Report:

Getting Off the Hook of a Predatory Tow - Part II

Only one-third of states ban kickbacks to property owners, law enforcement
Released by: WashPIRG Foundation

Driving is a staple of American living. In 2020, there were more than 275 million registered vehicles in the United States. An issue that many drivers face or may be worried about is having their vehicle towed. If you ask around in your small circle, someone inevitably has a towing story.

Prior to the pandemic, millions of Americans had their vehicles towed involuntarily every year. Reasons range from unpaid tickets to expired registration to improper parking on private property. There are many ways to stop predatory towing or abusive practices that sometimes occur with legitimate tows, and laws vary widely nationwide.

In a May 2021 report by WashPIRG Foundation, we compared the statuses of 14 common sense towing protections in each state. In some cases, few protections are guaranteed by law. For instance, 37 states mandate that towing companies notify the owner/driver when their car gets towed, making it the most popular protection nationwide. Some states mandate notifying law enforcement within an hour. In some states, the notification is allowed to be mailed to the owner – within seven days. Only 14 states require towing companies to clearly display their rates. And only four states require pictures of the vehicle before it’s towed.

Since the last report, the towing law landscape has begun to change, with lawmakers around the country either pondering or passing new towing protections for consumers. Major cities such as Detroit and Memphis recently approved new laws to protect drivers from predatory towing or abusive practices. While no states have yet approved new towing laws in the last year, legislators in Colorado now want to take on predatory towing in a big way. Other states are interested in new protections as well, according to the National Conference of State Legislatures. Meanwhile, more municipalities are looking at adopting more protections against predatory towing. This report looks at recent changes and what else may be coming. We also look at an emerging issue: kickbacks sometimes paid when vehicles are towed.

Laws banning kickback payments for private property tows is a common sense protection, like many of the others. These kickback payments occur when a property owner or law enforcement officer gets some type payment or other consideration from a towing company for getting a car towed from the property. Some laws also ban towing companies getting extra payments for a tow, but we didn’t consider that as part of kickback laws. Only one-third of states ban kickbacks in some way for private property towing. Some laws are more comprehensive than others.

Meanwhile, towing is on the rise. The industry is expected to take in $11.3 billion in 2022, an increase of 10% from 2020, according to IBISWorld, which conducts research on thousands of industries worldwide. That does include both consensual tows, after a breakdown or wreck, and non-consensual tows, for allegedly leaving your vehicle someplace you shouldn’t. IBISWorld did note that wrecks are decreasing as newer cars typically come with more safety features, such automatic braking systems and lane-change alerts, so the industry growth is expected to come from non-consensual tows.

Kickback laws

Kickback laws are designed to reduce an incentive to tow, beyond removing a vehicle for a legitimate reason. These laws reduce the frequency of situations such as what happened in Lubbock, Texas. In that case, businesses received $20 for every vehicle towed from their properties, leading the businesses to make “more than $500 a week” from tows alone, according to a local news investigation. That included one tow that they discovered was actually illegal because warning signs weren’t properly displayed. That exemplifies a problem with kickbacks: incentivizing illegal tows.

In a twist on the kickback issue, Detroit is investigating kickbacks involving its police department; two officers were charged last fall with bribery for allegedly steering business to at least one towing company.

Some states prohibit towing companies from paying kickbacks to anyone. There should already be enough incentives for business owners to have unauthorized vehicles towed from their property if they care about only having parking for customers and/or employees. If a state does not require a photo before a tow – again only four do – while not banning kickback payments, that opens the door to incentivizing tows even when they are illegal. Business owners could see it as easy money if they believe they won't be caught. Kickbacks open a door to potential malpractice that does not need to be opened.

The most basic and most common version of this protection stops kickbacks from going to the owner, lessee or agent of property from which the vehicle may be towed. A more comprehensive version also would prohibit a property owner from having a stake in the towing company, as has been the law in Texas since 1995. This reduces the workarounds people can have to get money from tows on the person’s own private property.

