According to the National Highway Traffic Safety Administration there are approximately 16 million auto crashes in the United States each year. Of those nearly 11 million require a vehicle to be transported away by a tow truck. The average crash related towing and storage fee was $412 in 2010.
That translates into a $4.5 BILLION towing and storage fee industry.
A Few Bad Apples
While the vast majority of tow companies are believed to operate honestly and with integrity, there are some that have abusive business practices. One such tactic involves failing to provide prompt notice to vehicle owners that a vehicle has been towed and where it is being stored. Another tactic involves requiring a vehicle owner to provide elaborate documentation to access or retrieve a vehicle, often running the bill higher than it should be.
In addition, some tow companies and/or storage yards charge what is called “unbundled fees”. It is an additional fee for administration, cleaning, helpers, mileage, fuel, labor, winching, dolly, extra hook-up and more. These extra fees are often included into the larger number without any sort of itemization. The average consumer does not know they can ask for an intemization.
Cities with Aggressive Tow Practices
The cities gauged by one online source as having the most aggressive towing practices include: Houston, Atlanta, New York, Philadelphia and Chicago.
The five states considered to have the most aggressive towing practices are California, New Jersey, New York, Illinois, Pennsylvania.
Drivers cite the following most common towing related problems:
1) artificially high storage and towing charges and fees.
2) A release process that is difficult or inconsistent
3) Towing companies with poor customer communication
4) Not allowing immediate access to vehicle owners and/or insurance adjusters
Insurance companies have long complained about the business practices of some towing companies. Complaints include an inability to challenge towing or storage fees, vehicle owners and insurance adjusters have no leverage in a towing situation due to 1) towing costs that continue to accrue and grow larger with each passing day and 2) an attitude of take it or leave it (as far the billing goes) from these towing and storage facilities.
Vehicle owners are often faced with a storage facility that limits an owners access to their vehicle to retrieve personal belongings.
Mesa, Arizona Towing Scam – 5 People Arrested
Mesa police began an investigation in 2010 after numerous complaints surfaced about a towing company called SWAT Towing/Auto City Towing. The investigation culminated in 5 arrests in December 2012. The charges include: legally parked cars getting towed illegally, not responding to vehicle owner requests to retrieve their vehicle even when customers tried paying their bills, and selling vehicles they had no right. Charges include various fraud-related charges, including the participation in a criminal syndicate, trafficking in stolen property, auto theft, forgery and illegal control of an enterprise. Detectives believe hundreds of victims may have been hurt by this scheme.
According to one news report, the following are allegedly true stories:
An Iowa vehicle was towed 7 miles and received a bill for $892
Virginia towing company added $350 in admin fees for simply mailing letters to vehicle owners
A Washington DC storage facility added $400 per day fees for large vehicles
A Chicago towing company billed an owner $915 following a minor accident plus added $100 storage fees.
There is a movement afoot to add some regulatory actions that would force towing companies to communicate with vehicles owners within a certain time period, to add transparency to their billing to reduce improper billing schemes, eliminate storage fees for days the facility is not open and owners have no ability to retrieve their vehicle, and the elimination of phantom fees like charge a vehicle owner for the right to retrieve personal belongings from their vehicle or moving the vehicle from one location to the other within the same facility.