Insurance bureau calls on Alberta to regulate tow truck sector

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Alberta’s auto insurers say they’ve seen a rapid escalation in the costs associated with tow truck services following motor vehicle collisions, and what they claim are exorbitant bills from some operators.

The Insurance Bureau of Canada (IBC) said the excessively high invoices that some towing companies in Alberta are billing insurance companies are a fairly recent phenomenon that reinforces the bureau’s argument that the province should implement stronger rules for the sector.

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“What we’ve seen is an explosion in the size and cost of tow truck operations — everything from the immediate help roadside, very large fees for things like traffic control, (to) significant costs for towing and storage,” said Aaron Sutherland, a vice-president with the IBC.

He likened Alberta’s towing sector to the “wild West,” claiming that private operators are able to charge insurance providers exorbitant amounts.

Several redacted invoices obtained by Postmedia showed towing companies charging thousands of dollars for a single tow, after factoring in fees for traffic control, cleanup, fuel surcharges, winching, vehicle impound, gate access and other services.

One tow company’s invoice from June 24 added up to more than $12,000, mostly due to the vehicle being kept in an impound lot for 105 days at a rate of $90 a day.

“We’ve got a lot of tow truck operators that are working in the best interest of their customers, that are bringing forward appropriate bills for their services,” Sutherland said. “But we’re starting to see, all too often, the opposite of that. We’re seeing some operators charging really excessive amounts that, from an insurance perspective, is causing a lot of concern.”

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While vehicle owners do not need to pay for towing services after a collision if they’re properly insured, Sutherland argued if insurance companies continue to be billed excessively, the vehicle’s owner can ultimately end up paying higher premiums.

To address the issue, Alberta should follow in the footsteps of other provinces, Sutherland said. He cited B.C., Ontario and Manitoba, where standardized fee tables dictate how much a towing operator can charge for certain services.

Manitoba’s fee table, which is adjusted annually for inflation, only allows operators to charge $17.41 daily to store an impounded vehicle. In Alberta, in contrast, daily impound storage rates can be more than $70.

“Why are (the UCP) not putting more oversight into how much tow truck operators can charge for some of their services, as they do in many other provinces and jurisdictions?” Sutherland said.

The IBC would also like Alberta to craft a code of conduct that towing operators would be obliged to abide by, according to Sutherland.

In a Friday statement to Postmedia, the Ministry of Public Safety and Emergency Services said it is concerned with tow truck scams, but that there’s currently no legislation that governs towing operators.

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The ministry suggests those who suspect a tow truck scam should contact their local police department to report their concerns. They can also file a complaint with the Consumer Investigations Unit at Service Alberta Red Tape Reduction by calling 1-877-427-4088, if they suspect a business has violated consumer protection laws.

“We are committed to addressing these allegations and are working closely with provincial authorities to enhance public safety measures,” the statement read, adding the province is also engaging with the IBC office and law enforcement to combat potential towing scams.

‘Unfortunately, there are some dishonest business owners out there’

The president of the Towing and Recovery Association of Alberta, which represents the industry, acknowledges that some companies are operating dishonestly by tacking additional charges onto their bills.

Don Getschell, who also owns Oil Country Towing, which has operated in Edmonton since 2011, said he’s not opposed to more regulation in the industry.

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But he also puts some of the blame on insurers, claiming they often won’t scrutinize or question the bills they receive from shady operators.

“We feel people should be billed fairly and truthfully but, unfortunately, there are some dishonest business owners out there,” Getschell said.

He added that since Ontario implemented stricter rules on its towing sector, there has been a flood of tow truck companies that want to operate under looser regulations, in provinces such as Saskatchewan and Alberta.

Edmonton, in particular, saw an influx of 20 companies in the past year, Getschell claimed.

“Regulation, yes, it would solve the problem,” he said. “It’s not something we want . . . but the only people who regulation would hurt are the dishonest owners. All the well-established companies that have been around for many years, it’s not going to affect them one bit.”

If the Alberta government does pursue more regulation in the towing sector, Getschell said he’d like representatives from the industry to be at the table for those talks.

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