Abusive tow truck practices said to be systemic. A new bill contains ‘guardrails.’

Democratic state lawmakers aim to address financial impact on low-income renters

By: - March 23, 2022 5:00 am
Wyatts Towing sign

A Wyatts Towing sign outside a shop in Denver’s Capitol Hill neighborhood, pictured March 22, 2022, warns that unauthorized vehicles will be towed. (Faith Miller/Colorado Newsline)

When the father of Doris Morales’ daughter came to visit her in Commerce City, Morales made sure his truck was in the visitor’s parking area of the apartment complex. After all, she said, “You can come and knock on all these doors, and everybody has a story” about the towing at Village Crest apartments.

But her daughter’s father’s truck was towed anyway, Morales said — and, arguing that she should have known it would happen, he made her cover the $380 fee to retrieve it from Elite Towing’s impound lot.

It wasn’t the first time this had happened to Morales. Last year, when thousands of Coloradans were still unemployed due to COVID-19, her car was towed for expired registration. She wasn’t able to pay, she said, because of financial difficulties caused by the pandemic. Morales had to borrow $340 from her sister to get her car out of the impound lot, and in the meantime, she missed a doctor’s appointment for her daughter with Down syndrome.

“To this day, I haven’t been able to pay my sister back,” Morales said.

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With the help of Spanish-language interpreters, Newsline spoke with Morales and two other residents of Village Crest apartments as well as a resident of nearby Village at Gateway, who all had their vehicles towed for baffling reasons from spots where they said they were authorized to park. They explained how suddenly owing hundreds of dollars for transportation to work and appointments left them struggling to cover electricity bills, rent and food costs, and they called for changes that would at the very least require companies to provide a few hours’ notice before removing vehicles from apartment parking lots.

United for a New Economy Colorado, a community organization that supports low-income people in effecting economic, political and social change, learned how big a problem towing was when organizers first reached out to Village Crest tenants to learn about their financial- and housing-related needs.

“Folks feel caught in this sinister choice of paying for my vehicle to get out, or pay for rent,” said Allex Luna, UNE Colorado’s organizing director. On top of that, many residents face problems such as mold and lapsing maintenance, he said, and some had a difficult time accessing rental assistance money designated for the low-income people who bore the brunt of the pandemic’s economic consequences.

State legislation being introduced this week would impose new restrictions on “non-consensual” towing companies that advocates say have too much latitude under current state law. The bill — sponsored by Reps. Naquetta Ricks and Edie Hooton, along with Sen. Julie Gonzales — would prohibit private companies from towing for expired registration, mandate before-and-after photos of towed vehicles, and require 24-hour warnings prior to towing on private property. And it would mandate that vehicles be returned at the owners’ request, even to people who couldn’t pay fees.

The COVID-19 Eviction Defense Project, which works to prevent mass evictions and homelessness during and after the pandemic, is backing the bill.

“We have created a system where the incentives for the towing carriers to engage in practices that are abusive, that are economically harmful, that in many cases drive people into debt, are strongly incentivized,” founder and executive director Zach Neumann said. “There are just enormously strong incentives to engage in bad practices and there are very little guardrails around them. It’s basically tow first, ask questions later, and if they can’t pay, keep their vehicle and sell it.”

Industry leaders oppose the legislation, saying that many of its provisions go too far.

“We are hopeful that legislators will be willing to work with the towing industry, property ownership groups, our law enforcement partners and the Governor’s towing task force to craft thoughtful and reasonable legislation,” Trevor Forbes, the CEO of Wyatts Towing, said in an email.

Forbes, who runs the largest towing operator in the state and represents the industry on the towing task force, concedes that some changes could be made to improve consumer protections. But he argues that many of the changes that Ricks, Hooton and Gonzales want to make could devastate the towing industry.

Possessory liens

Two years ago, Mayra Perez was borrowing a friend’s car because hers wasn’t working. Both cars were parked at Village Crest apartments and removed by Elite Towing. She ended up leaving hers at the lot, because she couldn’t afford to pay for both of them.

“My car was not working, so I was going to have to pay (double) for them to bring it back,” Perez said. Under current towing rules, carriers can charge a base rate of up to $211 for cars non-consensually towed from private property, plus an additional fee of up to $40 per day for storage. On top of that, there’s a $150 “statutory notification fee,” associated with the requirement for towing companies to notify vehicle owners that their cars have been towed, and mileage fees.

Perez said she still doesn’t know what happened to her car, which she left at the impound lot. Towing companies can auction off vehicles after 30 days and use the proceeds to pay themselves for fees owed. They are supposed to return the remainder of the proceeds to the vehicle owner.

Once towing carriers remove a vehicle from a property, they have a possessory lien on the car. This means they have a legal right to the car until the debt, including impound, storage, notification and mileage fees, is paid off.

Ricks’ bill would get rid of towers’ right to a possessory lien for non-consensual tows on private property, meaning people who couldn’t afford to pay the fees would still be able to get their car out right away in order to regain transportation to work, school or appointments.

