Ontario cracks down on tow-truck operators’ price gouging


The Globe and Mail

Published Tuesday, Apr. 15 2014



Ontario is cracking down on renegade tow-truck operators with a set of new rules meant to force them to stop gouging drivers and pay fair prices.

The government is also hoping the proposed law will curb insurance fraud and lead to lower premiums for drivers.

“It will give stronger protection for people who have their vehicle towed or stored,” Consumer Services Minister Tracy MacCharles said at Queen’s Park Tuesday before tabling the bill. “It’s going to help with road safety and it’s going to help us drive down insurance costs by driving down fraud.”

The legislation will compel tow-truck operators to tell drivers exactly how much they will charge them before they tow their vehicle, post their prices and provide itemized invoices. Such measures are designed to allow drivers to comparison shop and discourage towing operations from charging exorbitant rates.

The proposed rules would also require tow-truck operators to make information such as their names and contacts publicly available, and accept credit-card payments.

Tow-truck drivers would also have to register with the government, allowing the province to keep better tabs on them.

The proposals are partly a response to complaints from drivers who have been charged massive, unexplained fees by towing companies, partly to accusations that some tow-truck drivers have been involved in insurance fraud rings and partly a result of a high rate of collisions among towing companies, Ms. MacCharles said.

They are part of a larger push by the government to crack down on fraud in a bid to lower premiums.

The province’s Liberal government, as part of a deal with the New Democrats to pass last year’s budget, is slashing average auto-insurance premiums by 15 per cent by August of 2015. To compensate for lost industry profit, the government is trying to make the system less costly for insurance companies by speeding up arbitration processes for claimants and battling fraud. These measures are contained in a separate bill, introduced earlier this year.

Finance Minister Charles Sousa said Tuesday that average insurance premiums have so far fallen by 6 per cent since last summer, and that the government is on pace to meet its targeted 15 per cent cut.

But he said the NDP isn’t doing enough to help speed through his reforms to arbitration and clamp down on fraud.

“If the NDP really wanted to reduce rates they’d be helping us pass this bill as soon as possible – but that’s not what they’re doing,” he said. “They want to keep these rates high so they can have that political advantage. That’s not necessary and it’s certainly not fair.”

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