News reports of recovery agencies battling one another can be found dating back nearly two decades. Towing providers describe the Greater Toronto Area as being “the worst” in all of Canada when it comes to skirmishes between providers. Roadside brawls turned into gunfights and murders. More than 50 cases of arson have been connected to the towing industry, including multiple tow trucks being set ablaze throughout the years. Some towing providers even began intentionally causing accidents on highways and in parking lots to get more jobs and more kickbacks.
Many critics blame the lack of industry regulation, something which only recently came into existence for towing providers, but still doesn’t address what happens after the vehicle is taken off the truck.
Towing can be quite lucrative for both drivers and agencies, mainly because the broad idea of towing a car is just the start of where money is made. While some cities like Toronto have regulated the cost of a first tow fee to a maximum of $279.68 (about $218 USD) for most passenger cars, that’s far from the only compensation that a towing company might receive. A company might collect fees for storage, on-hook and off-hook charges, mileage, and more. And when consumers attempt to get their vehicles back, difficult loopholes and missing information about where their vehicle was being held often caused intentionally inflated storage fees.
These towing bills can add up to thousands of dollars, resulting in Ontario even enacting a law to make towing bills more transparent and aid consumers in paying a fair price. The laws now require companies to have rates clearly posted, contact details on trucks and places of business, requiring the consumer to be told where their vehicle would be towed, and requiring the disclosure if they have a financial incentive for towing a vehicle to a particular repair shop.
That last point about having a financial interest in a repair shop is central to this issue. As police and lawmakers would later find out, this is where some towing companies begin to make significant income thanks to kickbacks from sketchy auto body repair shops. And once at the repair shop, some car owners were even told that they didn’t have a choice where they could have their vehicle repaired, with the shop refusing to release a vehicle without the consumer paying huge storage fees.
In the Toronto Star’sThis Matters podcast, crime reporter Peter Edwards says that tow truck drivers are making anywhere from $400 to $500 in bribes on certain calls. In fact, it’s estimated that a driver can make up to $2,000 per day from kickbacks alone. And while auto body repair shops are the most notable providers of kickbacks, Edwards says that physiotherapy clinics, law firms, and car rental agencies are also to blame. Just why are auto body shops greasing the palms of towing companies? According to insurers and lawyers, it’s part of this widespread fraud. Following a tow, these body shops will submit inflated estimates to insurers, resulting in a significantly higher bill for their work without actually providing services. The same goes for the physiotherapy clinics which reportedly exaggerated personal injury claims for those hurt in an auto accident and the rental car agencies which charged inflated rates for vehicle loans that insurers would then reimburse a policyholder. At the front line of all of this are tow truck companies making the referrals.
From thedrive.comWhile the new guidance addresses some concerns regarding which companies can provide the initial tow and how frequently they can be called to an accident scene by police, it might not do enough to protect consumers against towing companies that still bring vehicles to preferred body shops that provide kickbacks. Consumers may find themselves facing the same problems if they call a particular towing company, or if they get into an accident on a stretch of road not protected by regulations. It’s unclear if lawmakers will step in to further address the clearly recognized problem surrounding organized crime in Canada’s towing industry, or what the future of towing looks like in the GTA.
Either way, if you ever find yourself needing a tow in Toronto, be wary of who drives off with your car.
