Which? said many tourists to Spain were getting a raw deal, and the Spanish group Organisation of Consumers and Users (OCU) said unlawful practices by car hire companies were damaging the image of the country as a holiday destination.
Which? said confusing policies meant holidaymakers were often hit with additional, non-refundable charges for fuel that were not always clear at the time of booking or buried in the small print.
It cited the full-empty policy where hirers must pay for a full tank of petrol on arrival but are not offered refunds for returning the car with unused fuel.
Almost three-quarters of Which? members (72 per cent) who had experienced this thought they had been "ripped off" by being forced to pay a fuel price that was higher than at local garages. Some six in 10 members who booked a car with a full-empty policy said it was the only option available to them.
The watchdog said tourists could find there was little chance of using a full tank, especially on the small Spanish islands.