ALBANY, N.Y. -- New York's attorney general has reached a settlement with Zipcar Inc. over vehicle damage fees charged to 5,000 members from 2011 through 2015.
New York law requires giving consumers an opportunity to dispute damage fees before they're assessed.
Investigators say Zipcar didn't notify consumers before charging fees that ranged up to $1,000.
Zipcar lets members rent cars by the hour or day. Contracts say members are liable for damages on cars in their possession.
Zipcar agreed to refund damage charges assessed against customers who contested their responsibility, pay $35,000 to the attorney general's office and comply with New York law.
"Consumers should never learn that they have been accused of damaging a rental car when they see a surprise charge on their credit card statement," Attorney General Eric Schneiderman said in a statement.
In one instance, Zipcar charged a consumer $750 for scratches on a car before notifying the consumer of the damage. When the consumer complained that the damage had not occurred at the time of his reservation, Zipcar reviewed the file but refused to refund the money it had charged, according to Schneiderman's statement.
A Zipcar spokesman says the company has been working with the attorney general's office on the application of the state's unique statute and is pleased the matter is concluded.