The American Trucking Associations, the American Property Casualty Insurance Association and the Coalition Against Insurance Fraud have announced a new partnership that will focus on tackling scams by tow truck operators and staged crashes.
Combining their resources, they hope to focus policymakers’ attention on creating legislation that will curb towing fraud and staged accidents in the industry.
In a joint press release on April 5, the organizations stated the evidence that led to their commitment to combating these serious issues.
Commercial trucking companies have been targeted by tow truck operators who abuse insurers and crash victims by showing up to sites without authorization. Vehicle owners are charged excessive rates and fees in some cases.
According to Forbes, some of the different types of towing fraud are:
- Gate fees are when an impound lot charges a “gate fee,” “labor fee” or “release fee” to have someone open the gate. These types of fees may be illegal in your state.
- Inflated fees happen when a tow truck company charges fees above your insurance company’s policy limits and then demands you to pay the difference. It’s a good idea to get your insurance company involved if you suspect a tow truck company inflates its fees. For example, owners of a tow truck company in Philadelphia were indicted last year for allegedly inflating their fees more than five times the industry standard.
- Patrol towing is when a tow truck operator has a spotter on the lookout for illegally parked cars. The spotter notifies the operator (also known as a “bandit”), who then tows the car to an impound lot, where you might be charged inflated or unnecessary fees.
- Steering is when a tow truck driver comes upon an accident (they often monitor police scanners) and tries to convince you to tow your car to a shop they’re collaborating with. Steering is illegal in most states.
“We know from our members that some of the most egregious examples of abuse arise out of accidents involving commercial vehicles,” said Robert Passmore, APCIA’s department vice president for auto and claims policy. “We look forward to working with the other members of the CAIF and ATA to address these issues across the country.”
“In some states, it’s not uncommon for a tow truck operator to arrive unsolicited at an accident scene, pull a tractor-trailer out of a ditch, tow it away and on the scene present the carrier with an inflated invoice, even holding the carrier’s truck hostage until the bill is paid,” said Jennifer Wieroniey, executive director of ATA’s National Accounting & Finance Council.
In a recent survey, ATA found that out of nearly 200 motor carriers, 77% of respondents cited law enforcement referrals as problematic when selecting a towing company and 70% reported they faced serious issues getting their cargo released after a tow.
Staged crashes were also cited as a major industry issue, especially in the wake of a recent scheme where accidents with semi trucks were staged in an attempt to defraud trucking and insurance companies.
“The partnership brings the nation’s largest property-casualty insurance and trucking associations together and pairs them with the coalition’s formidable consumer interest credibility and voice in the field of insurance fraud,” Coalition Against Insurance Fraud Executive Director Matthew Smith said in the joint statement. “When it comes to changing the landscape for policy holders in the specific arena of towing and staged accident fraud with these three organizations, the possibilities are endless.
“By joining with APCIA and the Coalition Against Insurance Fraud, we are confident we can put an end to these unscrupulous and unethical practices,” ATA Chairwoman and president of Findlay, Ohio-based Garner Transportation Group, Sherri Garner Brumbaugh said.
The partnership plans to release a guide in the future on how to avoid becoming a victim of towing fraud.
The National Accounting and Finance Council is also asking for similar feedback through a brief survey to help establish priority problem states and cities, and recognize new patterns of fraud.
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