Bill 15, Ontario’s recently passed Fighting Fraud and Reducing Insurance Rates Act, promises a sweeping reform of the towing industry and may put an end to at least some of the scams that result in consumers and their insurance companies paying $1,500 to $3,000 for a simple tow within the GTA.
Under the disclosure provisions of Bill 15 and the proposed regulations scheduled to come into force early next year as part of the Consumer Protection Act, towing operators will be required to provide drivers with a statement of rates in writing and a copy of a form authorizing a tow.
They will also be required to produce a detailed invoice listing the tow and storage services provided prior to demanding or receiving payment.
The invoiced amount cannot be more than 10 per cent of the authorized estimated amount and, for the first time, towing operators will be required to accept payment by credit card “or any other prescribed payment method at the consumer’s choice.”
All of this is a huge step in the right direction, according to Pete Karageorgos, director of consumer and industry relations with the Insurance Bureau of Canada.
“In many cases currently, you have individuals who receive the service and don’t know how much it’s going to cost because the (towing operators) say ‘Don’t worry about it. Your insurance company will pay for it.’ ”
At the end of the day though, it’s policyholders who end up paying through their insurance premiums, so “to manage those costs, it’s best for consumers to know what they are up front,” said Karageorgos.
Bill 15 also goes after kickbacks, prohibiting towing operators from recommending body shops and salvage or storage yards unless asked to do so. If a recommendation is made, towing operators have to provide the consumer with a written statement revealing what’s in it for them.
In some cases, consumers are duped into signing a blank work order for bodywork at the scene of the crash, said Karageorgos. “When the insurance company gets around to moving the vehicle to the customer’s preferred shop, they’re told, ‘Oh, we’ve already started repairs. The owner gave us authorization.’ The driver signs without really knowing what he’s signing because he’s just been in an accident and isn’t thinking straight.”
The new regulations are to be phased in beginning in early 2016, at which point the Ministry of Government and Consumer Services is responsible for enforcing them.
Consumers can avoid a lot of grief by calling their insurance provider as soon as it’s safe to do so — “ideally while they are still at the scene of the accident so we can provide the best possible real-time advice tailored to their specific situation and based on the details they are able to provide,” said TD Insurance spokesperson Crystal Jongeward.
To ensure repairs are performed to the highest standards and at reasonable cost, consumers are advised to have their vehicle towed to their dealership, a body shop they can vouch for or one recommended by their insurance company.
One of the biggest concerns is the rate sheet tow operators are required to disclose prior to receiving a driver’s authorization
Bill 15 doesn’t require tow operators to file their rates with any government authority or in a database accessible online. Nothing in the legislation or the draft regulations prevents them from having multiple rate sheets — one for luxury vehicles, one for beaters. One for a cold, snowy day, another for balmy weather.
Many municipalities in the GTA, including the city of Toronto and Vaughan, do require towing operators to file their rates, allowing insurance companies and consumers to call and confirm that they aren’t being ripped off.
That’s not the case for most of the 400-plus municipalities in the province, but it’s the GTA where the worst predators tend to congregate and consumer complaints have forced municipalities to get tough.
“Similarly, what happens if a collision occurs on a Sunday when the body shop or dealership is closed?” asked Karageorgos. “I may have been dropped off at a rental car agency and directed the tow operator to take my car to my dealership, but on Monday morning I call and find out that it’s not there.”
To avoid surprises like this, it may be best for the consumer to accompany the tow operator to the body shop to make sure the vehicle is left there or even to pay for the tow personally and get reimbursed by the insurance company.
Violations of the bylaw can result in fines or the revocation of a towing operator’s licence.
The city of Toronto has a set fee of $188 to tow a vehicle to a collision-reporting centre from a highway and $166 from a city street, and requires towing operators to file a rate sheet for other towing services related to mechanical breakdowns and subsequent tows from a collision reporting centre to a body shop.
“We don’t approve the rates,” said Lorraine Chua, senior policy and research officer with the city of Toronto. “It’s just a mechanism to make sure that whatever they charge is consistent with what they filed.”
Toronto put the brakes on a review of the tow-truck industry when the province began working on Bill 15, but will hold public and stakeholder consultations this winter with a report going to the Licensing and Standards Committee in the first quarter of 2016.
The Provincial Towing Association (PTA), which represents approximately 200 of the 1,200 towing operators in the province, is up in arms about another provision of Bill 15 that will require operators to have a Commercial Vehicle Operators Registration certificate, which will limit the number of hours they can work and subject them to Ministry of Transportation inspections and a host of other requirements.
PTA executive director Doug Nelson warns that the added bureaucracy will chase towing operators out of the business, reduce service during snowstorms and leave motorists waiting for hours at the side of the road.
Neither is he impressed with the disclosure and authorization provisions of the bill, arguing that they don’t have enough teeth to put an end to the scamming. Asking someone who has just been involved in an accident to be composed enough to review a towing operator’s rate sheet and authorization form is unrealistic, said Nelson.
“The only way to end fraud and stop the abuse of consumers is to establish a single, (province-wide) knowledgeable management body to enforce the regulations and stop the discreditable conduct,” claimed the PTA in a submission to government. Towing operators would submit their rates to an administrative authority with representation from industry, government and “directly involved stakeholders,” and have to abide by them. If the rates are way out of whack, the authority would ask the towing operators to justify them or revoke their licence.
According to Karageorgos, “we’ve made progress and the government is moving forward, but we’re not at the end of the journey. There are some blanks to be filled in and some that are glaring that need to be addressed. Bill 15 and the regulations enforcing it,” he said, “are a step in the right direction, but the other piece is consumer education and outreach.”
Even then, it’s best to be on guard. There are a lot of honest towing operators out there, but not everyone who shows up after you’ve crashed your car or had a breakdown is a knight in shining armour.