PCB scooter business settles suit

PANAMA CITY BEACH — Amid the heated debates over the future of scooters in Panama City Beach, the outspoken owners of a rental business have settled a lawsuit that alleged deceptive practices against its customers, according to court records.

California Cycles, 13416 Front Beach Road, settled the lawsuit Wednesday morning in the 14th Judicial Circuit that was filed last week on the part of the Attorney General’s Office Department of Legal Affairs. The lawsuit claimed the scooter rental business had charged 56 customers for damages to the vehicles they did not incur. As part of the settlement, California Cycles will have to pay a total of $110,000 and devise ways to assess vehicle damage and respond to complaints, court records stated.

The settlement, however, stopped short of stating the owners of California Cycles — Rich Roof and Colleen Swab — admitted they violated the law. Swab completely denied any wrongdoing and further said the decision to settle the complaint was purely economic.

“We didn’t do anything wrong, and there was no proof,” Swab said Wednesday in an interview with The News Herald. “It’s unfortunate, but we had to come to this agreement instead of having to pay an attorney to try and fight it. It would be a lot more costly.”

While the total payout from California Cycles totals $110,000, only $20,000 has been set aside to reimburse complainants. The remaining $90,000 goes toward the Attorney General’s Office for attorneys’ fees and civil penalties, the settlement states.

In total, 56 former customers came forward to claim damages after the business allegedly either withheld their rental deposits or had a credit card charged for damages to rental scooters, golf carts and motorcycles.

On the high end, one customer was slated to be awarded $1,350, many were awarded about $100 and some will be refunded as low as $50. The allocated refunds only come out to about $13,000 for complaints already filed against California Cycles, while the remaining $7,000 will available to affected customers who can file a complaint by Dec. 2.

Although the case was only filed June 2, Swab claimed the preparation had been ongoing since 2011 and attributed the number of complainants to solicitations on the part of the Panama City Beach Police Department. She pointed to a review on a popular travel website — in which several people issued complaints about the business’s practices — that encouraged people to contact Beach Police.

The review appeared to be written by a man from Georgia who claimed he and his son were charged about $1,000 after one of their scooters broke down.

Beach Police Chief Drew Whitman said ordinances to prevent deceptive scooter rental practices had been in place for some time but were revised within the past five years to prevent a loophole called “cross-collateralization,” the practice of keeping the deposits of a group because one vehicle sustained damage.

“It didn’t seem fair to me to charge the whole group because one scooter gets scratched up,” Whitman said. “We wanted to find out who was being done wrong.”

While not an admission of guilt, the settlement prevents California Cycles from telling consumers they are obligated to pay for damage to rented vehicles when the consumer did not damage the vehicle or when the damage is due to normal wear and tear. The agreement also requires California Cycles to return consumers’ deposits for rentals unless the company can document the consumers are at fault.

California Cycles’ rental contract must clearly and conspicuously disclose specifics about the deposit, property damage coverage, how long a vehicle can run without being recharged and that the consumer has a right to a refund if the vehicle breaks down. California Cycles also is prohibited from requiring consumers to recharge vehicles before they are returned.

The settlement comes amid heated debates at Panama City Beach Council meetings, in which council members have postured toward abolishing rental scooters.