Need to know
- A former employee of Right2Drive has spoken out about customers he claims are being confused by the company
- Right2Drive say they are transparent with their customers about their business model
- Corporate regulator ASIC urges customers to directly speak to their insurers if unsure about their cover
According to a former employee, customers of accident hire car company Right2Drive are engaging with the firm without a clear understanding of their business model – and the company is not doing enough to be transparent about the way it operates.
As we reported last year, third-party accident hire car companies like Right2Drive offer a loan car when you are the not-at-fault driver in an accident, but may later seek to recoup the costs from the other party in the accident through a variety of ways – including litigation in your name.
Ex-employee says consumers are confused
Liang Chen is a former employee of Right2Drive. (Photo: Jarni Blakkarly)
Right2Drive, along with other companies operating on a similar business model, do not represent or work on behalf of the insurer of either party involved in the accident. This is something a former employee of Right2Drive, Liang Chen, says is not being made clear to the customer.
Chen, a lawyer by profession, worked for Right2Drive on weekends throughout 2021 and 2022 and he says he saw a repeated pattern of the company not disclosing their lack of affiliation with insurers to the customer.
"By failing to tell the customers they are not insurance, that is creating confusion in the customer's mind," he says.
"The company has an obligation to educate the market, you hear these jingles on the radio and all that, but it's about educating the market and not pretending to be something that you're not, and not have the customers under false pretenses about what they are getting."
Chen says he frequently told confused customers that Right2Drive was not working with or for their insurer and that a high number of his clients pulled out of the hire car arrangements after he explained this.
He claims he was unfairly dismissed from the company in late 2022 and lodged a complaint with the Fair Work Commission. The matter was settled between the two parties and CHOICE understands Chen received a compensation payment from Right2Drive. Right2Drive rejects the claim that Chen was unfairly dismissed.
'Disgruntled former employee'
In a company response, Right2Drive describes Chen as a 'disgruntled former employee' who had been found to have engaged in 'misconduct' on several occasions.
"Liang had a limited knowledge of the customer journey, given his role was to drop off and pick up our vehicles on weekends. He had little to no involvement with the customer onboarding team, and as such is not well positioned to speak to our transparency with our customers," the company spokesperson says.
"His opinions do not at all reflect who we are and how we operate.
"We occasionally have customers who continue to believe that Right2Drive has been engaged by – or is somehow connected to – their insurer. Our onboarding team is trained to instruct customers that we are not affiliated with their insurer," the spokesperson adds.
Consumer advocates also seeing confusion
Rex Punshon is a senior solicitor at the Melbourne-based Consumer Action Law Centre. He says the claims of Chen about the company not being upfront with customers don't surprise him at all.
"We have seen a number of matters involving Right2Drive and I suppose the consistent theme across those matters, based on what we have been told, is that the customer believed Right2Drive had been engaged by their own insurer, or the other driver's insurer," he says.
In some circumstances motorists may be led to believe they are dealing with their insurer
Insurance Council of Australia spokesperson
"The stress of being in a car accident is real and can carry on long after you've left the scene. I think the company is taking advantage of someone who's been through that stressful situation by leading them to believe that there's no risk to them accepting a hire car, when in fact there is a risk."
A spokesperson for the Insurance Council of Australia, the representative body for general insurance providers, says third-party hire car company services like those offered by Right2Drive were at times "unnecessary" as car hire costs were sometimes provided in the insurer's policy.
"In some circumstances motorists may be led to believe they are dealing with their insurer," the spokesperson says.
ASIC weighs in
When asked about Right2Drive, a spokesperson for the corporate regulator the Australian Securities and Investments Commission (ASIC) told CHOICE customers should contact their insurer directly if they are unsure about whether car rental is included after an accident.
"Consumers should always contact their insurance provider either by using the contact details found on their insurer's main website or the contact details provided on a previous piece of correspondence from their insurer. For example, a statement or a policy renewal form," the spokesperson says.
"Consumers can report misconduct to ASIC online or the Australian Government's Scamwatch website if they feel they have been misled by a business purporting to be their insurer, or purporting to be associated with their insurer," they add.
Stock images: Getty, unless otherwise stated.
