Easycar, the car-hire firm set up by Easyjet founder Stelios Haji-Ioannou, is being forced to defend its failure to allow customer refunds before the European Court of Justice.
Easycar does not refund customers
The Office for Fair Trading and Easycar have asked the European Courts to settle their dispute over whether the rental car industry is covered by the European Directive on distance selling.
The Directive enforces a cooling-off period for consumers who want to cancel goods or services purchased by telephone, internet or mail order.
But Easycar argues that, as a transport services firm, it should be exempt.
Acting upon a host of complaints from unhappy Easycar customers, the OFT has argued that car-hire firms should not be classed as a transport service.
It is expected that the judgement may take up to two years.
Last week, it was reported that Easycar was planning to postpone plans to list on the UK stockmarket while it tried to stem losses.