Tow truck tricks can hit you after an accident

As accidents ramp up on slippery winter roads, Canadians are at risk of being ripped off by some tow truck drivers and autobody shops, a CBC Marketplace investigation reveals.

Many people are vulnerable after an accident and unaware that some tow truck drivers may be getting kickbacks for referrals to autobody shops.

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"If the consumer doesn't think the tow truck driver is getting paid something for referring them somewhere, that's very naive," says Joey Gagne, president of the Provincial Towing Association of Ontario.

"They're not doing it out of the goodness of their heart."

While Ontario has promised new rules to help regulate tow trucks, depending on where you are in Canada, a patchwork of provincial and municipal regulation doesn't always protect consumers who have been in a collision.

Problems with tow trucks occur most often in Ontario, "but it can and does happen in the other provinces," says Pete Karageorgos, director of consumer and industry relations for the Insurance Bureau of Canada.

• The Marketplace investigation, including what you need to do if you get in an accident, airs Dec. 4 at 8 p.m. (8:30 p.m. in Newfoundland and Labrador) on CBC-TV and online

'In a state of stress'

When a car rear-ended Sahil Mulla's dark grey Scion FR-S on a highway in Mississauga, Ont., he says he didn't pay attention when the tow truck driver gave him something to sign.

"He knew I was in an accident and he knew I was in a state of stress, so he was nice," says Mulla. "He nicely tricked me into signing things."

Mulla says that the tow truck driver recommended Lyons Auto Body and said that the shop wouldn't touch his car until he ironed out details with his insurance company.

What he didn't realize was that the form he signed was a work order that gave Lyons permission to fix his car. And when he changed his mind, he says there was little he could do to get his car back.

Two days after the accident, Mulla says the shop told him it would release his car only if he paid $8,000 in storage fees.

It took three months for Mulla, his insurance company and Lyons to negotiate to get the car fixed and returned.

"It's not right. It's not how you do business. It's not how you take care of your customers," Mulla says.

Lyons declined to speak with Marketplace about Mulla's case and dispute his version of events.

Cars held hostage

"There's always horror stories and there's a lot of them," says Gagne, noting that Mississauga and Vaughan, a suburban community north of Toronto, are hotbeds for accident "chasing," where trucks race to an accident scene so they can be the first to secure a car.

"Many body shops, they pay money to bring them accidents," one tow truck driver told Marketplace's Erica Johnson.

"Some people, they pay $200 to $500."

Marketplace heard from several people who say autobody shops held their cars hostage until they paid for services they did not approve, including storage fees, rental cars, administrative fees and repairs that added up to thousands of dollars.

While these costs are often covered by insurance, consumers can end up paying higher premiums.

In other cases, some people reported that they felt pressure to accept a tow despite only minimal damage to their car.

New rules coming for Ontario

In November 2014, the Ontario government passed a bill to regulate the towing industry. The new rules, expected early next year, will require tow truck drivers and autobody shops to disclose their business relationships, give an upfront estimate of the repair costs, provide itemized invoices and accept credit card payments.

Tow trucks will also be required to give a written estimate to the consumer up front and the final cost can't be more than10 per cent above that amount.

The new rules are an attempt to level the playing field for consumers, who are currently protected by a patchwork of municipal bylaws that vary from place to place.

But Gagne, from the Provincial Towing Association of Ontario, doubts that the new rules will do much to change the problems on the road.

"They're going to have a hard time with enforcement," Gagne says. "I'm sure there's lots of people who won't disclose information in the towing business."

In Ontario, 16 municipalities currently license tow trucks. Some, including Mississauga and Vaughan, already require tow trucks to disclose business relationships.

But Gagne points out that these areas are some of the most problematic for kickbacks.

British Columbia, Manitoba and Saskatchewan have provincially run insurance companies that oversee towing services, regulate pricing and deter fraud.

"Tow truck fraud does happen sometimes in Alberta and the Maritimes, and may occur but to an even lesser extent in B.C., Manitoba and Saskatchewan, which have government-run centrally managed insurance models with a greater degree of oversight." says Karageorgos.

Gagne says asking questions to tow truck drivers can help you avoid headaches down the road.

"Ask for a price for the service, tell police where you want to take your car, ask for an itemized invoice and, when in doubt, ask the officer for advice."

• Based on a Marketplace investigation by Andreas Wesley, Tyana Grundig and Erica Johnson.