Cheney: Pirates on the highway are costing Ontario drivers billions


The Globe and Mail

Last updated Friday, Nov. 29 2013                

As rush hour approaches on Canada’s busiest highway, the forces of the towing industry assemble. Customized Vulcan Intruders and V-8-powered Ratlers rumble into position near the on-ramps, taking up their stations like carrion birds circling above the Serengeti during migration season.

These tow trucks are specialized machines, bristling with radio antennas and hydraulic tail stingers that can whisk a car away in minutes. The drivers tune in to the police frequencies and wait, hoping for a payday that could range anywhere from $150 to five figures, depending on their luck and connections.

For drivers who crash or break down on Highway 401 in Ontario, it can go one of two ways. If lucky, their vehicle will be towed away by a reputable operator who will charge a reasonable amount for the service. If not, they may find themselves plunged into a netherworld of extortionate fees, kickback-laden referrals, and barbed-wire impound lots where their car is held hostage until the bill is paid.

Running through the heart of the country’s biggest city, Highway 401 is the Grand Banks of towing – and sometimes, its Somali coast. According to a provincial task force that investigated insurance fraud, unscrupulous tow truck operators are at the front line of a black-market enterprise that costs Ontario drivers $2 billion each year.

“I think the towing industry is worse than those guys in Somalia,” says Doug Nelson, executive director of the Provincial Towing Association of Ontario (PTAO). “At least the pirates let you know what they’re up to. They stick a gun in your face and take your ship and your money. When it comes to towing, you don’t even know you’re getting robbed until you see the bill.”

The provincial task force calculated that fraud adds an estimated $700 to the insurance bill of every driver in the Greater Toronto Area.

“There are responsible companies, and there are flat-out pirates,” says Rick Dubin, vice president, Investigative Services, at the Insurance Bureau of Canada. “It’s luck of the draw.”

Although there are plenty of reputable tow operators, there are also pirates lured to the business by lax regulation and the potential for windfall profits. Drivers can earn commissions of up to 20 per cent on everything from bodywork to legal services to medical care. Some drivers have told the PTAO about doctors offering them a flat fee of $1,000 for bringing in a new patient after an accident.

“There are guys who make $10,000 a call,” says Nelson. “They work the system.”

My first glimpse into the darker recesses of the towing industry came while researching a story on insurance fraud. Among the people I met was a tattooed, 385-pound tow truck driver who showed me the workings of an ugly roadside game that included padded bills, under-the-table payments from paralegals, rehab clinics and body shops.

One trick: Drivers sometimes cross city borders to evade the rules that exist in certain jurisdictions.

“You might get towed out of Toronto by a truck from Richmond Hill, and he takes you to Markham,” says David Zimmer, Ontario Minister of Aboriginal Affairs, who has worked on province-wide legislation that would regulate the towing industry. “So whose rules apply?”

In many cases, the answer is: no one’s. There are 444 municipalities in Ontario, and only a few have rules covering the towing industry. “Anyone can buy a tow truck and start hauling away cars,” says Zimmer. “It’s not a good situation.”

Zimmer introduced two private members bills that would have created standardized province-wide regulations for tow operators. One bill fell by the wayside when the legislature was prorogued, and the other was derailed by an election.

Depending on where they are, a motorist involved in a crash or breakdown may encounter entirely different circumstances. In downtown Toronto, police have contracts with five established towing companies that follow posted rates, with the average cost of a tow and impound about $165. But in a municipality with no rules, all bets are off — and on the 401, which runs through multiple regions, you are in a legislative no-mans-land.

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