Trading Standards is investigating Europcar after complaints of overcharging.
According to evidence seen by the Telegraph, the company is being investigated over billing concerns, including inflating the cost of repairs to damaged windscreens and other repairs by up to 300%.
News of the investigation comes a week after Europcar announced its intention to buy Europe’s leading low-cost car-rental company Goldcar.
A spokesman for Europcar said: "Europcar takes the allegations very seriously and is conducting a thorough internal investigation.
"The company is co-operating fully with Trading Standards in its investigations. It can make no further comment at this point."
The investigation is focused on the UK branch and Europcar, which operates in 140 countries worldwide, has not said whether its offices abroad are operating the same rules.
