 	not 	charge 	in
addition 	to 	the 	rental 	rate, 	taxes 	and 	mileage 	charge, 	if
any, 	any 	fee 	which must 	be 	paid 	as 	a 	condition 	of 	renting 	the
vehicle, 	such 	as, 	but 	not 	limited 	to, 	required 	fuel 	or
airport 	surcharges, 	nor 	any 	fee 	for 	transportation 	to 	the
location where 	the 	rental 	vehicle 	will 	be 	delivered." 	Act 	of
1988, 	Pub. 	L. 	No. 	784, 	§ 	396.z.10(a).
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The 	Honorable 	Peter M. 	Sullivan
March 	8, 	1989
preventing 	car 	rental 	firms 	from 	advertising 	base 	rental
rates 	that 	do 	not 	reflect 	certain 	charges, 	such 	as 	fuel
charges, 	surcharges, 	and 	airport 	access 	fees, 	that 	some
consumers, 	at 	least 	in certain 	locations, 	must 	pay. 	We 	agree
that 	it 	may 	be 	an 	unfair 	or 	deceptive 	act 	or 	practice 	for 	a
company 	to 	fail 	to 	disclose 	unavoidable 	charges 	prior 	to
taking 	reservations 	for 	rental 	cars. 	The 	bundling 	approach
adopted 	by 	the· Act, 	however, 	may 	be 	unnecessary 	to 	protect
consumers 	from 	deception 	or 	unfairness. 	For 	instance, 	it 	is
not 	clear 	why 	an 	advertisement 	stating 	the 	availability 	of 	a
vehicle 	for 	"$25 	per 	day 	plus 	a 	$12 	fuel 	charge" 	-- 	appar-
ently 	forbidden 	by 	the 	Act 	-- 	is 	more 	deceptive 	or 	unfair
than 	an 	advertisement 	stating 	the 	rate 	as 	"$37 	for 	first 	day;
$25 	for 	each 	succeeding 	day" 	-- 	which 	apparently 	would 	be
acceptable 	under 	the 	Act. 	Nor 	is 	it 	clear 	that 	consumers
would 	be 	misled 	as 	to 	the 	total 	cost 	of 	car 	and 	fuel 	by
either 	advertisement. 	It 	is, 	of 	course, 	desirable 	that
consumers 	have 	material 	information 	on 	rental 	prices 	before
they 	sign 	a 	. rental 	agreement. 	They 	can 	obtain 	that
information 	from 	a 	variety 	of 	sources, 	however, 	including
advertising, 	conversations 	when 	reserving 	a 	rental 	vehicle,
and 	from 	the 	company 	representative 	at 	the 	rental 	counter.
Adoption 	of 	the 	requirement 	that 	any mandatory 	fee 	must
be 	included 	in 	the 	total 	advertised 	price may 	reduce 	consumer
welfare 	in 	several 	ways. 	This 	requirement 	may 	increase 	the
cost 	of 	advertisements 	containing 	price 	information 	because
the 	bundling requirement, 	coupled with differences 	in 	charges
assessed 	by 	franchisees 	and 	in 	surcharges 	imposed 	by 	various
airports, 	may make 	it 	difficult 	for 	some 	car 	rental 	companies
to 	build 	these 	fees 	into 	nationally 	advertisable 	rates. 5
This 	may 	result 	in 	reduced 	price 	promotion, 	and 	lead 	to
higher 	prices. 	Since 	numerous 	economic 	studies 	have 	demon-
strated 	that 	price 	advertising 	enhances 	~ompetition 	and
5 	The 	NAAG 	Car 	Rental 	Task 	Force 	recognized 	this
possibility. 	National 	Association 	of 	Attorneys 	General,
Task 	Force 	on 	Car 	Rental 	Industry 	Advertising 	and 	Business
Practices, 	Preliminary Report 	(June 	19, 	1988) 	at 	8.
