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FIRST ON FOX: NEW YORK, N.Y. — As thousands of New York City residents prepare to hit the road to leave town for Memorial Day and summer travel, Democratic House candidate Jack Schlossberg is calling for an investigation into the way rental car companies, and potentially other industries, are using artificial intelligence.
Schlossberg, the only grandson of former President John F. Kennedy, is calling on the Federal Trade Commission to look into reports that Hertz began using AI last year to scan cars for rental damages, prompting warnings that consumers could end up being overcharged.
“AI is being used in consumer-facing financial products, and Hertz is using AI to scan for microscopic damage on cars, invisible to the human eye, to charge people with fees for damage that they might not even be aware of, they have no opportunity to dispute, and the FTC should act here to investigate whether or not this constitutes an unfair trade practice,” Schlossberg told Fox News Digital outside a midtown Manhattan Hertz location.
Schlossberg’s concerns stem in part from a report from The Drive where a Hertz customer at location using the technology said he was notified minutes after dropping off his car that a 1-inch scuff on the driver’s side rear wheel resulted in a $440 charge that included $250 for the repair, $125 for processing, and a $65 administrative fee.
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Fox News Digital spoke to Jack Schlossberg about his concerns that artificial intelligence is being used to overcharge consumers. (Fox News Digital)
The report claims the situation for the customer got even worse when he tried to dispute the charges, and the company’s chatbot did not offer a way to reach a live representative, instead routing the issue for review at a later time.
Hertz has been partnering with Israel-based Uveye to deploy AI scanning technology at airport locations over the past year and uses cameras and machine learning algorithms to scan returned cars in hopes of improving the “frequency, accuracy, and efficiency” of the process and phase out the need for manual inspections, Car & Driver reported.
Schlossberg is calling on the FTC to take four actions, adding that if elected to Congress in NY-12 he would move to enshrine them into federal law: conduct a full investigation into Hertz’s use of AI-driven damage detection, determine whether the practice constitutes an unfair or deceptive act under federal law, establish clear guidelines for the use of AI in consumer-facing financial decisions, and ensure that consumers have a transparent, fair, and accessible process to dispute charges.
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“I think that this is a harbinger of what’s to come,” Schlossberg said. “This is the new frontier of corporate fine print because AI is being used in ways we couldn’t imagine to price gouge, price fix, jack up prices on consumers without their consent, and basically just squeeze every nickel and dime out of consumers that they possibly can. And sometimes this can be unfair.”
“We have elected officials in New York City who quietly work for the AI industry — meanwhile, like in the case of Hertz, consumers are being taken for a ride,” Schlossberg’s campaign said in a Wednesday press release first obtained by Fox News Digital, adding that “innovation must not come at the expense of the consumer.”
A Hertz spokesperson pushed back on Schlossberg’s concerns in a statement to Fox News Digital, saying, “Digital vehicle inspections bring precision and transparency to a historically manual and inconsistent process while also enhancing the safety, quality, and reliability of our fleet. They protect customers from being charged for damage that didn’t occur during their rental while enabling faster, fairer resolution when it does.”
The company added, “Since launching over one year ago, we’ve been listening, learning, and improving based on customer feedback — increasing communication, enhancing awareness at digital inspection locations, and strengthening our support channels. We’re committed to building upon the progress we’ve made to continue providing our customers with a more consistent rental experience and safer fleet.”
A company spokesperson also told Fox News Digital that customers are not charged for damages invisible to the human eye and are provided comprehensive reports that include before-and-after photos that can easily be discussed with a Customer Care team via email, phone or chat.
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General view of the entrance to Hertz Car Rentals and the Ziegfeld Ballroom in Midtown Manhattan on Wednesday, May 17, 2023. (Julia Bonavita/Fox News Digital)
Schlossberg told Fox News Digital that his announcement in mid-April is intended to “get ahead of the peak season booking” as New Yorkers plan their Memorial Day weekend trips and should be aware of the potential pitfalls of renting a car within the landscape of emerging AI technology.
The FTC declined to comment.
Schlossberg is running as a Democrat in a crowded primary on June 23 to represent New York’s 12th Congressional District in Congress, where the winner is widely believed to be in the driver’s seat to win the general election in one of the most heavily Democratic districts in the country.
