The lucrative towing industry is regulated by the state, but has earned a reputation for predatory practices, especially when it comes to billing.
Local towing companies are highly imaginative when it comes to finding new charges and fees to tack on to your bill. Many Nevadans lose their vehicles, because they can’t afford to pay the fees.
Major changes, however, are underway. It took three years for a Henderson businessman to get his idea approved. Now that it’s working, it could save Nevada drivers millions per year.
Longtime towing operator Bobby Ellis was blunt during a 2012 interview, telling the I-Team that some in his industry operate like bandits.
“Sometimes, I’m ashamed to admit I own a tow company. Some of them are like Jesse James, some of these places,” he said in 2012.
More than 33,000 vehicles are towed involuntarily per year in Nevada, and some of the tow companies have created a dazzling array of ways to jack up the bill… not just the fee for the tow and the daily storage, but extra fees if they have to use a winch; a forklift fee; a fee if you want to visit your vehicle; a fee to tape up your windows; lien fees or auction fees.
A typical bill these days is around $750 per vehicle. Charges of up to $3,000 are not unusual. Some tow drivers were paid commissions, which became an incentive for predatory practices.
“All the charges were off the charts,” said Ellis’ attorney and former Henderson Mayor Jim Gibson. “You had to have money to get your car back out, so a poor guy who is paycheck-to-paycheck, doesn’t have a real expensive car and something happened, and that car gets towed; he might lose that car. He loses the car, he probably loses his job.”
Worse than that, Ellis says tow companies will sell your car and then sue you for unpaid charges.
In 2012, Ellis rolled the dice and built Nevada’s first vehicle storage lot, a tow yard which would charge one flat fee: $20 per day.
Under state law, he couldn’t open. He and Gibson asked the Nevada Legislature to change the law which could save consumers millions of dollars, but the politically powerful towing industry pulled out all the stops.
The same fight was waged before the Clark County Commission and in the 2015 legislature.
When Ellis brought in a partner – Ewing Brothers, the oldest towing company in Las Vegas – he was finally able to open E and E Vehicle Solutions. It has already made a huge difference for consumers and their insurance companies.
“It’s a big cost savings to have it brought here. It benefits the consumer and the insurance company, of course. I think we’re averaging $316 per car savings,” said Bob Compan with the Nevada Insurance Council.
More than half of the insurance companies are now signed up. The new law, which took effect this week, means that, at the scene of an accident, tow operators are required to tow the vehicle to the low cost lot. Any exception requires a signature of the vehicle owner, who would have to check a form to authorize sending the vehicle to a more expensive lot. This change was made, because a few companies found ways to side-step the law and still charge more. One company was cited 178 times as of last November.
“They were finding ways to circumvent these. They were bringing these cars to profit centers,” said Compan. “They will charge $150 a day storage, plus administrative fees, plus tow charges.”
Another impetus for change is coming from Clark County Sheriff Joe Lombardo, who was disgusted by some of the towing horror stories that surfaced and decided to get Metro Police out of the towing business. The department recently asked for bids to find a private company to handle all towing dispatches for law enforcement, which will further ensure the towing law is not circumvented.
“The unnecessary and avoidable costs have been weeded out of the system,” Gibson said.
Ellis says he hopes the changes will improve the overall image of the towing industry, though he says the fight is not yet over.
“They didn’t want this changed at all. They fought us and fought us and are still fighting us,” he said.
There are three low-cost vehicle storage yards in operation in the valley. More could be built as the idea catches on.