Consumers are being hailed as the “big winners” in the latest initiative conducted on behalf of Bill 15, Ontario’s Fighting Fraud and Reducing Insurance Rates Act.
In a new policy set to take effect early next year, towing companies will be required to show drivers a list of their rates in writing and provide them with a copy of the documents that authorized the tow before they take charge of the vehicle. They will also need to formulate a detailed invoice that lists all the services conducted, prior to any payment transaction.
The regulation was enacted in response to tow truck scams, which can cost the industry $1,500 to $3,000 for a “simple tow,” according to the
Toronto Star.
“In many cases currently, you have individuals who receive the service and don’t know how much it’s going to cost because the (towing operators) say ‘Don’t worry about it. Your insurance company will pay for it,’” said Pete Karageorgos, director of consumer and industry relations with the
Insurance Bureau of Canada.
Karageorgos says that corrupt tow truck practices can lead to higher auto insurance premiums for consumers throughout the province.
“In many cases currently, you have individuals who receive the service and don’t know how much it’s going to cost because the (towing operators) say ‘Don’t worry about it. Your insurance company will pay for it,’” he said.
The bill also targets “kickbacks,” and forbids tow truck operations from recommending repair shops or junk yards unless the consumer requests one. If a suggestion is made, the tow truck company needs to provide a written statement that explains the benefits of that business.
This will help combat the trend involving consumers who sign a “blank check” for repairs at the scene of a collision.
“When the insurance company gets around to moving the vehicle to the customer’s preferred shop, they’re told, ‘Oh, we’ve already started repairs. The owner gave us authorization.’ The driver signs without really knowing what he’s signing because he’s just been in an accident and isn’t thinking straight.”
While Karageorgos acknowledges that this bill is “progress,” he hopes that brokers and the industry will complete their mandate, saying “the other piece is consumer education and outreach.”