“The debt would not be secured by the vehicle,” Neumann explained. “And so you would go in, they would say, ‘You owe x dollars.’ Some people would pay it; some people would say, ‘I really can’t pay it right now. I literally don’t have the money,’ and people would get their vehicle back in that moment, and then the person who was unable to pay would owe the money.”

Towing companies could use debt collection services and other existing legal remedies to get the money back, as different industries already do when people don’t pay bills. Something like medical debt, for example, “creates a lot of hardship, but there’s not an asset attached to that that’s being taken to pay that bill back,” Neumann said.

Forbes, however, believes that eliminating the tower’s possessory lien would devastate the industry, by removing the ability for companies to auction off unclaimed vehicles.

“The towing industry could not function without the ability to enforce liens on abandoned and junk vehicles,” he wrote. “Without this ability towing companies could not dispose of nuisance vehicles and their facilities would quickly overflow.”

The bill’s supporters contest that notion and don’t believe it would affect carriers’ ability to auction off vehicles that remain unclaimed after 30 days.

Tipping balance toward consumers

Tow truck companies in Colorado are regulated by the Public Utilities Commission, whose members are appointed by the governor. The PUC develops rules for towing, including maximum rates, and accepts consumer complaints about towing companies.

State lawmakers established the towing task force in 2014. They charged task force members with two central responsibilities: recommending maximum rates for vehicle recovery, towing and storage; and advising the PUC on investigations of overcharges made by towing carriers, according to Becky Quintana, deputy director for the PUC.

Colorado State Capitol
The Colorado State Capitol building is pictured March 22, 2022, in downtown Denver. (Faith Miller/Colorado Newsline)

“Colorado is in the middle of its journey on towing laws,” Neumann said. “A few years ago, it was especially bad. There have been efforts and overtures to improve things in certain ways, and those bills have passed over the past couple of years.”

A bill that Ricks and Hooton ran last year with Sen. Rhonda Fields, an Aurora Democrat, sought to make the task force more consumer-friendly. House Bill 21-1283, which Gov. Jared Polis signed into law in July, added six new task force members:

  • Representative for mobile home owners in Colorado
  • Representative from the attorney general’s office, with a focus on consumer protection
  • Representative for people with disabilities
  • Representative for common-interest communities, such as condominiums and retirement communities
  • Two representatives for communities disproportionately affected by non-consensual towing, including communities of color, immigrants, older people and rural communities

Since the bill passed, Ricks said, the task force has started to meet more regularly and hear public testimony from people who have complaints about towing practices.

With representatives for towing associations, towing operator insurance companies and motor carrier associations, industry representation remains strong on the task force, which Forbes chairs. He was elected by the other members in January, on a vote of 12-1.

Ricks’ bill from 2021 also required the Public Utilities Commission to report to the General Assembly by Dec. 1 of each year on fees for and complaints about non-consensual tows. This annual report must include any recommendations from the task force on rule changes, and whether and how those recommendations were implemented.

“There are certainly things that could be changed to increase protections and transparency for consumers and the towing industry would love an opportunity to work with legislators to develop and implement common sense solutions,” Forbes said.

While the task force has already begun to look at some potential rule changes, including the ability for people to retrieve personal belongings from towed vehicles, this year’s bill is an important step in the process of tipping the balance toward consumers, Ricks said. She and Hooton have been collecting stories about predatory towing practices from Colorado residents.

“There are some things that lawmakers need to do,” Ricks said. “The law seems to really just support the towing industry and not consumers. And so that’s why we’re having these problems. So it’s going to take us looking at it from an analytical standpoint and making sure that consumers’ rights are not just being trampled over, and so that’s what this bill will do.”

Naquetta Ricks
Rep. Naquetta Ricks, a Democrat from Aurora, was elected to the Colorado House in 2020. (Courtesy of Naquetta Ricks)

A 2021 report by the U.S. PIRG Education Fund compared consumer protections against non-consensual towing by state. It found that such protections were “weak, nebulous or non-existent” in most states, including Colorado. But Colorado stood out as particularly bad in a few areas. It’s one of 27 states that don’t require towing companies to reimburse consumers for damages to their vehicle during a non-consensual tow.

Marvin Reyes Gallegos, who lives at the Villages at Gateway apartments in Montbello, got to experience that firsthand.

When a towing company was picking up Reyes Gallegos’ vehicle, he said, they “scraped the entire front and the bottom of the vehicle.” The towing company apologized for the accident, but told him he’d have to pay $450 to fix it, Reyes Gallegos said.

Colorado also lacks some protections for people who want to access items in a towed vehicle, the report found. While tow truck companies are required to provide access to “emergency” items in Colorado, as in eight other states, they’re under no obligation to let people retrieve other belongings. Twenty states currently require that people have access to all belongings left in a towed vehicle, and Ricks’ bill would add Colorado to that list.

“If a person’s car is towed and they have a car seat, or let’s say a toolbox because they are a carpenter, the tow truck company does not have to let them have access to their car to get their things out,” Ricks said. “We’re making sure that people have access to their things. … (Just) because you tow my car does not mean you are entitled to everything in it.”

Just four states — Colorado not included — require towing companies to take photos before and after a car is towed, according to U.S. PIRG’s report. Ricks’ bill would institute that requirement under state law.

