• ITVI.USA
    15,496.720
    85.590
    0.6%
  • OTLT.USA
    2.743
    0.003
    0.1%
  • OTRI.USA
    21.110
    0.000
    0%
  • OTVI.USA
    15,466.390
    90.520
    0.6%
  • TSTOPVRPM.ATLPHL
    3.300
    0.000
    0%
  • TSTOPVRPM.CHIATL
    3.140
    0.190
    6.4%
  • TSTOPVRPM.DALLAX
    1.590
    0.150
    10.4%
  • TSTOPVRPM.LAXDAL
    3.330
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.170
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    4.080
    0.130
    3.3%
  • WAIT.USA
    125.000
    -1.000
    -0.8%
  • ITVI.USA
    15,496.720
    85.590
    0.6%
  • OTLT.USA
    2.743
    0.003
    0.1%
  • OTRI.USA
    21.110
    0.000
    0%
  • OTVI.USA
    15,466.390
    90.520
    0.6%
  • TSTOPVRPM.ATLPHL
    3.300
    0.000
    0%
  • TSTOPVRPM.CHIATL
    3.140
    0.190
    6.4%
  • TSTOPVRPM.DALLAX
    1.590
    0.150
    10.4%
  • TSTOPVRPM.LAXDAL
    3.330
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.170
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    4.080
    0.130
    3.3%
  • WAIT.USA
    125.000
    -1.000
    -0.8%
BusinessDriver issuesFinanceNewsTop StoriesTrucking

Towing fraud, staged accidents targeted by new coalition that includes ATA

Trucking industry comes together with insurance-focused groups to fight two vexing problems of fraud

A three-member coalition that includes the American Trucking Associations has come together to combat both towing fraud and staged accidents that are costing the trucking industry millions. 

The ATA joined with the American Property Casualty Insurance Association and the Coalition Against Insurance Fraud in the new coalition, which doesn’t yet have a name. 

“While towing fraud and staged accidents are distinct issues, they are tied together because they both involve some sort of insurance fraud that is a real burden on carriers and members of the public, in addition to insurers,” spokesmen for the three groups jointly said in an email response to questions from FreightWaves. “Additionally, both staged accidents and predatory towing contribute to skyrocketing insurance costs so addressing these problems is one step in mitigating the future cost of insurance for carriers.”

However, the steps that the coalition might pursue indicate it believes there are more specific remedies that it sees for the towing issue than for the staged-accident problem. The sheer number of indictments in the Louisiana staged-accident scam makes clear that there are legal remedies for staged accidents. . 

In its note to FreightWaves, the consortium discussed how it sees the modus operandi on “tow fraud.” Parts of it are perfectly legitimate; for example, tow companies can monitor police scanners and hustle to get out to the site of a crash — be it car or truck — when they hear about it. 

The problem can come with law enforcement’s pressing need to get to the site and deal with issues from injuries to criminal acts. “Law enforcement just wants to help anyone injured in the accident and get the roads cleared so they don’t have time to determine the legitimacy of a towing company’s operations,” the group said in its email. 

But law enforcement isn’t always acting in a legitimate manner either, the group believes.  “There have been documented cases of officers setting up arrangements with companies to receive kickbacks for their referrals,” the email stated. Such a situation can occur when an officer is “given discretion over which tow company is called or has some sort of influence over the referral.”

The group does have specific recommendations for dealing with the issue of towing price gouging or fraud. It is drafting a “model law to stem tow truck price gouging,” with plans to offer it to state legislators. It is also drafting a guide for carriers on best practices for confronting  excessive charges. “Given that both insurers and carriers are harmed by these type [of] scams, it seems only natural to pool resources and coordinate efforts to address these issues collectively,” the spokesmen said in the email.

The list of other steps that states might take to deal with towing is a long one, with a fair degree of specificity. In its email to FreightWaves, the group listed some of its goals: state regulation of towing that would supersede local laws; resources directed toward the agencies that would implement those laws; establishment of towing rates and transparency into their levels; and establishment of a process that would allow carriers to go after “unscrupulous towing operations.”

“Current anti-fraud laws have not effectively addressed the towing problem,” the group said in its email.

Jennifer Wieroniey, executive director of the National Accounting & Finance Council at ATA, on a conference call with FreightWaves said that Matthew Smith, executive director of the National Coalition Against Insurance Fraud, had been speaking with ATA officials. Those officials, she said, had heard “a lot of complaints” about the issue of towing, leading to ATA joining with the other groups in this new coalition.

As far as the type of initiative that the group might pursue on the issue of staged accidents, given that the act itself already is a crime, Smith cited Alice’s Law, legislation that was signed into law in 2019 in New York. Under that law, additional criminal charges can be brought against individuals who cause a staged accident that injures or kills another individual. It was named after Alice Ross, who was killed in a staged accident. 

But Smith noted that while there was no organized opposition to Alice’s Law, it took almost five years to pass in the legislature, “just getting the ear and the attention of the legislators to realize this is an issue and a problem.”

Alice’s Law passed in 2019; Ross died in a staged accident in 2003. 

More articles by John Kingston

Indicted attorney allegedly wasn’t first to direct Louisiana staged accident scheme

Four more indictments in Louisiana staged-accident case; C.R. England targeted in collisions

Louisiana legislature passes tort reform

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.

2 Comments

  1. The towing and storage gauging is a huge issue that has escalated to a point that invoices submitted are ridiculous and criminal! TIP National is happy to support a unified initiative.

  2. Another way to combat this is to try and arrange your own towing before Law Enforcement can get a “rotation wrecker” notified. Unfortunately however, too many times Law Enforcement will not allow you to get your own company involved. They lace more emphasis on clean-up then saving you money. We have been the victims of tow fraud twice. Took one to court and won our case, another is in the hands of the State Attorney General….

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