Avis Budget Group, Inc. and its subsidiary Payless Car Rental agreed to pay $19 million to settle a class action lawsuit alleging they improperly charged customers for Gas Service Option (GSO) and Roadside Protection (RSP) fees after those customers had explicitly declined them. The settlement resolves the case Bacon et al. v. Avis Budget Group, Inc., filed in the U.S. District Court for the District of New Jersey in September 2016.
This settlement covers rental transactions that occurred between January 1, 2016 and November 25, 2023, affecting potentially thousands of customers across the country. The core issue involved deceptive charging practices where Payless customers who said no to optional add-ons were charged for those services anyway. For example, a customer might decline roadside assistance during the rental agreement process, only to find the $12 fee on their final bill. These were not small errors; they were systematic practices that generated millions in revenue by charging customers for services they had rejected at the time of rental. This settlement is significant because it required no claim filing for most customers—the settlement administrator will automatically distribute compensation to those who qualify. However, deadlines matter, and understanding the settlement details is crucial to making sure you receive what you’re owed if you rented from Payless during the covered period.
Table of Contents
- What Exactly Did Payless Do Wrong With Gas and Roadside Fees?
- How Much Money Will Payless Settlement Class Members Receive?
- Do You Have to File a Claim to Get Paid?
- What Are the Important Deadlines for This Settlement?
- What Changes Has Payless Made to Prevent This From Happening Again?
- How Does This Settlement Compare to Other Car Rental Cases and Hidden Fee Litigation?
- What Should You Do Right Now About the Payless Settlement?
- Conclusion
- Frequently Asked Questions
What Exactly Did Payless Do Wrong With Gas and Roadside Fees?
Payless Car Rental operated a deceptive billing system during the settlement period. Customers who explicitly declined the Gas Service Option (a service where Payless sells you gasoline at inflated prices) and Roadside Protection (coverage for roadside assistance) were still charged for these services. This wasn’t a simple processing error; the rental agreement records showed that customers had rejected these add-ons, yet the fees appeared on final invoices anyway. The practice occurred across rental transactions from January 1, 2016 through November 25, 2023. Imagine you rent a car for a weekend trip, the agent asks if you want roadside protection for an extra fee, you decline, and then when you check your credit card statement a week later, there’s a charge for that exact service you said no to.
This happened to thousands of Payless customers, and each one should have been prevented by proper computer systems and billing controls. The harm extended beyond just the individual fees. When someone rents a car, they’re already stressed about travel, checking into a rental location, and getting on the road. Finding unexpected charges on their bill weeks later creates frustration and erodes trust in the company. Some customers never noticed the charges; others complained but struggled to get refunds through customer service. That systematic nature of the problem is precisely why it became a class action settlement rather than a few isolated refunds.
How Much Money Will Payless Settlement Class Members Receive?
The settlement provides up to $20 per rental for Gas Service Option (GSO) fees and up to $12 per rental for Roadside Protection (RSP) fees. These are the maximum amounts per service per rental. However, there’s an important limitation: if the settlement fund doesn’t have enough money to pay every eligible customer the full amount, payments will be adjusted on a pro-rata basis, meaning the fund will be divided equally among all claimants rather than each person getting the maximum. Let’s walk through what this means in practice. If you rented from Payless three times during the settlement period and were charged for GSO once and RSP twice without your consent, you could potentially receive $20 for the gas fee and $24 for the two roadside protection fees, totaling $44—but only if there’s enough money in the settlement fund.
If pro-rata adjustment occurs, your share might be reduced proportionally. The major limitation to understand is that not everyone will receive the maximum stated amounts. class action settlements don’t work like guaranteed refunds; they pool money and divide it among all eligible class members. Some people who were charged incorrectly only once or twice will receive less than someone charged many times. Additionally, the settlement administrator has to deduct administrative costs, attorney fees (which are being paid from the settlement fund), and court costs before distribution, further reducing what’s available for actual payouts.
Do You Have to File a Claim to Get Paid?
One of the most consumer-friendly aspects of this settlement is that it requires no claim form for most eligible class members. The settlement administrator will automatically identify Payless customers from company records who were charged GSO or RSP fees during the covered period (January 1, 2016 through November 25, 2023) and will issue payments automatically. This is fundamentally different from many class action settlements where you must submit proof of purchase and fill out claim forms. If you rented from Payless during the settlement period and have your rental confirmation, you don’t need to do anything to receive your payment. The settlement administrator has access to Payless’s billing records and will cross-reference rental transactions to identify who was charged these fees.
Payments will be issued to the credit card, email, or mailing address on file with the rental agreement. The only time you might need to take action is if your contact information has changed significantly since the rental, or if you want to opt out of the settlement for some reason. The key deadline for this automatic process is November 10, 2025, which is the payment election and opt-out deadline. If you want to claim your settlement payment or formally opt out, you need to act by this date. After November 10, 2025, you likely lose your right to participate in the settlement unless you have a valid reason for missing the deadline.
What Are the Important Deadlines for This Settlement?
The critical dates for the Payless settlement are November 10, 2025 for the payment election and opt-out deadline, and December 2, 2025 for the final fairness hearing. The November 10 deadline is the absolute cutoff for making any payment elections or opting out of the settlement. If you want to receive your compensation, you shouldn’t wait until the last day to check your status or contact the settlement administrator. Here’s what the timeline looks like: Between now and November 10, 2025, eligible class members can monitor their settlement status and verify that the settlement administrator has their correct contact information.
