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Motorists pay in escalating tow-truck turf war
Motorists pay in escalating tow-truck turf war
Industry hit by arson, murder
Weak laws leave drivers in lurch
Dec. 3, 2005. 09:38 AM
DALE BRAZAO, ROBERT CRIBB AND JOHN DUNCANSON
Rogue tow truck operators and body shops are preying on unsuspecting motorists, charging exorbitant fees and holding vehicles hostage, a Toronto Star investigation has found.
With cutthroat competition for lucrative roadside hook-ups, a violent turf war has broken out. During the past two weeks a tow truck driver was murdered and there have been two arson attacks in the industry. Police are investigating.
Industry insiders say city inspectors, charged with regulating the industry, are failing to address the problem by enforcing city bylaws.
"You got bikers, you got crack addicts, you got drug dealers," said John Long, a 37-year veteran of the towing industry and one-time owner of Downtown Towing who has sold all but one of the 60 trucks he had on the road several years ago.
"The problem is nobody wants to dig deep enough and get to the bottom of what's going on," Long said.
Insurance experts say tow truck fees are "out of control" and causing insurance rates to rise. In Toronto the cost of a tow is a regulated, set price, but hundreds of dollars of "storage" and other charges can make a tow bill top $1,000 or more — and there is little motorists can do to protect themselves.
"Fraudsters are attracted to easy money and that's exactly what they've got here," said Mark Yakabuski, a vice-president with the Insurance Bureau of Canada.
Police sources say some tow truck companies are connected to violent biker gangs such as the Hells Angels.
Doug Nelson, executive director of the Provincial Towing Association and the Ontario Recovery Group, which represent several hundred tow truck companies, said hundreds of rogue tow truck operators are in Toronto who take advantage of a regulatory vacuum.
"The Toronto area is the worst of all," said Nelson, who has been in the industry for more than 30 years. "There are no operational standards or qualifications to which an operator must meet before they tow for the public. The number of renegades and accident chasers is in the high hundreds and a lot of these chasers are unqualified and don't have insurance."
Recently, there's been an outbreak of violence in the industry.
A little more than a week ago, tow truck driver Gordon "Sonny" Best was beaten to death by two men wielding a baseball bat. Police sources say they are investigating whether the murder in a parking lot at Woodbine and Cosburn Aves. was a "payback" for something the veteran tow truck operator had done.
Last Sunday, there were two cases of arson in the industry. Police say such vehicle fires are serious acts of revenge.
The first, at Kennedy Rd. and Highway 401, happened at about 4 a.m. Spyros Arniotis awoke to find his 2004 GMC Sierra tow truck on fire in the parking lot of his apartment building and a man fleeing the scene with flames on his body.
"I look down (from my balcony) and my truck is on fire and I see this guy running away from it with flames coming from one of his arms and his leg. He had a (gas) can in his hand, running toward a silver Sunfire. There was another guy driving and they took off."
About 12 hours later, two cars and a tow truck sitting in the lot at the Eglinton Collision Centre in Scarborough were set ablaze. One belonged to a customer, the other two were owned by the shop, said owner Nazo Dabbaghian.
Surveillance video from the shop's security system shows a shadowy figure spreading liquid over two cars and a pick-up truck in the yard. Seconds later a huge fireball explodes.
Eglinton Collision was the body shop at the centre of a scandal that has shaken the city of Toronto's licensing department. Last year, a city inspector tried unsuccessfully to lay charges against the unlicensed body shop that is home to a small tow truck fleet. A dispute broke out, angry tow truck operators threatened the inspector, but charges were never laid. The spinoff from the dispute led to the suspension of two senior licensing officials who allegedly had not backed up the first inspector. Those officials have since been cleared by the city and reinstated.
Eglinton Collision owner Dabbaghian said he believes the fire was an attack by an upstart body shop and towing company trying to muscle in on his territory.
"There's going to be a turf war," he said in an interview. "Whatever is going on just got worse. ... I told the police they better put a stop to this before it gets out of hand. Torching people's trucks is personal."
Police and industry insiders agree the stakes are high in a business that operates on "commissions," which can add hundreds of dollars to the cost of a basic tow.
While the rate for a roadside tow in Toronto is set at $150 in the city and $170 on highways, rates for storing a vehicle or moving it from one body shop to another are unregulated.
Many unwitting accident victims have their cars towed to the nearest shop on the recommendation of a tow truck driver only to find that getting it moved the next day to a different shop approved by their insurance company can cost $1,500 or more in various fees including "secondary" tow, storage, administration, "consultation," fuel and insurance surcharges and "after hours" fees.