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The 	Honorable 	Peter M. 	Sullivan
March 	8, 	1989
lowers 	prices,6 	we 	suggest 	caution 	in 	imposing 	any 	require-
ments 	that may 	discourage 	price 	advertising. 7
Lessor 	Liability
The 	Act 	also 	makes 	significant 	changes 	in 	the 	alloca-
tion 	of 	the 	risk 	that 	a 	rental 	vehicle 	will 	be 	damaged 	or
stolen. 	The 	Act 	requires 	car 	rental 	companies, 	as 	an
integral 	(and 	therefore 	not 	separately 	billable) 	part 	of
every 	rental 	transaction, 	to 	assume 	responsibility 	for 	losses
in 	excess 	of 	$100 	in 	most 	situations, 8 	and 	prohibits 	the
6 	~, 	e,g., 	Schroeter 	et 	al., 	Advertising 	and
Competition 	in 	Routine 	Legal 	Service 	Markets: 	An 	Empirical
Investigation, 	36 	J. 	Indus. 	Econ. 	49 	(1987); 	Cleveland
Regional 	Office 	and 	Bureau 	of 	Economics, 	Federal 	Trade
Commission, 	Improving 	Consumer Access 	to 	Legal 	Services: 	The
Case 	for 	Removing 	Restrictions 	on 	Truthful 	Advertising,
Federal 	Trade 	Commission 	Staff 	Report 	(1984); 	Kwoka,
Advertising 	and 	Price 	and 	Quality 	of 	Optometric 	Services, 	74
Am. 	Econ. 	Rev. 	211 	(1984); 	Cady, 	An 	Estimate 	of 	the 	Price
Effects 	of 	Restrictions 	on 	Drug 	Price 	Advertising, 	14 	Econ.
Inquiry 	493 	(1976); 	Benham, 	The 	Effects 	of 	Advertising 	on
the 	Price 	of 	Eyeglasses, 	15 	J. 	L. 	& Econ. 	337 	(1972).
7 	Besides 	potentially 	discouraging 	price 	advertising,
the 	Act 	may 	lead 	to 	consumers' 	rentals 	at 	some 	locations
subsidizing 	rentals 	at 	other 	locations. 	For 	example, 	if
rental 	agencies 	are 	forced 	to 	bundle 	airport 	access 	fees 	into
their 	national 	base 	rental 	fee, 	customers 	renting 	automobiles
near 	airports 	that 	have 	no 	such 	fees 	(such 	as 	the 	three
metropolitan 	New 	York 	City 	airports) 	will, 	in 	effect, 	subsi-
dize 	those 	renting 	automobiles 	near 	airports 	that 	do.
8 	Section 	396-z.3 	provides 	that 	an 	"authorized 	driver"
-- 	defined 	as 	"( i) 	the 	person 	to 	whom 	the 	vehicle 	is 	rented
if 	a 	licensed 	driver; 	(ii) 	such 	person's 	spouse 	or 	child 	if
licensed 	and 	at 	least 	eighteen 	years 	of 	age; 	(iii) 	such
person's 	employee, 	employer 	or 	co-worker 	if 	engaged 	in
business 	activity 	with 	the 	renter 	and 	if 	a 	licensed 	driver;
(iv) 	any 	person 	who 	operates 	the 	vehicle 	during 	an 	emergency
situation; 	or 	(v) 	any 	licensed 	driver 	expressly 	listed 	on 	the
rental 	agreement 	as 	an 	authorized 	driver" 	-- 	may 	be 	held
liable 	(in 	excess 	of 	$100) 	only 	for 	damage 	or 	loss 	caused
intentionally 	by 	an 	authorized 	driver; 	resulting 	from 	an
(continued ... )
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The 	Honorable 	Peter M. 	Sullivan
March 	8, 	1989
offering 	of 	a 	separate 	Collision 	Damage 	Waiver 	("CDW").9 	In
practical 	effect, 	legislative 	restriction 	of 	the 	offering 	of
a 	distinct 	COW 	product 	is 	tantamount 	to 	mandating 	that 	car
rental 	companies 	bundle 	COW 	coverage 	into 	every 	car 	rental
transaction. 10 	Any 	legislatively 	imposed 	bundling 	require-
ment 	will 	restrict 	consumer 	choice 	among 	COW-like 	coverages
of 	rental 	cars,ll 	resulting 	in 	some 	consumers 	having 	to 	bear
8( ... continued)
authorized 	driver's 	willful 	or 	wanton 	misconduct, 	intoxi-
cation 	or 	drug use; 	or 	that 	occurs 	while 	an 	authorized 	driver
is 	participating 	in 	an 	organized 	speed 	racing 	competition,
carrying persons 	or 	property 	for 	hire, 	or 	committing 	a 	felony
or 	other 	criminal 	act 	in 	which 	the 	damage 	or 	loss 	is 	caused
by 	the 	criminal 	activity. 	Act 	of 	1988, 	Pub. 	L. 	No. 	784,
§ 	396-z.3.
