B-180512, MAY 17, 1974

B-180512: May 17, 1974

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THE AGENCY IS LIABLE TO CAR RENTAL COMPANY FOR CHARGES INCURRED BY EMPLOYEE OF AGENCY WHO. IT IS REPORTED THAT A NUMBER OF THE FOREGOING CREDIT CARDS WERE ISSUED TO THE COMMISSION PURSUANT TO A HERTZ SYSTEM. THE AGREEMENT STIPULATES IN PART THAT FIRMS RECEIVING SUCH CARDS "ASSUME FULL RESPONSIBILITY FOR THEIR USE *** (INCLUDING) PROMPT NOTIFICATION FOR CANCELLATION AND REISSUE WHEN A CARD IS LOST OR STOLEN.". IT IS STATED THAT AN EMPLOYEE. AT WHICH TIME HERTZ WAS FIRST NOTIFIED OF THE UNAUTHORIZED USE. IT IS REPORTED THAT THE AUTOMOBILES WERE NEVER USED IN THE PERFORMANCE OF OFFICIAL AGENCY BUSINESS. WERE REPORTEDLY INCURRED. WE BELIEVE THAT THE COMMISSION IS CONTRACTUALLY LIABLE FOR ANY CHARGES INCURRED BY UNAUTHORIZED USE PRIOR TO THE TIME HERTZ WAS NOTIFIED OF SUCH USE.

B-180512, MAY 17, 1974

UNDER CREDIT ARRANGEMENT BY WHICH CAR RENTAL COMPANY ISSUED CREDIT CARDS TO AGENCY, WHICH AGREED TO ASSUME FULL RESPONSIBILITY FOR THEIR USE, THE AGENCY IS LIABLE TO CAR RENTAL COMPANY FOR CHARGES INCURRED BY EMPLOYEE OF AGENCY WHO, WITHOUT PERMISSION, UTILIZED CREDIT CARD TO LEASE AUTOMOBILES FOR PERSONAL USE.

TO EQUAL EMPLOYMENT OPPORTUNITY COMMISSION:

AN AUTHORIZED CERTIFYING OFFICER OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION (COMMISSION) REQUESTS AN ADVANCE DECISION AS TO THE PROPRIETY OF PAYMENT OF AN INVOICE SUBMITTED BY HERTZ SYSTEM, INC., FOR AUTOMOBILE RENTAL CHARGES THAT ACCRUED FROM THE UNAUTHORIZED USE OF A "HERTZ AUTO- MATIC CHARGE CARD" BY AN EMPLOYEE OF THE COMMISSION.

IT IS REPORTED THAT A NUMBER OF THE FOREGOING CREDIT CARDS WERE ISSUED TO THE COMMISSION PURSUANT TO A HERTZ SYSTEM, INC., AUTHORIZED REPRESENTATIVE CREDIT AGREEMENT EXECUTED BY THE COMMISSION AND HERTZ IN SEPTEMBER 1965. THE AGREEMENT STIPULATES IN PART THAT FIRMS RECEIVING SUCH CARDS "ASSUME FULL RESPONSIBILITY FOR THEIR USE *** (INCLUDING) PROMPT NOTIFICATION FOR CANCELLATION AND REISSUE WHEN A CARD IS LOST OR STOLEN."

IT IS STATED THAT AN EMPLOYEE, A GS-5 CLERK-STENOGRAPHER IN THE OFFICE OF ONE OF THE COMMISSIONERS, WITHOUT PERMISSION, USED ONE OF THE CARDS ASSIGNED TO THE COMMISSIONER'S OFFICE TO RENT AUTOMOBILES FOR HER PERSONAL USE BETWEEN JULY 30 AND NOVEMBER 12, 1973, AT WHICH TIME HERTZ WAS FIRST NOTIFIED OF THE UNAUTHORIZED USE. IT IS REPORTED THAT THE AUTOMOBILES WERE NEVER USED IN THE PERFORMANCE OF OFFICIAL AGENCY BUSINESS. DURING THE PERIOD, NET CHARGES OF $1,482.67, INCLUDING PARKING VIOLATIONS, WERE REPORTEDLY INCURRED.

UNDER THE PROVISIONS OF THE AUTHORIZED REPRESENTATIVE CREDIT AGREEMENT, AND IN PARTICULAR THE REFERENCED STIPULATION OF FULL CUSTOMER RESPONSIBILITY FOR USE OF THE CARDS, WE BELIEVE THAT THE COMMISSION IS CONTRACTUALLY LIABLE FOR ANY CHARGES INCURRED BY UNAUTHORIZED USE PRIOR TO THE TIME HERTZ WAS NOTIFIED OF SUCH USE. SINCE WE KNOW OF NO LEGAL RESTRICTION ON THE AUTHORITY OF THE COMMISSION TO ENTER INTO SUCH AN AGREEMENT, WE FIND NO BASIS UPON WHICH TO QUESTION THE LEGAL VALIDITY OF THE AGREEMENT ITSELF.

ACCORDINGLY, IF THERE IS NO DISPUTE WITH HERTZ AS TO THE AMOUNT INVOLVED, OUR OFFICE WILL NOT OBJECT TO PAYMENT OF THE INVOICE.