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As New York City residents prepare for Memorial Day travel, Democratic House candidate Jack Schlossberg is demanding a federal investigation into rental car companies’ use of artificial intelligence. Speaking outside a Manhattan Hertz location, Schlossberg expressed concern about AI systems scanning rental vehicles for damage, potentially resulting in unfair charges to consumers.
Schlossberg, grandson of former President John F. Kennedy, is specifically calling on the Federal Trade Commission to investigate Hertz’s AI damage detection system. The car rental giant began deploying the technology at airport locations last year in partnership with Israel-based Uveye.
“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,” Schlossberg told Fox News Digital.
His concerns stem partly from a report in The Drive, where a Hertz customer was charged $440 for a one-inch scuff on a wheel. The charge included $250 for repairs, $125 for processing, and a $65 administrative fee. The report further detailed the customer’s difficulty in disputing the charge, with the company’s chatbot failing to connect them with a human representative.
The AI scanning technology, which uses cameras and machine learning algorithms, was implemented to improve the “frequency, accuracy, and efficiency” of car inspections and potentially eliminate the need for manual checks, according to Car & Driver.
If elected to Congress in New York’s 12th District, Schlossberg pledges to push for legislation addressing these concerns. In the meantime, he’s urging the FTC to take four specific actions: conduct a full investigation into Hertz’s AI damage detection practices, determine whether these practices constitute unfair or deceptive acts under federal law, establish clear guidelines for AI use in consumer-facing financial decisions, and ensure consumers have a transparent process to dispute charges.
“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.”
The timing of Schlossberg’s announcement appears strategic, coming ahead of the busy summer travel season when many New Yorkers will be renting vehicles. His campaign emphasized that “innovation must not come at the expense of the consumer” while criticizing local elected officials who “quietly work for the AI industry.”
Hertz has pushed back against Schlossberg’s characterization of their technology. In a statement to Fox News Digital, a company spokesperson defended the system: “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 further stated that customers are not charged for damages invisible to the human eye and are provided comprehensive reports with before-and-after photos. Hertz claims these issues can be discussed with their customer care team via multiple channels, including email, phone, or chat.
The FTC declined to comment on Schlossberg’s call for an investigation.
The concerns raised by Schlossberg highlight growing tensions around AI implementation in consumer services. As artificial intelligence rapidly expands into various industries, questions about transparency, fairness, and consumer protection are becoming increasingly urgent. The rental car industry, with its complex damage assessment processes and fee structures, presents a particularly challenging test case for these emerging technologies.
Schlossberg is running in a crowded Democratic primary on June 23 in one of the nation’s most heavily Democratic districts, where the primary winner is widely expected to win the general election.
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4 Comments
This raises important questions about the responsible use of AI in consumer-facing industries. Rental car companies should be transparent about their damage detection systems and ensure customers are treated fairly. Schlossberg’s call for a federal investigation seems warranted to address these concerns.
The rental car industry’s use of AI for damage detection is concerning. While the technology may help streamline operations, it also creates risks of abuse and unfair treatment of customers. I’m glad Schlossberg is pushing for a federal investigation to ensure AI is not being misused in this context.
AI can be a powerful tool, but it must be deployed responsibly and with proper oversight. Rental car companies should ensure their damage detection systems are fair and transparent, giving customers a clear opportunity to dispute any charges. It’s good to see a politician taking this issue seriously.
This is an interesting story about the potential misuse of AI technology in rental car damage detection. While efficiency and automation have benefits, there need to be strong consumer protections to prevent unfair charges. Schlossberg raises valid concerns that should be investigated.