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Car rental firm tracks speeders with satellites

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NEW HAVEN, Conn. — James Turner was driving a rental car on a business trip to Virginia last October when he had a problem using his bank card.

His bank told him the car rental company, Acme Rent-A-Car, had withdrawn $450 from his account in a 24-hour period.

That's when Turner found out that Acme is using global-positioning satellites to catch customers speeding and is automatically charging fines to their ATM cards.

Acme claimed to have caught Turner speeding in Westport, Conn., on the New Jersey Turnpike and somewhere in Virginia.

"They told me that I was actually tracked by satellite across seven states," the 44-year-old theater box office manager said.

Turner is suing in small claims court, and the state Consumer Protection Department filed a complaint Monday accusing Acme of violating Connecticut's Unfair Trade Practices Act by failing to warn customers properly about potential fines. Acme has only one outlet, in New Haven.

While other car rental companies use GPS to track stolen cars or give directions, experts said they have not heard of any other companies tracking speed and levying fines. Six national car rental companies contacted by The Associated Press said they do not track customers' speed.

Connecticut Attorney General Richard Blumenthal, whose office investigated Acme, called the practice "abusive and illegal." The state said it found 26 customers who were forced to pay speeding penalties.

Max Brunswick, a lawyer for Acme, insisted that the practice is legal and is spelled out in customers' contracts: The car will be tracked and the driver will be fined $150 for each speeding violation.

He said Monday that the company is amenable to offering refunds and plans to more clearly define the policy in customer contracts.

"Our goal has never been to make money off of this. Our goal has been to enforce speed limits on our cars and prevent the catastrophic claims that can put us out of business," Brunswick said.

Neil Abrams, president of Abrams Consulting Group, a consulting firm for the car rental industry, said that as long as the terms of the agreement are clear, tracking and fining customers is not unfair. In Turner's case, though, disclosing the policy in the contract might not be enough, Abrams said.

"I would say in something like this there is a duty of the rental company to give a greater disclosure — some sort of initialed acknowledgment, a verbal exchange between the customer service agent and the customer," he said.

Acme employees in New Haven would not comment and refused to show the AP a copy of the rental contract.

Barry Steinhardt, associate director of the American Civil Liberties Union, said the practice is an invasion of privacy.

Daniel Horton of New Haven said he was not aware of Acme's policy when the company deducted $250 from his debit account a few months ago. Horton said he continues to rent cars from Acme because he does not have a credit card and none of the other companies in the area will accept a debit card.

"I don't like it, but I don't have no choice," the 25-year-old construction worker said.

Bernadette Keyes, Turner's lawyer, said a main problem with Acme's policy is that customers cannot contest the charges.

"Typically when you get arrested for speeding, you see the cop and you look down at your speedometer," she said. "In this case it's three days later. How do you know?"

Thrifty Car Rental also equips some cars with GPS devices, but to track vehicles that customers fail to return, spokesman Chris Payne said. Hertz and Avis said they use GPS for providing directions.

"We don't have an interest in surveying what our customers are doing," said Rich Broome, Hertz vice president for corporate affairs.

Thifty's Payne said: "I cannot imagine that this is something that would catch on with rental car companies. Consumers are left with the impression that Big Brother is watching."

Loretta Waters, a spokeswoman for the Insurance Information Institute in New York, said if Acme's approach proves effective, it could earn a rate reduction for a rental car company.

"Certainly anything that can reduce any propensity to speed would be something we would favor," Waters said.