A major 4WD hire company is penalising its customers for driving off-road or after dark, and then allegedly threatening to drag them into court when they dispute the extra charges or threatening to sue for defamation if they leave negative reviews online.

Now the company itself is being hauled into court, accused by the consumer watchdog of unconscionable conduct.

Smart Corporation Pty Ltd, trading as Australian 4WD Hire, has allegedly ripped off hundreds of customers travelling across Alice Springs, Broome, Cairns, Darwin and the Gold Coast.

Many were overseas tourists who only learnt when they returned home that thousands of dollars had been deducted from their credit cards by the hire car company.

They had been penalised for a variety of supposed offences including driving after sunset outside of built-up areas, crossing creeks or rivers, driving off-road in wet conditions or exceeding the speed limit.

A complaint against Australian 4WD Hire on TripAdvisor. Credit: TripAdvisor

The company uses GPS tracking technology to constantly monitor its customers and detect breaches of the terms in their contracts, which have myriad conditions that the Australian Competition and Consumer Commission says are unfair and unconscionable.

In documents filed in the Federal Court, the ACCC also alleges the company demanded payment from customers for damage and unreasonable wear and tear, without providing evidence any damage had occurred, and then threatened legal action or going to the police when customers disputed the extra charges.

Australian 4WD Hire vehicle. Credit: Facebook

Small print unfair

The small print in Australian 4WD Hire's contracts also include a 'non-disparagement clause', meaning dissatisfied customers are threatened with breach of contract and defamation if they leave a negative review online.

The ACCC has investigated more than 60 complaints of alleged fraudulent activity against Australian 4WD Hire.

It is now seeking declarations, pecuniary penalties and compensation for customers, along with banning orders against former director Vitali Roesch, who is now the company's fleet manager, and his wife, company director Maryna Kosukhina.

Vitali Roesch and his wife Marnya Kosukhina. Credit: Facebook

Chevron Right Icon 'Unscrupulous, unfair, fraudulent and quite possibly illegaI.'

In June 2018, Queensland state MP Tim Nicholls used parliamentary privilege to describe Australian 4WD Hire's conduct as "unscrupulous, unfair, fraudulent and quite possibly illegal".

The hire car company was threatening Australia's reputation as a friendly, safe and honest holiday destination, Nicholls said in parliament.

Threats

He also outlined cases where customers were billed by the company for extensive repairs to sub-standard vehicles - including complete engine rebuilds - after they were accused by Roesch of gross driver negligence.

When customers challenged Roesch over extra charges that could run into tens of thousands of dollars, they were confronted with "threatening and aggressive behaviour", he said.

Queensland LNP MP Tim Nicholls. Credit: AAP

Nicholls told 7NEWS.com.au he had received more than 100 complaints against the company in recent years, from people as far away as Germany, the US and Israel.

"(The company's operators) know they can get away with preying on foreign tourists because it's so difficult trying to get your money back from a company that's (allegedly) fraudulently debited your credit card and is on the other side of the world," he said.

Local tourists had also fallen victim to Australian 4WD's business practices, Nicholls added.

He said he had received many complaints from Australians who had been threatened by Roesch with drawn out legal proceedings and/or defamation suits after challenging extra charges or posting negative reviews on TripAdvisor.