Stronger Rules for Towing and Vehicle Storage Services
The Ontario government is strengthening consumer protection by introducing new rules for towing and vehicle storage services. These new rules will help Ontario's drivers make informed decisions and have confidence that they will be dealt with in an honest and fair way when their vehicle is towed and/or held in a vehicle storage facility. The rules will also help keep auto insurance affordable for Ontario consumers by helping to reduce fraud and abuse in the auto insurance system.
The government is taking action to respond to concerns raised by consumers and industry stakeholders. Exaggerated or inflated fees, questionable and intimidating roadside practices, and unsafe driving and vehicle operation were identified as concerns in the tow and storage sectors.
The government surveyed over 500 Ontario consumers about their experiences with tow trucks and vehicle storage lots in the province:
- 97 per cent of respondents said that a tow truck driver/business should be required by law to post identifying information on its truck(s)
- 96 per cent of respondents stated that a list of fees for each service the driver/business provided should be included on the consumer's invoice
- 96 per cent said a tow truck driver/business should be required by law to accept credit cards (in addition to cash payments)
- 87 per cent stated that a tow truck driver/business should be required by law to post their prices at their offices and on their website, if one exists
- 85 per cent of respondents said that a tow truck driver/business should inform consumers if they are getting a financial reward or incentive for towing a vehicle to a particular storage or repair shop
- 84 per cent stated that a tow truck driver/business should be required by law to provide prices to consumers in writing before the consumer's vehicle is towed
Regulating Ontario's Vehicle Towing and Storage Sectors
Changes to the Consumer Protection Act and its regulation will take effect on January 1, 2017, and will establish tow and storage-specific consumer protection measures. They will require tow and storage providers to:
- Get permission from a consumer or someone acting on their behalf before providing tow and storage services
- Record the name and contact information of the consumer, along with the date and time of authorization
- Disclose certain information to the consumer or the person acting on their behalf, in writing, such as the provider's business name, contact information and address where the vehicle will be towed
- Accept credit card payments, in addition to cash, from consumers
- Provide an itemized invoice, listing services provided, the cost for each service, and the total cost before demanding or receiving payment
- Make available a current statement of rates at their place of business and on any existing website
- Post other information, for example, the provider's name and telephone number on the side of a tow truck, at all business premises and on any website
- Provide a consumer (or someone acting on their behalf) with access to the towed vehicle, at no charge, so that they may remove personal property from the vehicle between 8 a.m. and 5 p.m. on business days
- Prohibit tow and storage providers from recommending repair and storage facilities, legal service providers or health care service providers unless a consumer or a person acting on their behalf specifically asks, or the provider offers to make a recommendation and the consumer (or authorized person) agrees
- Disclose to a consumer whether the provider is getting a financial reward or incentive for providing a recommendation for towing a vehicle to a particular storage or repair shop
- Establish minimum insurance coverage including general liability insurance of $2 million, customer vehicle insurance of $100,000 and $50,000 cargo insurance
- Maintain authorization and disclosure records, invoices, copies of insurance policy, and current statement of rates for three years
Some exemptions will be made for certain tow and storage providers. For example, certain disclosures, authorization, invoices, and related record-keeping requirements will not be required if services are provided under a prepaid agreement or membership in an association, such as the Canadian Automobile Association (CAA) where the consumer is not being charged for the specific service being provided. These exemptions will also apply when the tow and storage services are provided when a vehicle is purchased or leased and the consumer is not charged for the specific service being provided.
In addition, when a vehicle is towed and stored for law enforcement purposes or detained or impounded under other statutes, regulations or municipal by-laws, or as a result of a lawful power of seizure, a limited number of the new rules will apply. While these tows are not initiated by a consumer, the consumer is generally responsible for charges. The new regulation will protect the consumer, for example, by requiring the provider to make available publicly a current statement of rates, post identifiers and other information, and provide the consumer with the option to pay by credit card.
Addressing Vehicle Storage Issues
The Repair and Storage Liens Act deals with the rights of repairers and storers to claim a lien against vehicles they repaired and/or stored. Most of the changes to the Repair and Storage Liens Act will take effect on July 1, 2016.
Changes to the Repair and Storage Liens Act and its regulation will:
- Reduce the notice period from 60 days to 15 days for vehicles registered in Ontario. Currently a storer is required to give written notice of a lien to the owner and other interested parties within 60 days after the day it receives the vehicle (subject to the lien), if the vehicle was brought in for storage by someone other than the owner or without the owner's authority. The new rules are expected to improve storage practices and remove associated costs from the auto insurance system.
- If the notice is not provided, a lien is limited to the unpaid amount owing for the period of 15 days from the day of receiving the vehicle.
- Provide guidance to courts in determining the "fair value" of repair or storage where no amount has been agreed upon. A list of discretionary factors (e.g., fixed costs, variable costs, direct costs, indirect costs, profit and any other relevant factors) is set out for consideration.
Regulating Tow Trucks
The government is adding regulations under the Highway Traffic Act that will include tow trucks in the definition of commercial motor vehicles under the Commercial Vehicle Operator's Registration (CVOR) system. Vehicles commonly known as tow trucks and other vehicles used for towing, such as the flatbed trucks known as "tilt and loads", will require a CVOR certificate.
This new regulation will come into effect on January 1, 2017. This will allow time for tow truck operators to prepare for and apply for a CVOR certificate before the requirement comes into force.
The CVOR system is used to track the safety of truck and bus operators in Ontario. Its effective monitoring and intervention system for operators helps improve road safety. The Ministry of Transportation monitors each operator enrolled in CVOR, and assigns a Carrier Safety Rating, available to the public, based on collisions, inspections, convictions and the results of facility audits. A single CVOR certificate covers an operator's entire fleet.
Under CVOR, tow operators will be responsible for all the drivers and vehicles in their operation. These responsibilities include:
- Monitoring the conduct and safety performance of drivers
- Resolving driver safety issues when they are identified
- Keeping vehicles in good, safe condition at all times
- Ensuring load security
Tow trucks will continue to be exempt from some requirements faced by other classes of vehicle under the CVOR system, such as hours of service limits, daily inspection, detailed recordkeeping requirements and entering truck inspection stations, until the government has concluded consultations with the towing industry and other stakeholders on an effective regulatory regime for tow trucks.