Shifting Gears: What Recent Predatory Towing Laws Mean for Towing Companies
Introduction
The towing and recovery industry is changing as state legislatures across the country pass new laws targeting “predatory towing.” For towing companies across the country, keeping an eye on these statutory and regulatory changes could not be more important, not only to ensure compliance but also to look ahead and see what may be coming soon to your state. Here’s what towing companies need to know about the latest legislative trends and how to navigate the new landscape.
The Rise of Regulatory Bodies and Permitting Requirements
Several states have established regulatory bodies or commissions specifically to oversee the towing industry. In one recent example, North Carolina’s proposed Towing and Recovery Commission will require all towing businesses to obtain a permit and undergo annual reviews. This move towards stricter oversight means towing companies must now adhere to rigorous standards and face regular compliance checks.
What This Means for Towing Companies:
Preparation and Documentation: Towers will need to ensure they have all the necessary documentation in place and comply with new regulatory standards. This includes, among other things, accurate record-keeping and transparent business practices.
Regulatory Awareness: Staying informed about the specific requirements in each state of operation is crucial, as regulations can vary widely.
A link to the North Carolina bill may be found here.
Fee Transparency and Caps: Navigating the New Norms
One of the most significant changes is the requirement for towing companies to maintain and publicly display a rate sheet, detailing all charges. For example, Florida’s HB 179 mandates that rate sheets be provided to vehicle owners, lienholders, and insurers upon request. Additionally, many states have capped fees for services like boot removal and storage, setting clear limits on what can be charged.
What This Means for Towing Companies:
Transparent Pricing: Companies must ensure their pricing is clear and consistent with the publicly displayed rate sheets. This not only builds trust with customers but also prevents legal disputes.
Adapting Business Models: With caps on service fees, towing companies may need to reevaluate their pricing strategies and consider new revenue models that comply with state law.
Enhanced Consumer Protections: A Shift in Operational Focus
New laws increasingly prioritize consumer rights, with regulations requiring clear documentation of towing permissions and the prohibition of certain practices. For instance, Virginia’s HB 959 requires towing companies to obtain written consent from property owners before towing a vehicle. Colorado’s laws further prohibit towing companies from patrolling lots without proper contracts.
What This Means for Towing Companies:
Operational Adjustments: Companies may need to adjust their operational protocols, ensuring all tows are fully documented and authorized. This might involve new training for staff and the implementation of stricter internal controls.
Focus on Customer Relations: With a greater emphasis on consumer rights, maintaining positive relationships with customers and property owners becomes even more critical. Providing excellent customer service can help mitigate negative perceptions and complaints.
Increased Penalties and Enforcement: The Cost of Non-Compliance
States are not just setting new rules; they are also increasing the penalties for non-compliance. For example, Virginia’s legislation allows the Attorney General to impose hefty fines for illegal towing activities, directly compensating victims. This new enforcement rigor means towing companies face significant financial and reputational risks if they fail to comply with the law.
What This Means for Towing Companies:
Risk Management: Companies must develop robust compliance strategies to avoid the penalties associated with violations. This includes regular audits and updates to ensure adherence to the latest regulations. It is not just the cost of the penalties that drive up expenses - even the defense of a claim can be costly.
Legal Preparedness: Having an attorney in your state who is familiar with the evolving laws can be invaluable in navigating disputes and ensuring that all operations are legally compliant.
The Importance of Consumer Complaint Mechanisms
Many states are setting up systems for consumers to lodge complaints against towing companies, which regulatory bodies then investigate. This increases accountability and provides consumers with a direct avenue for redress. These administrative investigations, which vary in procedure from state to state, are often time-sensitive matters that are handed outside of the judicial system.
What This Means for Towing Companies:
Proactive Issue Resolution: Companies should establish their own internal complaint handling procedures, aiming to resolve issues before they escalate to regulatory bodies.
Keeping and Maintaining Accurate Records: Given that most administrative proceedings focus on compliance, keeping accurate records for the required period of time specific to each state becomes even more important.
Building a Positive Reputation: Actively addressing consumer complaints and demonstrating a commitment to fair practices can enhance a company’s reputation and reduce regulatory scrutiny.
Embracing the New Era of Towing Regulations
For towing companies and vehicle storage facilities, these new laws present both challenges and opportunities. While the increased regulation be intimidating, it also offers a chance to standardize practices, improve transparency, and work to resolve disputes internally instead of waiting for a complaint to be filed. By proactively adapting to these changes and prioritizing compliance, towing companies can not only avoid penalties but also position themselves for a competitive advantage in a new regulatory environment.
Next Steps for Towing Companies:
Stay Informed: Keep up-to-date with the latest legislative changes and ensure your business practices are aligned with state regulations.
Invest in Training: Regularly train your staff on compliance requirements and customer service best practices.
Review and Update Policies: Review your company’s policies and procedures to ensure they meet the new legal standards.