Legislation to prohibit car rental companies from charging excessive fees to customers who borrow devices used to pay tolls electronically was advanced Monday by an Assembly committee. The bill was sponsored by Assembly Democrats Paul Moriarty and Sheila Oliver.

“Car rental companies are taking advantage of visitors to New Jersey by charging them an exorbitant amount of money to borrow an E-ZPass tag. Aside from that being morally wrong, it has negative implications for our economy,” said Moriarty (D-Camden/Gloucester). “In a state with a multi-billion dollar tourism industry, it’s in our best interest to make sure people don’t feel like they were bamboozled after driving on the New Jersey Turnpike.”

As cashless tolls begin to supplant traditional tolls, where motorists may use bills and coins, state law must protect consumers who rent vehicles from inflated charges associated with paying tolls, the sponsors noted.

The bill (A-4867) would limit fees for using toll transponders – small electronic devices used in lieu of cash to collect tolls on roads, bridges and tunnels – in rental cars. The legislation would prohibit a rental company that equips a vehicle with a transponder and does not allow a renter to opt-out of its use from charging more than $2 each day for the use of the transponder, in addition to the actual cost incurred for any toll. Renters would not incur this fee on any day on which they do not drive through a toll or when they drive through an area where no alternative to paying via an electronic toll collection exists.

Under the bill, companies that provide or offer cars that come with a transponder would be required to include the applicable terms and conditions of its use in the rental agreement issued to the renter and post any applicable terms and conditions in a conspicuous location on the business premises.

“The transponder fee often comes as a complete surprise to rental car customers, because companies are not required to notify consumers that their fee for driving on the same road will be far higher than non-renters’,” said Oliver (D-Essex/Passaic). “Requiring rental car companies to be more transparent will ensure that such poor business practices do not continue in New Jersey.”

A violation of the bill’s provisions would be considered an unlawful practice under the Consumer Fraud Act, which is punishable by a monetary penalty of up to $10,000 for a first offense and up to $20,000 for any subsequent offense.

The measure was advanced Monday by the Assembly Consumer Affairs Committee, of which Moriarty is chair.