Here is a list of the 50 states and what private property kickback protections they have:

Alabama: State troopers are not allowed to receive kickbacks, have financial interest in a towing company or recommend a towing company while on duty. No other protections found. 
Alaska: No protection found.
Arizona: No protection found.
Arkansas: No kickback to the owner or agent requesting the tow.
California: No kickback to the property owner who calls for the vehicle removal.
Colorado: No protection found.
Connecticut: No kickback to the owner, lessee or agent of property from which the vehicle was towed.
Delaware: No kickback to the owner, agent or employee of property from which the vehicle was towed.
Florida: The tower cannot pay money to tow a car from private property.
Georgia: No kickback to the owner or agent of property from which the vehicle was towed.
Hawaii: No protection found.
Idaho: No protection found.
Illinois: No rebate, payment of money, or any other valuable consideration shall be paid for the privilege of removing or towing vehicles by the towing operator, its agents or employees to the owners or operator of the premises from which a vehicle is removed or towed.
Indiana: No protection found.
Iowa: No protection found.
Kansas: No protection found.
Kentucky: No protection found.
Louisiana: No protection found.
Maine: No protection found.
Maryland: No kickback to the owner, agent or employee of property from which the vehicle was towed.
Massachusetts: No protection found.
Michigan: No protection found.
Minnesota: No protection found.
Mississippi: No protection found.
Missouri: No protection found.
Montana: No protection found.
Nebraska: No kickback to the owner or tenant of property from which the vehicle was towed.
Nevada: No protection found.
New Hampshire: No protection found.
New Jersey: No kickback to anyone providing information about towing a vehicle on private property.
New Mexico: No kickback to the owner of the property the vehicle was towed from.
New York: No kickback to the owner or operator of the property the vehicle was towed from.
North Carolina: No protection found.
North Dakota: No protection found.
Ohio: No protection found.
Oklahoma: No protection found.
Oregon: No kickbacks or considerations can be received by the owner or employee of the parking facility that a vehicle is towed from. A vehicle also can’t be towed from a parking facility if its property owner or the owner’s agent is employed by a towing company.
Pennsylvania: No protection found.
Rhode Island: No protection found.
South Carolina: No protection found.
South Dakota: No protection found.
Tennessee: No kickback to the owner or manager of the private property.
Texas: No kickback to the property owner either directly or through having some stake in the towing/booting company. The owner of the towing/booting company cannot have a stake in the private property either.
Utah: No protection found.
Vermont: No protection found.
Virginia: No protection found.
Washington: No kickback to the person in charge of the private property.
Wisconsin: No protection found.
West Virginia: No protection found.
Wyoming: No protection found.

Conclusions

1. Towing kickback laws aren’t common, with only one-third of states addressing kickbacks for private property tows in any way. That, combined with the lack of photographic evidence required to document improper parking before a tow, exposes drivers to potential abuse. Along with all of the common sense protections in the last report, states should prohibit kickbacks. Bad things can happen when property owners or law enforcement officers get paid to get vehicles removed and raises questions about whether the vehicles were actually improperly parked.

2. While there is a push for new protections in states across the country, municipalities are primarily leading the way. States need to follow their lead. None of the towing protections analyzed in the original report or this follow-up were found in 40 or more states. Only two protections – private property signs and driver notification – were found in at least 30 states. That leaves a lot to be desired.

3. Thankfully, that desire for improvement is there among many lawmakers. The difficulty difficulty is taking that desire and turning into change. No matter the state improvements can be made. Improper parking can carry consequences, but they should be fair and transparent. It’s not unusual for a towing and storage bill to total several hundred dollars, especially if the storage fees spiraled for days because the driver couldn’t locate their vehicle or because the company demanded cash instead of a credit or debit card.

Abusive towing can happen to anyone. In some communities, vehicles can be removed if a towing operator thinks the tires aren’t properly inflated. Cities and states need to evaluate complaints about bad actors and take action and, in some cases, look for ways to strengthen consumer protections. If that desire for improvement is turned into change, we hope there will be a lot to update in the next report.

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