"I had a customer call me once asking me if I could come up with $2,100 cash to get a car out of a body shop because the insurance company didn't want it left there," said Tim Gardiner, manager of Diamond Towing, which operates about 40 trucks in Toronto and Whitby. "It's getting crazy out there."
Richard Mucha, manager of licensing for the city, said most towing fees fall into a "grey area" that isn't covered by city bylaws.
Several industry representatives said it is standard for body shops to pay drivers under-the-table kickbacks
"Our division gets complaints regularly about overcharging," he said. "It's a common statement."
In one recent case, a woman rear-ended on Highway 407 in October had a tow truck driver show up and take her car to a nearby Woodbridge auto body shop. When she tried to move the car the next day to another body shop, she received a bill for more than $1,000 — including a $775 tow bill, a one-day storage fee of $180 and a $75 "consultation fee" for showing her the shop — along with a demand that it be paid in cash
Jeff Pitcher said the owner of an Ajax body shop demanded $872 cash before he would release his car after it was towed there following an accident on the 401 on Nov. 14. Included in the bill was a $300 "administrative fee" the owner charged for coming to the shop after hours and opening the door, and a $200 storage fee for the 12 hours the car was on the property.
It was only after he called the police that the owner reluctantly released his car for just the $250 tow fee.
Joey Gagne, owner of the largest tow truck company in Ontario, Abrams, said that a typical tow within 20 kilometres should cost no more than $400. In fact, the average rate, he said, is about $300 which his 150 drivers are told to stick to.
"These body shops are paying off these tow trucks handsomely to bring them vehicles," says Nelson of the Provincial Towing Association. "And if they don't get the repair, they charge all kinds of unorthodox charges."
Dabbaghian acknowledges that he charges hefty fees to customers who want their cars released from his property to be taken to another body shop. But everyone is doing it, he says.
"I'm no angel. I do it too," he said. "I charge people storage fees and administration fees that can get pretty expensive if you want to move your car and go somewhere else."
Several industry representatives interviewed by the Star said it is standard for body shops to pay drivers under-the-table kickbacks of between 10 per cent and 15 per cent of a vehicle's final repair bill. The more damaged the vehicle, the more lucrative the commission.
The two victims of vehicle torchings — Arniotis and Dabbaghian — have been in a financial dispute that entered the courts this month.
Dabbaghian issued a lien against Arniotis's truck seeking more than $3,000 for what he claimed were unpaid repairs he had done on the truck.
Arniotis, who denies owing the money, filed a $10,000 small claims lawsuit against Dabbaghian, his wife and Eglinton Collision Centre earlier this month alleging that Dabbaghian's shop "had failed to complete the work in accordance with the appraisal of his insurer."
The allegations have not been proved in court. Both men deny having any involvement in the torchings.
Prior to having his vehicle torched last Sunday, Arniotis says that on at least two previous occasions someone attempted to tamper with his truck while it was parked outside his apartment building. On Nov. 11, he says his wife found a Molotov cocktail near the truck.
The city's municipal licensing and standards division regulates and inspects the city's 900 licensed tow truck drivers and 900 operators.
But the Star's investigation raises serious questions about how they handle rogue players.
For example, Eglinton Collision has operated without a licence for two years.
Bill Blakes, acting director of investigations for the city's municipal licensing department, said that while Eglinton Collision continues to operate without a licence, inspectors laid bylaw charges against the operation in September.
Blakes said he was unaware of the vehicle torchings or any turf war.
For the public in need of a tow, industry experts say they should remember the car owner has a right to have their vehicle towed to a body shop of choice.
Insurance Bureau of Canada vice-president Yakabuski said the industry needs firm regulations on what they can charge.
"In the end, it's all of the drivers of Ontario paying because it's adding to the pressure on insurance rates," said Yakabuski, whose agency pays $2.7 billion a year in Ontario for collision-related payouts.
"(Body shops) very, very substantially pad the cost related to storing the vehicle, many of them charge an environmental levy for a small drop of oil that might have fallen from the chassis of the car. It's all quite ridiculous but it's adding enormously to the cost of towing and repairing vehicles."
"If you had a regulated rate for towing and all of these related charges they apply, you'd frankly get the scoundrels out of business," he said.
This is the kind of thing I would like to see our mayor fix quickly. We're going to see more violence with organized crime involvement.
How the above mentioned towing company can still continue to operate for 2 years without a license is beyond me. The recent allegations of crooked licensing inspectors concerns me.
The mayor needs to protect its citizens from being preyed upon. People are already in the pits when they get in an accident and don't need to be scammed along the way.
Good on the guy in the article who called police when the garage owner wouldn't let his car out without ridiculous charges.