The FTC has proposed a new rule banning junk fees, which could benefit truckers frequently targeted in predatory towing practices.
What is predatory towing in trucking?
Predatory towing in the trucking industry refers to unscrupulous towing companies that take advantage of truck drivers or trucking companies in vulnerable situations to charge exorbitant towing rates and fees or even unlawfully tow vehicles.
Predatory towing businesses may also hold a truck, sometimes with freight on board, “hostage” until the trucking business pays their invoice. Truckers are extremely vulnerable to these practices when they no longer have access to their equipment and their livelihood is on the line.
In a recent study conducted by the American Transportation Research Institute (ATRI), researchers found that over 80% of surveyed motor carriers experienced excessive rates and unwarranted service charges from towing providers.
As regulations and enforcement vary from state to state or city to city, managing the abundance of predatory towing is difficult.
A Proposed Ban on Hidden Junk Fees
The FMCSA supports the FTC’s proposal to ban junk fees and promote invoice transparency. Junk or hidden fees can equal thousands of dollars for vulnerable trucking businesses.
A predatory towing business may charge fees for services that provide no additional value or to be assumed as a part of the service charge. The FMCSA is requesting more specific protection for truckers in these situations. More specifically, it “prohibits companies from charging any fee for an ancillary good or service that has no value, costs nothing extra to provide, or that reasonably would be assumed to be included in the upfront price of the good or service” (FMCSA). For example, a towing company would no longer be allowed to charge “equipment fees” for using their standard equipment to provide towing services.
Other practices for which the FMCSA seeks further protection for truckers include hiding fees until after the towing service is complete and charging an “excessive number of fees for excessive amounts.”
The FMCSA has also proposed that each illegal fee created should be charged as a separate violation and “that the rule expressly prohibit companies from charging or collecting mandatory fees that are not appropriately disclosed, are not included in the total price, and/or cannot be fully calculated upfront.”
How can you avoid predatory towing?
Know where to park: Avoid parking in unauthorized or restricted areas, including private lots, no-parking zones, and areas with unclear signage. Look for designated truck parking spaces and comply with any posted restrictions, such as time limits or permit requirements. Plan your route in advance and identify secure parking options such as truck stops, rest areas, etc. Use parking apps and online resources that provide real-time information about available parking spaces, parking regulations, and amenities at truck stops and rest areas.
Be cautious: Watch out for suspicious behavior from towing companies, such as standing by on the scene of an accident or being unclear about the service cost.
Establish relationships: Consider working closely with a towing company that you trust or one that is recommended by a fellow trucker or a mechanic that you work with. You may consider establishing agreements with these trusted providers in the regions you frequently travel to or through.
Get things in writing: Get the cost of the tow services in writing with all of the charges itemized. Verbal agreements offer minimal protection from predatory practices.
ATRI summarized national median rates and excessive rates in the table shared below. The information in the table can be used as a guide or reference to determine if certain rates, fees, and surcharges are excessive or unwarranted and if you might be a victim of predatory towing.
Source:
Start your trucking business off the right way! Learn more about our new book, How to Start, Drive, and Accelerate a Trucking Business.
Interested in being notified when more free resources or courses are available? Subscribe down below and you'll be the first to know!
Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC does not assume responsibility for any omissions, errors, or ambiguity contained herein. Contents may not be relied upon as a substitute for the FMCSA's published regulations. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.