January 31, 2022 – Washington, D.C. –– A coalition of trucking and insurance industry stakeholders are working together to address unscrupulous towing companies engaged in nonconsensual towing, a growing problem that continues to disrupt the supply chain and a practice that the coalition believes effectively amounts to insurance fraud.
When a big truck is involved in an accident, the Maryland State Police (MSP) generally dispatches a towing company to handle the tow or recovery of the truck, trailer, and/or cargo. These are referred to as “nonconsensual tows.” The problem is not with MSP itself, but rather the lack of any consumer protections from towing companies that continue to exploit what is already a bad situation. The coalition is supporting a comprehensive legislative solution (HB 487) led by Delegates Linda Foley and David Fraser-Hidalgo.
“Motor carriers operating in Maryland have had enough of high-dollar invoices that should realistically only cost a fraction of that amount. Not only does this cause irreparable harm to the carrier itself, it contributes to the disruption of our global supply chain,” said Louis Campion, president and CEO of the Maryland Motor Truck Association.
The coalition is hoping to address this issue in a number of ways, which includes the creation of new rules and a robust complaint process.
“One of the problems in Maryland is that there are no rules that prevent towing companies from charging whatever they want. There is also no viable complaint process for truck drivers caught up in this mess,” said Mike Matousek, director of state legislative affairs at the Owner-Operator Independent Drivers Association.
The coalition is also concerned about the impact on the insurance industry and wants to remind people that insurance fraud is a real problem in this country.
“When towing companies submit an invoice that includes charges for equipment or manpower that was never on scene, that is insurance fraud. This is not a victimless crime,” said Matthew Smith, executive director of the Coalition Against Insurance Fraud.
The coalition has tried to address this issue in other ways, but at this point a meaningful legislative approach is the only practical solution.
“Insurance is subject to a state-based regulatory system, which benefits both consumers and insurers. It is not unreasonable to think the towing industry should have to play by some rules and we think it can be done in a way that would minimize the impact on towing companies that do things the right way,” said Robert Passmore, vice president of auto & claims policy at the American Property Casualty Insurance Association.
The coalition also wants to remind everyone that this is not an issue unique to Maryland, but rather one that spans the country.
“There are a few states that have already addressed this issue in some way and there are a few more that are in the process of doing something. A few years ago, Congress gave states clear authority to fix this as they see fit and we intend to work with states to use that authority,” said John Lynch, senior vice president of federation relations & industry affairs at the American Trucking Associations.