Like many large-scale lucrative fraudulent activities, towingscams frequently require assistance from a variety of individualswho use legitimate businesses to defraud insurers and consumers.While the majority of tow operators are honest, hard-workingpeople, there are some who are brazen enough to perpetrateelaborate frauds that involve tow truck drivers, body shops,parking lot attendants and others.

Some of the more popular scams involve crooked body shops thatteam up with dishonest towing firms to steal cars that have been inaccidents explains James Quiggle, director of communications forthe Coalition Against Insurance Fraud.

“Towing firms will often monitor police frequencies for crashes.The tow truck shows up and the driver convinces the victim to takethe car to a dirty body shop. The car goes to the shop and theinsurance company is charged outrageous fees,” says Quiggle. “Therepair costs are inflated and sometimes more damage can be done tothe car or just shoddy repairs.” The tow company may alsocharge inflated rates just to tow the vehicle.

Another scam involves private lots where a tow truck will “justtow a car parked on private property (such as a parking lot) andrefuse to release it until exorbitant rates are paid,” said CarolKaplan, director of public affairs for the National Insurance CrimeBureau.

Some towing companies that have municipal contracts will workwith lower level clerks who will notify towers of cars that need tobe towed. Quiggle says it's not unusual for towing companies tojust take cars off of the street and claim that the meter ran out. The towers will “scoop up cars and take them to an impoundlot because there may be kickbacks to the tower and impound lot.”In many cases the victim is charged an outrageous fee for the towor to get the vehicle back.

Then there are the companies that drive around looking forparking violators so they can tow the cars away. In some cases,there are “lookouts” who notify the towing company of violators andsometimes the lookout actually owns the towing company. Sadly, thisis legal in many areas and victims have little or no recourse.

In some cases, bandit towers actually profile cars so they towthose that will bring them the most money with the least hassle.According to the Esurance website, they don't choose older, beat upcars because the owners may not be able to afford the impound fees.They also avoid high value cars like those from Mercedes or Porschebecause of the possibility of damaging the car during the tow. Ifthe car is damaged then the tower will actually have to reimbursethe victim. This leaves more moderately priced cars like Hondas andToyotas as targets for these bandits.

Kaplan says towing fraud seems to be more prevalent in “LosAngeles, Chicago and Houston, although no area of the country isoff-limits to these criminals.”

Quiggle agrees saying that urban areas of the country seem moreprone to the scams because there are more cars to exploit.

“A crooked body shop can open and affiliate with a crooked towtruck company and there is no end to the number of cars they canprofit from,” he says. “They can exploit opportunities and createadditional ones without anyone knowing.”

Ron Galati, a Philadelphia-area body shop owner involved morethan 40 people in his extensive operation that included his wife,son, daughter, several insurance adjusters and tow truck drivers, acity official, and a Philadelphia police officer. Galati was quotedas saying, “I live my life to cheat insurance companies – my highevery day is to cheat insurance companies.”

Galati frequently created false reports saying vehicles had beendamaged by deer, other animals and even falling objects. Adjustersfrom Erie Insurance and Allstate helped to falsify the claims.Galati is alleged to have arranged car accidents or purposefulvandalism in an effort to create more business for his shop.According to a report by NBC Philadelphia, his efforts resulted inmore than $2.3 million in payments from insurers.

While the case involving the towing scams has not yet gone totrial, Galati was found guilty last October of hiring three hit mento murder his daughter's boyfriend, as well as on weapons charges.He also faces another murder for hire case for conspiring to kill arival body shop owner and his son.

Protecting your car

Quiggle says drivers can protect themselves and their vehiclesfrom towing scams by taking some basic steps:

• If there is an accident, make sure the police are called andlet them handle the towing arrangements or call a company yourself.Don't use one that shows up “by chance.” Using a reputablecompany and honest provider minimizes the chances that you'll betaken advantage of so you don't have to pay for services that arealready included. AAA and USAA are examples of two organizationsthat provide towing services for their members.
• Don't give the driver your insurance information or too muchpersonal information. Fraudulent companies will use this data tocontact you and impersonate the insurance company.
• Make sure the tow truck driver creates and signs a damagereport on the scene before the car goes anywhere.
• Do not sign any additional forms beyond an approval to tow thevehicle to a designated body shop.
• Know the price of the tow up front, get it in writing andobtain a copy of any paperwork from the tow truck driver. This willhelp to insulate you in case your car mysteriously“disappears.”
• Make sure the name on the tow truck matches the name of thecompany on the paperwork.
• Check with your insurer to see what is covered. Some companieshave preferred providers that they work with regularly.
• Individuals who are victims of towing scams can call the localBetter Business Bureau to file a complaint, as well as the frauddepartment or local insurance administration for the state. Theyshould also file a police report.
• When parking in a private lot, don't leave the premises sincebandit towing companies frequently use lookouts to monitor lots. Atow truck could be there in just minutes to tow your car away.

According to Esurance, if the car is already hooked up to thetow truck, the driver can demand half of the towing fee to releaseit. If you don't have the money or will not pay the amount, itbecomes a civil matter and the driver must release the vehicle orface being charged with violating state vehicle codes and taking avehicle without consent. Property owners are supposed to waitan hour before having a vehicle towed, but bandit operators canremove a car in as few as five or 10 minutes.

Kaplan says since individual insurers are frequently the targetof these scams, there are no figures detailing how widespread thefraud is. However, she says that based on what they've seen,drivers are frequently charging thousands of dollars for bills thatshould only be a few hundred dollars.