How to Avoid Tow Company Fraud (2022)
Updated June 15, 2022
Most tow truck drivers are honest and hardworking. They provide a valuable service to our communities and roadways, towing away cars from accidents, pulling people out of ruts and snowballs, and removing cars that violate important parking rules. But some tow truck companies do employ illegal and legal-but-predatory practices to gain profits.
This article will cover those practices and offer practical advice on how to avoid being towed or fight the fines of an illegal tow. We will also give you useful tips on how to ensure that your car is towed properly if your car breaks down. Plus, you’ll find out how to get your insurance company to pay for towing or use car insurance comparison to find a company that does.
Illegal car towing is rare but legal, predatory towing is common.
Knowing your local laws and paying attention to parking rules is the best way to avoid being towed.
It is possible to fight an illegal tow, but it may take time and effort to recover or avoid fines.
The term predatory towing refers to tow companies who utilize unethical practices to inflate their profits.
There are a few outright towing scams you should be aware of—and then there is scammy behavior that’s actually legal. Let’s take a look at the most common scams you can encounter.
First, there are predatory tows from private property. This is when a car is towed from the parking lot of a business that the driver is not visiting. Some towing companies stake out these locations. When they spot a driver violating the parking rules, they swoop in and tow. Often, this is completely legal! It can also happen in public parking spots.
This is sometimes mistakenly referred to as “bandit towing.” But bandit towing is actually when a tow company removes a car that was parked legally in the lot. It can also refer to the practice of towing a car involved in a crash and charging excessive or illegal fees to accident victims. Those fees, often compounded daily, equate to a ransom-like payment for a “kidnapped” car.
Some states ban this practice, but towing companies can easily bypass this law by working with an independent third party that monitors peak towing areas. What’s never legal, but can be hard to fight, is when a car parked legally or in accordance with parking rules is towed. Unfortunately, this happens all the time and can be a matter of luck as to whether you avoid it.
Sometimes, a tow truck service will tow a car legally but charge additional fees that are not legal. Most of the time, people are charged a towing fee plus mileage. They can also charge storage fees if the car is parked on their lot. Some companies and municipalities may charge release fees, especially if you’re towed to an impound lot.
Always ask for an itemized list of your costs and review it carefully. On occasion, fees that are not allowed or are in excess of the local market are assessed. These may be disputed.
Scammers aren’t just limited to towing unsuspecting motorists; sometimes, the vehicle owners call for a tow and get scammed in the process. If you need a tow, you may meet a tow truck driver who insists they can only bring your car to one of their garages. There’s no reason that should be the case unless there’s only one repair shop or body shop in the area.
A good way to avoid this scam is by confirming the tow destination with the driver beforehand. If you encounter this tactic, simply call another company. There’s no reason to work with dishonest businesses.
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When people are determined to scam you, it can be difficult to avoid becoming a victim. However, there are preventative measures you can take to reduce the likelihood that your car is illegally towed.
Know the parking and towing laws in your area: The line between legal and illegal towing differs from state to state and also between municipalities. It’s always a good idea to read up on the laws in your area and the ways that towing companies try to skirt the laws.
Obey parking rules on public and private lots: Many tow scams occur in private lots. Worse, many legal tows happen on private property. And on some public streets, there may be someone who always calls a towing company when they spot an illegal parker. The best defense is a good offense, so always keep an eye out for stated parking rules and read them carefully.
If you called for a tow, don’t give into high-pressure tactics: If a towing company is insisting on doing something with your car that you believe is illegal, refuse to have your car towed. There are other towing companies that can do things the right way. If it feels “off” to you, the chances are that it is. You can always speak with your local law enforcement about your rights.
File a police report: If you believe you’ve been the victim of a towing scam, contact your local police department and ask about your rights. Not only will you be able to recover your car fee-free, but you can also help prevent a future illegal tow.
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There are many reasons that it’s difficult to fight an illegal tow, not the least of which is that fighting the tow is more expensive than paying the tow charge. That being said, here are the three things we would do in the event of a predatory tow:
Verify the rules.
Review local laws and regulations for parking and towing. If the company has violated any, you can file a report with the local police department. You can also use this to verify you’ve been towed legitimately, which can release at least some of the tension. Getting towed is always unpleasant. Any way that you can cut the tension will work in your favor.
Dispute the charge.
