BILL NUMBER: S9501
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the general business law, in relation to unauthorized
rental car use
 
PURPOSE:
To mitigate fraudulent vehicle rentals and modernize notification meth-
ods for rental vehicle companies seeking to recover vehicles that have
been fraudulently rented or possessed in breach of a, rental agreement.
 
SUMMARY OF PROVISIONS:
Section one of the bill amends subdivision 14 of § 396-z of the general
business law to establish the terms and conditions by which a rental
vehicle company may take steps to recover a vehicle that is possessed by
a renter, without permission, for more than 24 hours beyond the period
specified in the rental agreement or when the renter has obtained custo-
dy of'a rental vehicle under materially false or fraudulent pretenses,
representations or promises.
Section two of the bill amends subdivision 14 of § 396-z of the general
business law making the identical changes as reflected in section one of
this bill to account for the expiration and reversion of this section.
Section three of the bill provides the effective date.
 
JUSTIFICATION:
Under current law, for a rental vehicle company to recover a rental
vehicle, it must demonstrate that the renter intentionally withheld the
vehicle for a period that constitutes a "gross deviation from the rental
agreement." The statute defines "gross deviation from the rental agree-
ment" as circumstances where the renter is authorized to rent a vehicle
for fifteen days or less, but then keeps the vehicle for at least anoth-
er week beyond the return date specified in the rental agreement. Once
the renter has kept possession of the vehicle a week past its agreed
upon return date, the rental company must notify the renter in writing
by delivering a notice in person or using certified mail that the renter
return the vehicle and is subject to criminal penalties upon failure to
comply. Only after the renter keeps the vehicle additional two days
after this notification may the rental vehicle company seek assistance
from law enforcement in recovering the vehicle.
On June 28, 2025, a customer walked into a rental company location in
Brooklyn and entered into a written rental agreement for a one-day
rental. She did not return the car in one day, or two, or three and did
not respond to numerous inquiries from the rental car company. In
compliance with the current unauthorized use statute requiring a vehicle
be withheld for not less than seven days beyond its return date, a writ-
ten letter was delivered to the renters address on July 8th. In compli-
ance with the statute, another 48-hours passed after which the rental
car company could finally seek assistance from law enforcement to
recover the vehicle.òOn July 19th, a full 20 days after the vehicle was
to be returned, with the renter at the wheel, it sped off the Manhattan
Bridge near Chinatown in excess of 70 mph killing a man on a bicycle and
a woman waiting at a bus stop. The driver and her passenger attempted to
flee on foot but were apprehended. Drugs and alcohol were found inside
the vehicle.
Today, twenty-six years into the twenty-first century, rental vehicle
companies have numerous tools to quickly recognize fraudulent rentals
and to track down their vehicles once they are being operated outside
the terms of the rental contract. However, under existing law requires
that, even when possession is maintained past 24 hours of a one-day
rental, the rental vehicle company must wait an additional seven days
and then must serve a written demand for return and wait an additional
48 hours before notifying law enforcement. And even then, "unauthorized
use of a motor vehicle" tends to be an extremely low priority for law
enforcement which tend to view these matters not as criminal violations,
but as a breach of contract.'
The purpose of this bill is to provide the legal framework within the
General Business Law for rental vehicle companies to address non-permis-
sive retention and rental by fraudulent' means initially as contractual
matter with timeframes set to reflect the fact that communication
between contractual parties today is significantly different than it was
when the unauthorized use statute was updated almost fifty years ago as
the primary method for recovering these vehicles.
The problem is not insignificant. While most rental vehicle companies
have systems in place, such as the use of driver's license scanning
software and chip readers, increasingly sophisticated use of fraudulent
means enable a handful of disreputable renters to slip through the
cracks. Within the past year, one rental vehicle company alone reported
forty-one fraudulent rentals, amounting to over $300,000 worth of vehi-
cle damages or unrecovered vehicle losses. At the end of the day, with
rare exceptions for the most egregious cases, rental vehicle company's
priority is not to engage police or saddle renters with criminal records
rather it is to regain possession of its property. This bill strikes the
proper balance by shrinking time-frames, engaging modern communication
techniques and focusing on the repossession of the vehicle within the
confines of the business relationship. At the same time, it updates the
unauthorized use statute to allow rental vehicle ,companies to engage
law enforcement in the most extreme circumstances when civil recovery is
ineffective.
 
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S9501: 396-z general business law, 396-z(14) general business law