New York's attorney general has reached a settlement with Zipcar Inc. over vehicle damage fees charged to 5,000 members from 2011 through 2015.
New York law requires giving consumers an opportunity to dispute damage fees before they're assessed.
Investigators say Zipcar charged fees, which can range up to $1,000, before notifying consumers.
Zipcar lets members rent cars on an hourly or daily basis and pick them up at various spots.
Contracts say members are liable for damage while the vehicle is in their possession.
Zipcar agreed in the settlement to refund damage charges assessed against consumers who contested their responsibility, pay $35,000 to the Attorney General's Office and comply with New York law.
Zipcar did not immediately reply to a request for comment.