If you receive a towing charge that is different from local averages, you can likely dispute the charge. A quick way to understand if you’re being charged a fair price is to call a few tow trucks in the area. Choose ones that are as close as possible to the one that towed you. While this can be a long shot, it is possible to lower the fee or dispute with your bank.
If you believe your car should not have been towed, you may be able to contest the towing in court. This is only applicable to cars towed from public roads.
Speak with an attorney.
You can seek damages in small claims court after a fraudulent tow. The threat of legal action may be enough to encourage a full or partial refund of charges. Just keep in mind that going to court can leave you at risk of covering your legal fees and those of the tow company. Think of this as a last-ditch effort suitable only for extreme and clear-cut cases.
Theoretically, yes. You may be able to work with your credit card company or your bank to recover your costs. If you’ve been charged a fee that’s much higher than local averages or can prove you were parked legally, you may be able to dispute the charge. Speak with the fraud department at your bank or credit card company. They’ll explain the process and offer tips.
You’ll likely need to begin by gathering information and confirming that you were the victim of a fraudulent tow. This may mean taking photographs of the parking signage, asking for the official paperwork concerning the tow, and contacting the local police department. If the tow was fraudulent, you should be able to file a fraud claim with your bank or credit card company.
Depending on their rules, you may be offered an immediate refund, or you may have to submit special paperwork. Most of the time, the bank or credit card company will take care of any legal legwork without your involvement.
Stay calm: Getting towed is a totally frustrating experience. Keeping your cool will help you get the information you need and follow the best course of action.
Know your rights: Getting to know your local ordinances makes it easier to identify a fraudulent tow and know how to take action.
Act quickly: Towing companies may be able to charge you storage fees. Letting your car sit can often work against you.
Floating around the internet are a bunch of “hacks” to prevent towing—turning your steering wheel, using the emergency brake, and more. But these hacks are not reliable! For each hack, an experienced tow truck operator has a way around it. Even if it takes a little longer, a tow truck driver will get it done.
There’s no surefire shortcut to avoiding a tow if you park illegally. Sometimes, it just comes down to luck. So how else do you prevent getting towed? The best way is to follow the rules. When in doubt, choose a different spot or park in a paid lot. Remember, any paid lot is cheaper than paying for a tow and way less of a hassle.
If you’re worried about being towed due to the nonpayment of a loan, you should speak with your lender right away. Ask about setting up a payment plan to catch up on payments. Options are often available, such as selling the car to pay off the loan or trading in the car for one that’s less expensive. Just don’t wait. The longer you wait, the fewer options you’ll have.
If your car is damaged or disabled, you may need to have your car towed. Some car insurance companies will cover the cost of towing if you purchase emergency roadside services through your insurer. If your insurance provider doesn’t offer you roadside assistance, you can buy stand-alone coverage from a company like AAA or switch to a provider that offers it. We can help.
Using our car insurance quote comparison tool, you can access and compare real quotes from top providers in your area. Shop anonymously and only share your information if you want to purchase the policy. Save your profile to shop even faster in the future, and turn on notifications if you want an email any time there’s a rate drop. Saving has never been easier!
A bandit tow occurs when tow truck drivers monitor police radios so they can be the first one to respond to a car accident. They take the damaged vehicle to a storage facility or body shop, where they can then charge the driver excessive (sometimes illegal) fees for towing, storage, and/or repair services. The car owners must pay these fees to get the car released.
In most states, tow truck drivers need a commercial driver’s license (CDL) in order to be permitted to drive a tow truck. The exact rules depend on the state in which the tow truck operates.
So long as your car doesn’t exceed the towing capacity of the tow truck, there’s no real cap on how far your car can be towed. Remember that when a car is towed for removal purposes, it behooves the towing service to go as short a distance as possible from the tow site. But some drivers have been stuck going miles to reclaim their vehicles.
The laws for towing and the consequences of breaking those laws are different depending on the state you’re in. In most states, tow truck drivers receive a fine and a civil misdemeanor. In some states, like California, illegal towing can be punished with jail time. In some states, charging excessive or illegal fees can also result in charges, fines, and service or jail time.
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J.J. Starr is a health and finance writer with a background in banking, lending, and financial advising. She holds a Series 6, FINRA, and life insurance licensure and a master's degree from New York University. Through her writing, she strives to use her decade of experience to help consumers make sound financial choices. Connect with J.J. on LinkedIn.Learn More