NICB: Ongoing Towing Scams Proving Costly for Chicagoans, Insurers

August 25, 2020

Though perhaps not the absolute worst region in the U.S. for insurance scams involving towing abuses, towing scams in Chicago continue to cause problems for residents and insurers alike, according to the National Insurance Crime Bureau (NICB).

Exorbitant towing and storage fees, unsolicited tows, and dangerous, unsafe practices are among the towing-related abuses vehicle owners face in the Chicago area.

In Chicago, a typical tow should cost a vehicle owner less than $400, the NICB says. However, towing bills in the city range from $3,000 to $5,000 due to extreme towing and storage fees. These combined fees could mean once a victim’s car is towed away, they may not be able to afford to get it back.

Public safety is also at risk. In June 2020, six people were injured in a bus accident as the bus driver swerved to avoid a collision with a tow truck seeking to be the first to an accident. And in extreme cases, gunfire has erupted between rival towing services attempting to provide the service.

The NICB is supporting an amendment to city ordinance which would require additional licensing to improve safety. The license will allow tow operators to tow, relocate and store damaged or disabled vehicles from public areas, such as accident scenes.

In part, when renewing or applying for licenses, tow companies must provide proof of a commercial vehicle relocator license, provide a statement certifying the applicant has never been convicted of a felony, and proof of insurance coverage. Once approved, a copy of the license must be placed in plain view within the tow truck and in each office in view of the public. If it is discovered a tow operator falsified or lied on the application the license will be revoked. Additionally, violating accident scene solicitation regulations will become a penalized offense.

The NICB has installed new billboards to alert Chicago drivers to the problems faced by these dishonest towing services telling them to contact the Chicago City Council to end rogue towing practices.

Other cities and states have implemented similar measures to reduce predatory practices by towing companies, according to the NICB.

California passed legislation prohibiting towing companies from stopping at an accident scene unless called by the vehicle owner or law enforcement, and towing companies must provide written estimates of all charges to the vehicle operator before proceeding with a tow.

Missouri has similar laws and Ohio allows civil action by insurers against a towing company operator to recover a vehicle.

The city of Philadelphia implemented a tow rotation system protecting consumers from towing abuse and combat insurance fraud. In Philadelphia, towers are prohibited from accident scene solicitation, and sets requirements for towers at an accident scene, and establishes a consumer bill of rights. Any tow service violating city regulations can be penalized.

The NICB has identified the following metropolitan areas in the U.S. as the five worst in terms of towing abuses:

  1. Los Angeles/Long Beach/Anaheim
  2. New York/Newark/Jersey City
  3. Chicago/Naperville/Elgin
  4. Philadelphia/Camden/Wilmington
  5. Houston/The Woodlands/Sugar Land

Source: NICB

Topics Carriers Legislation Auto

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