Following up on the recommendations from last year’s Anti-Fraud Task Force, the Ontario Liberal government is promising tough new measures to protect consumers from being ripped off by unscrupulous tow truck drivers and storage companies.
Consumer Services Minister Tracy MacCharles says she's heard too many stories about tow truck drivers using “dubious tactics”' such as demanding hundreds of dollars in cash at an accident scene before any service is provided.
“We are strengthening consumer protection for drivers involved in traffic collisions or in need of roadside assistance,” said Minister of Consumer Services Tracy MacCharles “Drivers should have the confidence that the tow truck operator helping them is reputable and will treat them fairly.”
She says other drivers find their vehicles are towed far away to a storage centre that then hits them with “unexpected large” bills before they can get their car back.
“A number of serious concerns have been raised about the industry by consumers and by groups such as the
Insurance Bureau of Canada,” MacCharles told reporters.
“We support the government's initiatives to protect drivers requiring towing services,” said Ralph Palumbo, vice-president, Ontario, for the IBC. “Consumer Bill of Rights is a positive step. We are hopeful that these measures in the bill will address concerns about fraud as noted in the Auto Insurance Anti-Fraud Task Force Report." (continued.)
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The IBC's Towing Working Group, in response to a Ministry of Consumer Services consultation, has recently recommended to the government:
-Establish a provincial tow license and include tow trucks within the Commercial Vehicle Operator's Registration (CVOR);
- Implement a standardized invoice and tow authorization form;
- Enact the Fair Value Guidelines principles; and
- Shorten the notice period in the Repair and Storage Liens Act.
“We look forward to working with the government on these important issues,” said Palumbo. “Once all of these items are addressed, our roads will be safer, and consumers will be better protected and informed.”
The legislation would force tow truck operators to get permission before charging for towing and storage services, post their prices and provide an itemized invoice detailing all charges and the total cost.
In 2010, tow truck operators in Ontario had a 19.7 per cent collision rate, compared to only 1.1 per cent for drivers of other commercial vehicles. MacCharles says their collision rate is so high because they often race to accident scenes to try and get the business first. (continued.)
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MacCharles says regulating the towing industry will help lower costs and reduce fraud, which will in turn allow insurance companies to lower premiums.
There are about 1,200 tow truck and storage operators and 3,000 tow truck drivers in Ontario.
The announcement comes after almost a year-long process of acting on the recommendations made by last winter's Anti-Fraud Task Force, and following last May’s provincial budget that narrowly passed thanks to NDP support of the minority Liberal government. Part of that deal with the NDP included a commitment to a 15 per cent auto insurance rate cut, of which 8 per cent is expected to be in place by this August, with the remaining 7 per cent to be realized in 2015.
There had been fears among those in the insurance industry that a non-confidence vote would have resulted in an election, and those fraud reforms being deferred another year.
Among the recommendations from the Task Force included regulation of the towing industry, especially in the Greater Toronto Area, where the majority of insurance fraud exists.