Our 	reading 	of 	the 	Act 	leaves 	us 	uncertain 	as 	to 	the
applicability 	of 	Section 	396-z.3 	to 	an unauthorized driver 	or
to 	a 	renter 	that 	permits 	an 	unauthorized 	person 	to 	drive 	the
vehicle. 	The 	legislature 	may 	wish 	to 	adopt 	appropriate
clarifying 	amendments.
9 	The 	Act 	further 	provides 	that 	"no 	rental 	vehicle
company 	shall. 	. 	agree 	for 	a 	charge, 	to 	waive 	any 	claims
against 	an 	authorized 	driver 	for 	any 	damage 	to, 	or 	loss 	of,
the 	rental 	vehicle 	. 	"Act 	of 	1988, 	Pub. 	L. 	No. 	784,
§ 	396-z. 5. 	As 	the 	Act 	is 	presently 	constituted, 	the 	COW
sales 	ban 	exposes 	most 	consumers 	only 	to 	$100 	of 	uninsured
risk. 	If, 	however, 	the 	Act 	were 	amended 	to 	permit, 	by
contract 	or 	otherwise, 	the 	allocation 	to 	consumers 	of 	greater
liabili ty 	for 	damage 	to 	rental 	vehicles, 	we 	think 	the 	COW
sales 	ban 	would 	unnecessarily 	impose 	substantially 	greater
hardship 	on 	some 	consumers.
10 	Hereinafter 	we 	refer 	to 	measures 	that 	would
restrict 	the 	offering 	of 	a 	distinct 	COW 	product 	as 	"COW-
bundling" 	measures, 	in 	recognition of 	their 	practical 	effect.
11 	These 	options 	include 	purchasing 	no 	insurance 	and
assuming 	the 	full 	risk 	("going 	naked"), 	purchasing 	COW,
relying 	on 	personal 	automobile 	liability 	insurance 	that
extends 	to 	rented 	cars, 	and 	using 	coverage 	provided 	by 	a
third 	party 	such 	as 	a 	credit 	card 	provider. 	Initially,
credit 	card 	providers 	extended 	these 	benefits 	to 	holders 	of
(continued ... )
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The 	Honorable 	Peter M. 	Sullivan
March 	8, 	1989
. greater 	costs, 	primarily 	in 	the 	form 	of 	higher 	base 	prices,
than 	they 	otherwise might 	have 	incurred 	to 	cover 	the 	accident
and 	theft 	losses 	statutorily 	shifted 	to 	the 	rental 	car
companies. 	Recent 	news 	reports 	suggest 	that 	this 	may 	be
happening 	to 	some 	consumers 	in 	at 	least 	one 	state. 	A recent
article 	in 	The 	New 	York 	Times 	regarding 	adoption 	of 	CDW-
bundling 	legislation 	in 	Illinois 	said:
[C]ar-rental 	companies 	have 	raised 	their 	rates 	in
Illinois, 	where 	the 	ban 	on collision waivers 	took
effect 	Jan. 	1. 	Hertz 	raised 	its 	prices 	by 	8
percent 	in 	Illinois 	and 	by 	2.5 	to 	5 	percent
elsewhere 	in 	anticipation 	of 	a 	decline 	in 	waiver
sales 	to 	American 	Express's 	22.1 	million
cardholders. 	Alamo 	and 	Budget 	have 	also 	followed
Hertz's 	lead 	by 	raising 	prices 	in 	Illinois, 	but
no 	other 	m~or 	company 	has 	raised 	prices 	across
the 	board.!
Moreover, 	a 	Hertz 	spokesman 	has 	also 	indicated 	that 	"the
company's 	rates 	will 	go 	up 	about 	8%, 	or 	$3 	to 	$4 	per 	day 	for
rentals 	in New 	York" 	as 	a 	result 	of 	the 	Act. 13
Our 	analysis 	of
conclusion 	from 	that the 	CDW
reached issue 	comes 	to 	a 	different
in 	the 	NAAG 	Guidelines. 14
11( ... continued)
their 	"prestige" 	cards, 	such 	as 	"gold," 	"platinum," 	and
corporate 	cards. 	Recently, 	however, 	American 	Express
extended 	rental 	car 	damage 	coverage 	to 	its 	basic 	"green"
card. 	Other 	credit 	card 	companies 	are 	expected 	to 	follow
suit. 	The 	Record, 	Jan. 	15, 	1989, 	at 	B2, 	col. 	2.
