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April 6, 2021 10:15 AM, EDT

ATA, Insurance Groups Vow to Tackle Towing Fraud, Staged Accidents

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American Trucking Associations, the American Property Casualty Insurance Association and the Coalition Against Insurance Fraud have announced a plan to combine their resources to pursue legislation to tackle two of trucking’s biggest problems — towing fraud and staged accidents.

In a statement April 5, ATA said its recent survey of nearly 200 motor carriers found that 77% of respondents cited law enforcement referrals as problematic when selecting a towing company and 70% reported they faced serious issues getting their cargo released after a tow.

The joint statement said that staged crash rings also are a dangerous and pervasive issue for the trucking industry, citing a New Orleans crash ring that has made recent headlines while conspiring with personal injury attorneys suspected of facilitating bogus court claims.

“The partnership brings the nation’s largest property-casualty insurance and trucking associations together and pairs them with the coalition’s formidable consumer interest credibility and voice in the field of insurance fraud,” Coalition Against Insurance Fraud Executive Director Matthew Smith said in the joint statement. “When it comes to changing the landscape for policy holders in the specific arena of towing and staged accident fraud with these three organizations, the possibilities are endless.”

Brumbaugh

Brumbaugh (Transport Topics)

ATA Chairman Sherri Garner Brumbaugh, who is president of Findlay, Ohio-based Garner Transportation Group, said motor carriers are increasingly concerned with the impact of predatory towing and staged accidents that are hurting their ability to conduct business.

“By joining with APCIA and the Coalition Against Insurance Fraud, we are confident we can put an end to these unscrupulous and unethical practices,” Brumbaugh said.

The group said in local jurisdictions, towing companies are abusing insurers and crash victims by showing up to sites without authorization or contracted by authorities that receive kickbacks to tow unsuspecting vehicle owners at exorbitant rates. The tows often also include unreasonable storage and access fees.

“We know from our members that some of the most egregious examples of abuse arise out of accidents involving commercial vehicles,” said Robert Passmore, APCIA’s department vice president for auto and claims policy. “We look forward to working with the other members of the CAIF and ATA to address these issues across the country.”

The partnership announcement comes after the formation of a new ATA-led task force created in response to trucking companies reporting in an industrywide study the abuses they have suffered at the hands of towing companies.

In some states, it’s not uncommon for a tow truck operator to arrive unsolicited at an accident scene, pull a tractor-trailer out of a ditch, tow it away and on the scene present the carrier with an inflated invoice, even holding the carrier’s truck hostage until the bill is paid, said Jennifer Wieroniey, executive director of ATA’s National Accounting & Finance Council.

As an example, Wieroniey cited an instance last year in which a Wisconsin motor carrier got a big surprise when one of its tractor-trailers hauling a truckload of cheese had to be pulled from a ditch on Interstate 64 in central Virginia and was billed $202,000 for removal and towing.

READ MORE: Officials Call $202,000 Towing Bill a Textbook Example of a Scam

The partnership said it will soon release a guide on how to prevent becoming a victim of billing fraud both pre- and post-tow. Simple steps such as documenting what equipment was on-site and educating drivers not to sign “consent to tow” forms can save carriers thousands of dollars and hours of wasted time, the release said.

“Momentum is growing behind these issues, and changes could be coming at the federal and state levels very soon,” it said.

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