The fairness hearing on December 2, 2025 allows the court to review the settlement terms, the administrator’s work, and any final objections before the settlement becomes final and payments are distributed. After the fairness hearing, payments should be processed relatively quickly to those who have complied with the deadline. The major limitation and warning here is that missing the November 10, 2025 deadline means forfeiting your right to settlement compensation. There are rare exceptions for people who have valid reasons for missing the deadline (such as being out of the country or having a legitimate illness), but you would need to petition the court to be considered. Don’t assume you can just claim money later if you miss the deadline.
What Changes Has Payless Made to Prevent This From Happening Again?
As part of the settlement agreement, Payless has committed to updating its sales and billing processes. Specifically, the company agreed to require affirmative customer consent before charging for add-on and ancillary products like the Gas Service Option and Roadside Protection. In practical terms, this means Payless cannot simply pre-check boxes on rental agreements or bill customers for optional services without explicit, clear approval from the renter. This operational change is important because it removes the system that allowed improper charges in the first place. Before, the rental system apparently allowed fees to be applied even when customers had declined them.
The new requirement means a customer must actively say “yes” to a service before being charged. In modern rental transactions, this could mean a checkbox that’s not pre-selected, a verbal confirmation, or a digital signature specifically authorizing each optional service. The change applies going forward from the settlement agreement. However, a limitation to recognize is that this only applies to Payless and Avis Budget Group going forward—it doesn’t change practices at other car rental companies. Hertz, Enterprise, Budget (the main budget rental brand), and others operate under their own practices and may have their own compliance issues or lawsuits. Additionally, while the requirement for affirmative consent is stronger than pre-checked boxes, it still relies on Payless’s systems working correctly and staff following procedures, which is how the original problem occurred in the first place.
How Does This Settlement Compare to Other Car Rental Cases and Hidden Fee Litigation?
Hidden fee cases in the car rental industry aren’t uncommon. Over the past decade, multiple rental companies have faced lawsuits and settlements related to charging for services customers declined, hidden delivery fees, fuel surcharges applied without clear disclosure, or damage waiver charges added without consent. The Payless settlement’s $19 million fund is substantial but reflects the scope of the problem: three years of systematic overcharging at a national rental chain.
What distinguishes the Payless settlement is the automatic payment provision and the sheer volume of potentially affected customers. Many car rental settlements require customers to submit claims with proof of their rental. The Payless settlement’s use of company records to automatically identify and pay eligible customers is more efficient and ensures that people who may have forgotten about the erroneous charges or don’t follow settlement news still get compensated. This represents a shift toward more consumer-friendly settlement administration, though it’s still not universal across all class action settlements.
What Should You Do Right Now About the Payless Settlement?
If you rented from Payless Car Rental at any point between January 1, 2016 and November 25, 2023, your first step is to verify your eligibility through the official settlement website. You can visit the settlement administrator’s site to check your rental history and confirm whether you were charged GSO or RSP fees. Having your rental confirmations handy will make this easier, though the settlement administrator should have the data on file.
Your second step is to ensure your contact information is current. If you’ve changed email addresses, phone numbers, or moved since your rental, update your information with the settlement administrator so that your payment reaches you when it’s processed. Set a reminder for early November 2025 to confirm your status before the November 10 deadline, giving you time to address any issues that might arise.
Conclusion
The Payless Car Rental settlement represents a meaningful recovery for thousands of customers who were charged for services they explicitly declined. With a $19 million fund providing automatic compensation of up to $20 for gas fees and up to $12 for roadside protection fees per rental—subject to pro-rata adjustment—eligible customers need to take a few simple steps to ensure they receive their share.
The most important action is to verify your eligibility and confirm your contact information with the settlement administrator before the November 10, 2025 deadline. This settlement also signals an important accountability moment in the car rental industry, where companies are now required to prove that charging for add-on services happened with actual customer consent. While Payless’s operational changes represent an improvement, remaining vigilant about checking your rental bills and understanding what you’re actually being charged for remains smart practice when renting vehicles from any company.
Frequently Asked Questions
Do I have to file a claim to get my settlement payment from Payless?
No. The settlement administrator will automatically identify eligible customers using Payless’s rental records and issue payments without requiring a claim form. You only need to ensure your contact information is current.
What if I rented from Payless multiple times and was charged these fees more than once?
You’re eligible for compensation for each instance you were charged GSO or RSP fees without consent. The settlement administrator will review your complete rental history during the settlement period and calculate your total compensation.
What happens if there isn’t enough money in the $19 million to pay everyone the maximum amount?
If a pro-rata adjustment is needed, the settlement fund will be divided equally among all eligible class members based on how many instances each person was charged. Everyone’s payment would be reduced proportionally rather than some people getting full amounts while others get nothing.
Is the November 10, 2025 deadline a hard cutoff for claiming money?
Yes, November 10, 2025 is the deadline for payment elections and opting out. Missing this date without a valid legal excuse forfeits your right to settlement compensation.
Will this settlement affect future rentals or warranty coverage from Payless?
The settlement doesn’t affect your ability to rent from Payless in the future or any warranty coverage you currently have. It requires Payless to change its practices going forward to ensure affirmative customer consent before charging for optional services.
What was the actual problem with how Payless charged customers?
Customers explicitly declined the Gas Service Option and Roadside Protection during their rental agreements, but Payless still charged these fees to their bills. The settlement covers the period from January 1, 2016 through November 25, 2023, during which this practice occurred.