12
13
N.Y. 	Times, 	Jan. 	7, 	1989, 	§ 	1 	at 	52, 	col. 	1.
N.Y. 	Daily News, 	Feb. 	13, 	1989, 	at 	23.
14 	The 	Guidelines 	make 	three 	alternative 	legislative
proposals, 	two 	of 	which 	would 	irrevocably 	allocate 	most 	of
the 	risk 	of 	damage 	to 	or 	loss 	of 	a 	rental 	car 	to 	the 	rental
car 	company. 	The 	final 	legislative 	proposal 	would 	permit 	a
rental 	car 	company 	to 	hold 	consumers 	liable 	for 	damages
resul ting 	from 	their 	negligence 	or 	intentional 	misconduct
provided 	that 	the 	rental 	car 	company 	offered 	to 	sell 	to
consumers 	a 	waiver 	at 	a 	regulated 	price 	related 	to 	the
company's 	loss 	experience. 	~ 	NAAG Guideline 	3.1.
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The 	Honorable 	Peter M. 	Sullivan
March 	8, 	1989
According 	to 	the 	Guidelines, 	CDW 	sales 	are 	troubling 	in 	part
because 	consumers 	lack 	adequate 	information 	and 	they 	en-
counter 	deception 	or 	high 	pressure 	at 	the 	rental 	counter. IS
Where 	consumers 	suffer 	from 	insufficient 	or 	confusing
information, 	remedies 	requiring 	the 	disclosure 	of 	more 	or
better 	information 	often may 	resolve 	the 	problem. 	Therefore,
providing 	consumers 	information 	on 	CDW 	may 	be 	more 	effective
and 	less 	costly 	than 	requiring 	that 	COW be 	sold 	~n the 	rental
bundle 	regardless 	of 	whether 	consumers 	want 	it. 1
Accordingly, 	we 	believe 	that 	a 	legislature 	considering
regulation 	of 	COW 	ought 	first 	to 	determine 	whether 	informa-
tion 	now 	conveniently 	available 	to 	consumers 	permits
rational 	decisionmaking 	with 	respect 	to 	COW. 	In 	the 	event
that 	the 	legislature 	determines 	that 	currently 	available
information 	is 	inadequate, 	it 	then 	ought 	to 	eXflore 	fully 	the
efficacy 	of 	information-generating 	measures. 1 	On 	the 	other
hand, 	if 	consumers 	are 	encountering 	unfair 	or 	deceptive
marketing 	practices 	at 	some 	car 	rental 	counters, 	the 	most
direct 	and 	efficient 	remedy 	may 	be 	law 	enforcement 	action
against 	the 	offenders.
15 	See 	generally 	NAAG 	Guideline 	3.1 	(c) 	and 	following
discussion.
16 	~ 	Beales, 	Craswell 	& 	Salop, 	"The 	Efficient
Regulation 	of 	Consumer 	Information," 	24 	J. 	of 	L. 	& Econ. 	491
(1981) .
17 	The 	authors 	of 	the 	NAAG 	Guidelines 	state 	that 	they
do 	"not 	believe 	that 	this 	[COW] 	information 	gap 	can be 	filled
by more 	disclosures 	.... " 	Comment 	to 	NAAG Guideline
3.1 	(c). 	No 	explanation 	is 	offered 	for 	this 	belief. 	Never-
theless, 	if 	this 	conclusion 	is 	supported, 	traditional 	law
enforcement 	efforts 	might 	be 	adequate 	to 	prevent 	deception 	or
unfairness 	in 	the 	marketing 	of 	COW. 	These 	alternatives 	are
worth 	exploring 	in 	detail 	before 	concluding 	that 	mandated
purchase 	of 	COW 	is 	the 	proper 	solution 	to 	the 	problem 	of
unwanted 	purchase 	of 	COW.
