The incidence of auto insurance fraud in Ontario is blamed as part of the reason the province’s motorists can pay more than twice as much for car insurance compared with their counterparts across the country. In an attempt to get the problem under control, the provincial government introduced legislation in 2014 to combat both fraud and rising rates. One of the big features of the legislation is addition controls and regulation on the towing industry.
Tow truck operators protesting the provisions of the Bill staged a rally at Queen’s Park in early April. The chief concerns of the protest included the new requirements for towing operators. Protestors complained that the rules were onerous on small one and two-truck operations and unfairly favoured larger companies. Citing increased administrative costs threatening small operations, the implication is that consumers will pay more for towing as small operations close and large companies gain a stranglehold on the business.
Protection of Consumers
One element of car insurance fraud involves staged accidents with the participation of towing services, who respond quickly and artificially boost fees that are then billed back to insurers during settlement. Provisions of the Bill seem targeted toward legitimizing towing operations by making registration more accountable through an extensive overhaul of the regulations covering the towing and vehicle storage industry.
As well as revising regulations, the legislation provides for a Tow and Storage Consumer Bill of Rights to serve as a basis for consumer expectations and protection against rogue operators.
Currently, towing operators are required to provide consumers with an itemized invoice of services provided. The new rule prohibits towing companies from charging consumers unless information about the services has been previously shared with the consumer.
Preauthorized permission for services is another new rule. Tow and storage providers can’t charge a consumer for services unless the consumer requests the services. Where an estimate for services is provided, operators are now prohibited from charging more than 10 percent above the estimate.
Towing operators will be required to post and maintain current rates for services provided, as well as making these available to the public.
Also made mandatory will be the acceptance of payment based on the customer’s preference.
Customers will now be able, without charge, to remove personal property from a towed or stored vehicle, without restriction by the towing or storage operator. The operator cannot deny access or withhold the consumer’s belongings against payment of fees.
Lack of Support For Tow Truck Protest
Far fewer than the 1,200 vehicles expected showed up for the tow truck protest. While organizers told media this was due to towing operators being discouraged, the low turnout could suggest objections to the legislation are not widespread in the industry. Since the new rules prohibit activities with fraudulent practices in mind, reputable towing and storage operators may not be concerned with the impending restrictions.