04/15/2014 11:40 EDT | Updated 06/15/2014 05:59 EDT

Ontario to regulate tow trucks, require posted rates, customer permission to tow

TORONTO - Provincial regulation of Ontario's tow truck and vehicle storage industry will better protect consumers from being ripped off by unscrupulous operators and help reduce insurance fraud, Consumer Services Minister Tracy MacCharles said Tuesday.

"Some people have reported being faced with demands for hundreds of dollars in cash at the scene of an accident before the service was even provided," said MacCharles.

"We've had so many reports about inflated prices by some, not all, but some tow truck drivers, and that is driving up the cost of collision repairs and storage costs, so that's what we're trying to get at on the fraud side."

Other drivers involved in accidents find their vehicles are towed far away to a storage facility that then hits them with an "unexpectedly large" bill before they can get their car back, added MacCharles.

"We are aware of dubious tactics used by some operators," she said.

The Liberals promised legislation that would force tow truck operators to get permission from a driver before charging for towing and storage services, post their prices and provide an itemized invoice detailing all charges and the total cost. It would also force operators to publicly post the driver's name and contact information and mandate that they accept credit cards, not just cash.

"What we're going to do specifically is get the tow trucks registered first ... with the Ministry of Transportation's the Commercial Vehicle Operator’s Registration system, so that's our first step," said MacCharles.

There will be fines — the levels have not yet been set — for operators that do not abide by the new regulations, added MacCharles.

"There'll be stronger enforcement mechanisms under the Consumer Protection Act," she said. "Drivers should have the confidence that the tow truck operator helping them is reputable and will treat them fairly."

Ontario tow truck drivers have a collision rate of about 20 per cent, compared with one per cent for other commercial vehicles and three per cent for private passenger vehicles, "caused in part by aggressive driving in an attempt to get to collision scenes first," added MacCharles.

"The safety issue is clearly a problem with the tow trucks," she said.

Regulating tow trucks is one way to cut down on those accidents and help the Liberals achieve their promised goal of reducing auto insurance premiums an average of 15 per cent over two years, said MacCharles.

"It's going to help us with road safety, and it'll help us drive down insurance costs by dealing with the fraud issues," she said.

About 17 Ontario municipalities already regulate and license tow trucks, so MacCharles said the province would work with those communities to see if they want to come under the provincial umbrella or maintain their own oversight of the sector.

"Some are saying just take a provincial approach and some of them may want to retain what they have in place right now, so we have to work through that in terms of the licensing and certification that’s going to be coming," she said.

There are about 1,200 tow truck and storage operators and 3,000 tow truck drivers in Ontario.

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