Florida lawmakers zone in on “predatory” towing practices

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Florida lawmakers zone in on “predatory” towing practices | Insurance Business America















Bad actors in state’s towing industry have “exploited” loopholes

Florida lawmakers zone in on "predatory" towing practices


Motor & Fleet

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Predatory towers in Florida have created challenges for drivers and insurers, with organizations like the National Insurance Crime Bureau (NICB) looking to collaborate with state lawmakers to enact necessary changes, evident in the recent sponsoring of HB 179.

This House Bill, which has gained support from State Representative Melony Bell, is looking to address “loopholes being exploited by predatory towers” that have allowed bad faith actors to continue taking advantage of civilians and insurers alike, Eric De Campos, director of strategy, policy and government affairs at the NICB, told Insurance Business.

The problem, though not a new one, has become exacerbated in recent years.

“Predatory towers have been around since tow trucks were invented, but the issue has gotten worse over the past decade,” De Campos said.

Recognizing Florida’s towing legal loopholes

In cases, individuals have reported issue when going to pay their Bills, with payment options limited to cash or excluding credit cards or mobile device transactions.

Towing companies and professionals have also been able to price gouge as direct result of laws and legal loopholes to defraud both customers and insurers, according to De Campos.

Florida statutes do not contain laws establishing a state-wide rate schedule for nonconsensual tows, for example, when an individual gets into an accident on the highway.

“This responsibility is given to counties and municipalities,” De Campos said. “However, not all local jurisdictions have established maximum rate schedules, thereby allowing predatory towers to charge exorbitant fees, even for towing a car two miles down the road.”

Another way that towers have been able charge high prices is due to the vague wording around what constitutes a hazmat cleanup.

“The typical idea of a hazmat cleanup involves removing massive chemical spills that pose a serious risk to entire communities,” De Campos said. “However, the lack of clear laws defining hazmat cleanups involving nonconsensual tows allows these bad actors to charge thousands of dollars to apply absorbents, such a kitty litter, onto a little bit of spilled gasoline or some other engine fluid and sweep it up with a broom.”

Bad faith actors have resorted to using heavy equipment to clean up small ounces of spillage, which drives up the cost of services that carriers have to pay.

“These practices lead to inflated tow bills, where we have seen five and six figure tows that insurers are required to pay,” De Campos said.

“If the insurer tries contest those fees or attempts to negotiate with the tower, the tower can hold the vehicle hostage until they receive payment while continuing to rack up storage fees.”

Towers have also been accused of placing signs in hard-to-spot locations, or failing to communicate consequences of parking in certain areas.

Bill HB 179 looks to cut down “predatory” practices from bad actor towers

Under HB 179, the methods of payment towers must accept would include credit cards and mobile device payments.

This would allow owners maximum flexibility to pay their bills and ensure the release of their vehicles, particularly when some “may not have access to cash”, according to De Campos.

The Bill would also establish reasonable pricing and cut down the seven-day window that towers currently have to notify owners their vehicle has been towed.

“These measures will not only help prevent insurance fraud, but also provide critical consumer protections for Floridians,” Decampos said.

Staged vehicular accidents a further concern in Florida

In addition to towing practices, the rising rate of staged vehicular accidents is also a growing concern for Florida’s motorists.

“Criminal organizations are intentionally staging vehicle accidents, often time by recruiting or coercing vulnerable individuals to take part in these schemes, in order to file inflated medical claims to insurance companies,” De Campos said.

This phenomenon is also gaining precedence in South Carolina, where Insurance Business recently reported that is has become the top insurance fraud issue in the state.

“The impact on residents includes both a financial cost and a safety risk. Residents are not only faced with the costs of the damage done to their vehicles, but also risk serious injury and possible death as a result of vehicle accidents deliberately caused by fraudsters,” De Campos said.

The NICB believes that raising the minimum criminal penalties for insurance fraud may be a way to deter bad faith actors from offending.

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