Colorado Tow Company Settles Lawsuit for $1 million

Cited for numerous violations, Wyatts Towing, despite denying allegations, has agreed on a 1-million-dollar settlement with Colorado’s Attorney General Phil Weiser. An investigation revealed that the company towed thousands of vehicles without a valid permit or proper authorization, charged unlawful fees and illegally kept consumer funds, and engaged in deceptive and unfair business practices.

A new Colorado tow bill, dubbed the Towing Bill of Rights, implemented in 2022 requires tow truck companies to give a 24-hour notice before towing a car from the parking lot of an apartment, condo or mobile home park. 

The AG's office said that Wyatts continued to violate the new tow law and also "instituted practices to keep more funds from vehicle sales and reduce the amount returned to vehicle owners or the State, such as driving up storage fees on more valuable vehicles." 

The Towing Bill of Rights also allows customers to "retrieve their vehicle if they pay 15% of the towing fees, up to a maximum of $60. The unpaid portion is a debt owed to the towing carrier and the consumer must sign a PUC form affirming that they owe the payment." The AG's office said to deter customers from exercising this right, company employees were instructed to tell vehicle owners the PUC form was available on the internet but the company did not provide the form.  

Next, the company required customers to enter a loan agreement and provide detailed, sensitive personal information to retrieve their vehicles. The company also charged the highest allowable interest rate it could without obtaining a supervised lender license. 

State law also requires towing carriers to renew their permits annually but between 2020 and 2023, Wyatts and affiliated companies towed vehicles when they had no valid permits. 

Under the terms of the settlement, Wyatts agreed it will not seek to collect the $236,000 in outstanding debt it is holding from consumers who participated in the company's initial implementation of the reduced retrieval law. Wyatts will also pay $764,000 to the State to be used for any restitution to consumers, future consumer fraud or antitrust enforcement, consumer education, or public welfare purposes. Wyatts also agrees to change its business practices including the following:  -- Refund all fees and costs charged to consumers for future tows that are done in error, and collect information from all individuals paying to release a towed vehicle for the purposes of refunds if ever deemed necessary; -- Not charge a notification fee until all statutory requirements have been met; -- Not impose additional obligations on consumers to retrieve their vehicle other than submitting the PUC form, providing consumers with the PUC form, and not charging more than the permitted statutory interest when collecting remaining amount; -- Establish and implement policies requiring clear documentation for every vehicle sold or auctioned for overage payment purposes; and -- Conduct audits at least three times a year to monitor erroneous towing trends. 

Source: www.cbsnews.com