According to a Wednesday report by the U.S. Public Interest Research Group, California, Texas, and 14 other states have laws that prohibit “kickbacks from towing companies.” The non-profit is calling on the 34 remaining states, including Arizona and Louisiana to adopt similar measures.
Tow companies will continue to use their “predatory” towing practices if more states do not pass a ban, PIRG stated.
According to Teresa Murray, a PIRG consumer monitordog, “You have cars being towed that aren’t causing an problem.” CBS MoneyWatch was informed by Murray. Bad things can happen when you have an incentive call a tow company.
Tow companies make their money by charging $200 to $300 per vehicle to the owner to come and retrieve it from an impound yard. Murray stated that some companies won’t mind charging $20 or $50 to customers if they encourage them to call other cars to be tow.
Drivers are often towable for illegally parking their cars on private property, unpaid tickets, or having an expired vehicle registration.
Murray stated that some companies may be abusing their power. Murray said that PIRG received complaints from drivers about how some tow companies remove vehicles for minor offenses like low air pressure in tires.
Murray stated that some tow truck drivers even go to senior citizens complexes and college towns to find vehicles. Murray believes that tow companies target these communities because they believe the people won’t have time or the resources to fight for being tow-trucked.
She said that “a lot of the cases we hear are people who have been in a parking spot for less than five minutes.” They are just preying upon people.”
Towing kickbacks are quite common in the United States, PIRG stated, but Murray highlighted a case in Detroit involving officers.
Three former police officers were accused of calling for cars to be tow-towed and then working with the towing company to make cars wait in an impound yard for weeks, accruing fees. Once owners returned their vehicles, the tow company would increase the storage fee.
According to a federal Indictment, the officers are accused of receiving kickbacks totaling thousands of dollars under the scheme.
Vehicle towing in the United States is already a highly lucrative industry. According to IBISWorld, automotive towing will grow to $11 billion this year from $10 billion in 2020.
Sometimes, there are legitimate reasons to tow someone’s vehicle. For example, if it blocks emergency department parking spaces at a hospital or occupies assigned spaces at an apartment building. Murray stated that PIRG does not advocate for a ban on vehicle towing. Murray stated that most towing companies do their jobs ethically. However, the report is designed to prevent a few businesses from doing so.
