Law targets pirate operators who mislead customers, charge exorbitant fees
Illinois has adopted a new "truth in towing" law to crack down on predatory tow-truck operators at accident scenes.
The legislation was sponsored by Illinois state Sen. Ed Maloney (D-Chicago) and state Rep. Kevin McCarthy (D-Orland Park), and was spurred by a series of columns written in the Daily Southtown newspaper about what columnist Phil Kadner characterized as "pirate tow-truck operators" operating primarily in Chicago who misled customers and charged exorbitant fees for vehicle recovery.
These rogue operators often appear at accident scenes, and after assuring drivers that the cost of the tow will be covered by their insurance, haul the vehicle to an auto pound. Fees to retrieve the vehicle can be as high as $1,500 in some cases, and operators demand payment in cash.
"The last thing anybody should have to worry about after a car accident is whether the person towing their vehicle is going to rip them off and add to their trouble," says Gov. Rod Blagojevich, who signed the bill at the end of August. "This bill will help protect thousands of drivers from unlicensed towers who prey on accident scenes."
The new law, which takes effect in July 2008, requires that the Illinois Commerce Commission (ICC) license safety relocators. It also requires the customer to authorize a tow before it occurs, and that the tower must inform the customer of the address of the location where the vehicle will be towed; provide the cost for towing, storage and other fees; and provide an itemized description of the vehicle owner's rights (including the right to an itemized invoice, the right to have the vehicle returned during normal business hours, and the right to pay in cash or with a credit card).
Tow-truck drivers must also have their company name, address and phone number displayed on the truck. Operators must keep invoice records for five years, and provide them upon request to the ICC. Towing contracts and forms cannot contain waivers of liability for the tower in the event of vehicle damage.
If the operator fails to comply with any of those provisions, the vehicle owner cannot be charged any fees, and the operator can have his license suspended, as well as face fines and prosecution.
A provision that would have called for the ICC to set maximum allowable towing and retrieval rates was removed from the bill, because setting those rates would have been outside of the legal authority of the commission.
It remains unclear exactly what effect the new law is going to have on legitimate tow truck operators, according to Joe Pedigo, legislative chair of the Professional Towing and Recovery Association (PTRA) of Illinois. "It's a little early to tell," Pedigo says. "The rulemaking session has not yet taken place, and a lot of how this will work out will happen in the rulemaking session."
As for collision shops, those with their own towing operations will probably be unaffected as long as they have been following the existing rules.
"If you're on the up and up, this doesn't really affect you tremendously," says Mike Randazzo, president of the Alliance of Automotive Service Providers of Illinois (AASPI). "The bill was primarily aimed at Chicago, which notoriously has a lot of these less-than-ethical tow companies."
Shops may be helped somewhat by the provision calling for auto pounds to accept credit cards as well as cash, which was sometimes an issue for repairers in Chicago.
"A lot of these places don't have an office," said Jim Kuhlmey, treasurer for the AASPI, and owner of Elite Auto Body in Chicago. "You call them on a cell phone and they meet you at the yard, but they want cash. It's a hassle trying to get the job, and you pay through the nose to get the vehicle."
According to Pedigo, the wording of the new law raises several questions about exactly how it will be enforced. For instance, the wording of the bill was changed to refer to tow companies as "commercial safety vehicle relocators." Pedigo said that could simply be a semantic distinction, or it could potentially represent a new class of operators that could require separate licensing.
Pedigo also was unclear as to exactly how the new law would stop "wreck chasers" from operating, since some of the provisions of the new bill (like the requirement for address information on the truck) were already part of the existing statutes.
"The guys doing these sorts of things are criminals," Pedigo says. "They don't obey the laws we have already, so how are we going to make them obey this one?"
The PTRA also is concerned that the licensing requirement will make it possible for rogue operators to simply buy a towing license to legitimize their operations, depending on how the commission implements the new law.
Chicago has a long history of difficulty with towing companies. Illinois Attorney General Lisa Madigan filed a consumer fraud lawsuit earlier this year against several towing companies that operated out of a shared facility in Blue Island. The complaint against Road America Automotive, Premier Towing and Collision, and Target Towing & Recovery contends that the towing companies arrived at accident scenes unsolicited, and told car owners that they were sent there by insurance companies or motor clubs.
Chicago also is home to the notorious Lincoln Towing, a company with a long history of consumer complaints. Lincoln was accused at one point of stripping towed cars and selling the parts to scrap dealers (the firm was ultimately acquitted).
"It's a problem," Pedigo says. "It's hurting legitimate towers and hurting our image as an industry. But this problem only exists where the local police departments let it happen. This does not happen in areas where the police are doing their jobs at the accident scenes."