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The 	Honorable 	Peter M. 	Sullivan
March 	8, 	1989
Prohibition 	of 	Security Requirements
Another 	provision 	of 	the 	Act 	states 	that 	no 	rental 	car
company 	may 	require 	any 	security, 	deposit, 	or 	charge 	for
damage, 	by 	credit 	card 	or 	otherwise, 	during 	the 	term 	of 	the
rental 	agreement 	or 	pending 	resolution 	of 	any 	dispute. 18
Thus, 	for 	example, 	under 	the 	Act 	a 	rental 	car 	company 	is
prohibited 	from 	securing 	the 	lending 	of 	an 	automobile 	worth
thousands 	of 	dollars 	through 	a 	"hold" 	on 	a 	consumer's 	credit
card 	account, 	even 	if 	the 	hold 	were 	to 	be 	limited 	to 	the
anticipated 	cost 	of 	the 	rental 	and 	the 	consumer 	manifested
informed 	consent. 	This 	provision 	may 	increase 	the 	number 	of
instances 	in 	which 	rental 	car 	companies 	are 	unable 	to 	obtain
paYment 	for 	car 	rentals 	or 	for 	damages 	for 	which 	the 	Act
makes 	the 	renter 	responsible. 	Rental 	car 	companies 	may 	then
have 	no 	recourse 	but 	to 	increase 	rental 	rates 	to 	cover 	any
increase 	in 	unpaid 	charges, 	effectively 	requiring 	honest 	and
careful 	consumers 	to 	bear 	debts 	incurred 	by 	less 	scrupulous
and 	less 	careful 	persons. 19
We 	note 	for 	your 	consideration 	that 	although 	the 	NAAG
Task 	Force 	expressed 	concern 	regarding 	certain 	rental 	car
companies' 	practices 	relating 	to 	deposits, 	credit 	card 	holds,
and 	the 	like, 	the 	NAAG 	Guidelines 	would 	not 	bar 	these
practices 	generally. 	The 	approach 	adopted 	in 	the 	NAAG Guide-
lines, 	instead, 	tends 	to 	focus 	on 	ensuring 	adequate 	disclo-
su~e of 	and 	consumer 	consent 	to 	deposit, 	credit 	card 	account
hold, 	and 	similar 	rental 	car 	company 	requirements. 20 	This
approach, 	although 	not 	cost-free, 	entails 	fewer 	costs 	to
consumers 	than would be 	imposed by 	the 	Act.
Conclusion
It 	is 	not 	clear 	that 	the 	Act 	will 	provide 	net 	benefits
to 	consumers. 	We 	suggest 	additional 	consideration 	of 	the
potential 	adverse 	effects 	of 	the 	requirements 	in 	the 	Act 	that
18 	Act 	of 	1988, 	Pub. 	L. 	No. 	784, 	§ 	396-z.7.
19 	Further, 	the 	proscription 	of 	security-taking,
insofar 	as 	it 	may 	lead 	some 	drivers 	to 	conclude 	that 	they
have 	a 	lesser 	financial 	stake 	in 	avoiding 	all 	harm 	to 	rental
cars, 	may 	result 	in reduced 	care 	by 	some 	consumers.
20 	See, 	e.g., 	NAAG Guideline 	3.4.
l3/nycrrnt.24h 	8 	030889 	15: 08

The 	Honorable 	Peter M. 	Sullivan
March 	8, 	1989
some 	charges 	be 	bundled 	into 	base 	automobile 	rental 	fees. 	We
also 	hope 	you 	will 	take 	into 	account 	the 	prospect 	that 	the
changes 	in 	liability 	for 	damaged 	or 	stolen 	rental 	vehicles
could 	mean, 	on 	balance, 	higher 	rental 	prices 	for 	consumers.
Finally, 	we 	suggest 	that 	you 	consider whether 	it 	is 	advisable
to 	shift 	to 	some 	consumers 	part 	of 	the 	losses 	that 	may 	be
caused 	by 	other 	consumers, 	as 	may 	result 	from 	the 	provisions
of 	the 	Act 	relating 	to 	the 	holding 	of 	security.
We 	hope 	that 	these 	comments 	will 	help 	you 	in 	your
determination 	of 	whether 	the 	Act 	is 	likely 	to 	achieve 	the
goal 	of 	protecting 	consumers 	and 	whether, 	or 	how, 	the 	New
York 	General 	Business 	Law 	could 	be 	amended 	or 	revised 	in 	the
present 	legislative 	session 	to 	serve 	the 	welfare 	of 	consumers
and 	foster 	a 	competitive 	environment 	in 	the 	car 	rental
industry.
We 	appreciate 	the 	opportunity 	to 	comment.
Sincerely,
~>
/~v Joel 	Bloom
Director
New 	York 	Regional 	Office
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