Yes, Avis Budget has faced class action claims and government settlements over improperly charging collision damage waiver (CDW) fees on pre-paid reservations and rentals where the fees were already included or should not have been charged. The most documented case involves a $10.1 million settlement between Avis Budget Group and the U.S. Department of Defense covering charges from 2014 through 2019, where the company charged supplemental CDW and loss damage waiver (LDW) insurance fees on government rentals even though these fees were already embedded in the negotiated rental rates.
The Avis settlement with the DOD reveals a systematic billing problem: the rental company was double-charging by adding insurance fees that were already factored into the base rental agreement. This practice wasn’t limited to government contracts—similar add-on charging disputes have affected other rental car companies and consumer rentals as well. Understanding what happened, who qualifies for compensation, and how to claim it is critical for anyone who rented from Avis during the affected period.
Table of Contents
- What Is the Collision Damage Waiver Billing Issue at Avis?
- The $10.1 Million Department of Defense Settlement
- Other Avis and Related Rental Car Settlements
- How Consumers Can Determine If They Were Affected
- How Settlement Claims Work in CDW Billing Cases
- What to Watch for in Your Rental Agreement
- The Broader Pattern and What It Means Going Forward
What Is the Collision Damage Waiver Billing Issue at Avis?
The collision damage waiver billing dispute centers on how Avis charged insurance and damage waiver fees. When a rental rate is quoted or contracted—whether by the U.S. government or a consumer—the base rate may already include certain protections or the cost of those protections may be negotiated as part of the total deal.
The problem arose when Avis charged separate CDW or LDW fees on top of rates where these costs were already accounted for, essentially billing customers twice for the same coverage. In the DOD settlement case, Avis charged the government for supplemental collision damage waiver and loss damage waiver insurance on top of rental rates from January 1, 2014, through December 31, 2019. The government’s negotiated rental rates with Avis were supposed to include or account for these protections, but Avis tacked on additional charges anyway. This is distinct from situations where a customer actively requests additional CDW coverage at checkout—this was an automatic or undisclosed surcharge on rentals where the coverage should not have been charged separately.
The $10.1 Million Department of Defense Settlement
In what was classified as a False Claims Act settlement, Avis Budget Group agreed to pay $10.1 million to resolve allegations that it improperly charged the U.S. Department of Defense for supplemental collision damage waiver and loss damage waiver fees. The settlement covered all government rentals made through Avis from January 1, 2014, through December 31, 2019—a six-year window affecting potentially thousands of military and government employees who rented vehicles through official government accounts.
The False Claims Act applies when a company knowingly, or with reckless disregard for the truth, submits false billing claims to the federal government. The DOD determined that Avis’s charges for CDW and LDW fees on rentals where these costs were already covered under the government’s negotiated agreement constituted false claims. While this settlement was between Avis and the government (not a traditional class action lawsuit), it established that Avis engaged in improper billing practices related to damage waiver fees. However, only the government received the settlement payout in this particular case, not individual renters.
Other Avis and Related Rental Car Settlements
Beyond the DOD settlement, the car rental industry has faced multiple class actions over add-on fees and insurance charges. A $19 million settlement involving Payless Car Rental (which has ties to the broader rental car market and industry practices) addressed allegations that consumers were charged for add-on products like gas service options and roadside protection even after declining them. That settlement covered rentals from January 1, 2016, through November 25, 2023, with preliminary approval on August 21, 2025, and a final approval hearing set for December 2, 2025.
Separately, the Venerus v. Avis Budget Car Rental settlement specifically addresses insurance-related issues in car rental contracts. This settlement demonstrates that Avis has faced multiple legal challenges related to how it charges for and discloses insurance and damage waiver options. The pattern across these settlements shows that car rental companies—including Avis—have repeatedly used billing practices that either surprise customers with charges they didn’t authorize or add fees on top of already-negotiated rates.
How Consumers Can Determine If They Were Affected
If you rented a vehicle from Avis Budget between 2014 and 2019 (or during other affected periods covered by other settlements), you may have been charged improperly. Check your rental receipt or credit card statement to see whether you were charged for CDW or LDW as a separate line item in addition to your base rental fee. Compare what you understood your total rental cost to be versus what you actually paid. If you recall negotiating a rental rate that was supposed to be all-inclusive, or if you specifically declined damage waiver coverage at the rental counter but were still charged for it, you may have grounds to claim.
The challenge is that these practices are sometimes subtle. A customer might not notice a $15 to $25 per-day insurance surcharge on a receipt years later, especially if the rental was expensed through work or paid by a corporate account. Government employees and military personnel who rented through official channels are more likely to have documentation, as those rentals are typically tracked through government procurement systems. For consumers with older receipts or vague memories of rentals, gathering any documentation—credit card statements, emails confirming the rental rate, or photos of receipts—strengthens a potential claim.
How Settlement Claims Work in CDW Billing Cases
When a class action or settlement occurs, eligible claimants typically must submit proof that they made a rental and were charged improperly. For the Payless settlement, claimants need to provide rental dates, confirmation numbers, and evidence of the unauthorized charges. Similar documentation would be required for any Avis-specific consumer class action settlements. However, not all Avis billing disputes have resulted in consumer class actions with settlement funds available to claimants.
The DOD settlement was a government recovery—the company paid the federal government, and government employees did not receive individual payouts. To determine whether you’re eligible for a settlement claim, you need to identify a specific, active settlement that applies to you. Checking the official settlement website (if one exists for your particular case) is critical, as these sites list exactly who qualifies, what documentation is required, and how to submit a claim. Filing deadlines for settlements are strict and typically range from several months to a couple of years after final approval, so acting promptly once you identify an applicable settlement is essential.
What to Watch for in Your Rental Agreement
When renting from Avis or any major car rental company today, protect yourself by carefully reviewing what’s included in your quoted rate before you agree. Ask whether the base rate includes or excludes damage waiver coverage, and whether there are any supplemental fees that will be added at pickup. Read the fine print on your confirmation email. If the rental counter staff tries to add CDW or LDW charges that weren’t disclosed upfront, ask for a manager and request a corrected receipt.
Many car rental companies now include damage waiver coverage in their base rates for certain credit card holders or loyalty program members, but this varies. The key difference from Avis’s past practice is transparency: you should know upfront what you’re paying for. If a charge appears on your final bill that wasn’t mentioned when you made the reservation, request clarification immediately and get it in writing. Taking photos of your receipt or emailing yourself the final charges immediately after pickup creates a record that helps if you later discover a billing error.
The Broader Pattern and What It Means Going Forward
The recurring settlements involving Avis and other rental car companies over add-on fees and insurance charges reflect an industry-wide problem that regulatory agencies and courts have identified: rental companies profit from customer confusion and inattention. By adding charges that are vague, partially buried in fine print, or charged despite customer declination, companies can generate millions in unwarranted revenue before facing legal action. Going forward, increased regulatory scrutiny and class action litigation have made some rental companies more transparent about add-on fees, but the problem persists.
The Federal Trade Commission and state attorneys general continue to investigate rental car practices. For consumers, this means vigilance remains necessary. Document your rentals, understand what you’re being charged, and keep records. If you believe you were overcharged, research whether an active settlement applies to your rental dates and file a claim if eligible.