Ontario’s towers may face fee regulation, provincial licensing

By Hayden Kenez

Toronto, Ontario — November 23, 2012 — The government-appointed Steering Committee of the Anti-Fraud Task Force has released a series of recommendations to the Ontario government to crack down on towing fraud, increase regulations and potentially regulate towing rates.

The report makes a number of recommendations regarding the towing industry, including requirements to adhere to a provincial licensing system.

It calls on the government to implement a province-wide licensing system and a not-for-profit, private corporation known as an Administrative Authority (AA) for the towing industry, to address fraudulent practices, consumer protection issues and road safety. It encourages the government to consider the prospect of a regulated fees schedule.

“We are persuaded that province-wide regulation is the best approach and that an Administrative Authority is the preferred model for province-wide regulation,” reads the report.

It mentions that through various exchanges with “participants in the auto insurance system”, they have found a pervasive issue of fraudulent insurance schemes involving towers that potentially operate in a larger, organized ring of fraudsters.
Towers are a critical “first-link” in a chain of fraudulent activity that starts at the scene of a collision, where consumers are most vulnerable, according to the report.

Through implementing an AA to combat fraudulent towing, towers could prove to be an essential tool in combating this problem. Broader problems of road safety concern–such as speeding, unsafe driving around collision scenes and poor management at scenes–consumer protection concerns–such as lack of clarity around fees, demanding payment in cash only, preventing consumers from directing their vehicle to a destination–and neglecting proper employee training are also issues that the report authors hope to address through an AA.

The report states: “Development of a new regulatory model based on our recommendations will require time, resources, extensive consultation, collaboration and appropriate legislation. The government should take an immediate leadership role in this process by establishing an inter-ministerial forum.”

If approved, the inter-ministerial forum would be composed of delegates from many government organizations, including the ministries of transportation, consumer services, community safety and correctional services, finance, municipal affairs and housing and labour.

It would oversee the development of a new regulatory regime, and make recommendations to the Ministers of Finance and Transportation in a 2013 year end report.

To read the full report, please click here.

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