New guardrails for towing

The bill would prohibit towing carriers from removing vehicles from private property for expired registration, an action that’s allowed under current Colorado law but one which Ricks and Hooton strongly oppose.

“About 40% of Coloradoans live in common-interest communities, which are apartment complexes or (homeowners association) communities, and the parking is, you know, where there’s issues,” Ricks said. “Because property managers … hire these tow truck companies to monitor their parking lots. So people’s cars are towed for expired tags, parking in a handicap zone, etc.”

Early in the COVID-19 pandemic, Department of Motor Vehicles offices were closed, Ricks noted. That meant “it was taking much longer for people to get appointments to go and get their license plates, or their tags. So you found a lot of people’s cars being towed during that period.”

Hooton said expired tags should be a “law enforcement issue.”

“If you were on a public highway and you had an expired tag, law enforcement may not pull you over,” she pointed out. “They might give you a small ticket, right? But chances are you’ll just get a warning. And they’re not going to make you get out of your car and call a towing company and have you towed, because there’s no harm, no foul.”

Edie Hooton
State Rep Edie Hooton, a Boulder Democrat, speaks to member of the media about a trio of bills that aims to curb gun violence in the state. (Moe Clark/Colorado Newsline)

Forbes says his company has already stopped towing vehicles for expired registration. “This decision was made as a result of extremely long wait times at DMV locations and the difficulties Colorado residents have had getting their registration stickers from the state in a timely manner,” he wrote.

The legislation would also make more controversial changes.

When asked about what changes they’d like to see to the towing industry, Morales and some of the other renters who spoke to Newsline called for a written warning before their vehicles were towed.

On Feb. 28, Reyes Gallegos was on his meal break from his construction job when around 4:30 a.m., he parked his vehicle outside his apartment and went inside. The truck was towed within 15 minutes, he said. At 6 a.m. he went to pick up the truck from Wyatts Towing and had to pay $300 to get it out.

He lost work that day and didn’t have money to pay his rent, he said. He brought screenshots to show the towing company how much he was paying to park at the apartment complex, but neither the company nor the landlord would help him.

“It’s not fair of them to just in 10 minutes take $300 like that,” Reyes Gallegos said. “I don’t make $300 that fast … It was very frustrating.”

“They should at least leave notices, and if you don’t move your car it’s logical that you don’t care about your car, so tow it,” he added. “But to come out of your house having to go to school, to work, or something, and seeing that your car’s not there, the first thing you’re going to think about is the money. ‘Gosh, I am going to have to waste my money for the food and now I’m going to leave my family without food just to take the car out.’”

Ricks’ bill would require towing carriers to provide 24-hour warnings before towing vehicles from private property. Forbes, however, decried that proposition.

“A requirement to warn vehicles for 24 or more hours prior to tow would effectively mean that parking rules could not be enforced and anyone could park in a fire lane, handicapped spot or reserved space for 24 hours without any kind of consequence,” Forbes said. “Effectively, this would end all parking rules in the State of Colorado.”

Village Crest resident Martha Maldonado wants more than just a written warning — she believes towing companies shouldn’t be involved at all with parking enforcement at apartment complexes. That should be left up to the property managers, she said.

In February, Maldonado’s son stopped by the apartment complex to bring Maldonado some money for the utility bills. He parked his truck in the visitor parking section around 10:30 p.m., she said. His car was towed within 15 minutes. “I can’t pay the bills now, because he had to pay to get the truck out and couldn’t lend me the money,” Maldonado said.

Residents of Village Crest live in constant fear of having their cars towed, Maldonado’s daughter Amy Quintana (no relation to Becky Quintana) said, meaning that many vehicles are parked along the streets outside the complex.

The property managers only give out one parking sticker per apartment, even for those with more than one bedroom. Many of the spots inside the complex are left empty.

“They don’t want to give out stickers, and no one’s going to park in here, so everyone’s out in the streets getting towed out there, and then everyone’s fighting for the visitors’ (spaces),” Quintana said. “There’s only … like, six visitor parkings.”

When Morales’ car got towed, she said, she parked on the street because she was worried it would happen again. A couple of days later, she came outside to find her windows were broken.

“They spray paint the cars out there,” Quintana added. “They write ‘S,’ or — I don’t know if it’s kids or what it is, but their cars get damaged outside with there being parking in here, but just because they’re scared of the towing trucks.”

Quintana lives with Maldonado and was expecting to give birth soon when she spoke with Newsline in late February.

“If they were to tow my truck in these conditions, with my daughter being pregnant and close to labor — it’s pretty scary,” Maldonado said.

But by limiting parking enforcement, the bill could end up hurting renters, argued Drew Hamrick, the Colorado Apartment Association’s senior vice president for government affairs and general counsel. The association opposes the bill’s 24-hour notice requirement as well as another section that would require property managers to authorize all tows — restricting carriers’ ability to tow vehicles when the leasing office isn’t open.

“The likelihood of (renters) being able to come home and park in their own parking space is going to be dramatically impacted,” Hamrick said, “and if somebody is in their parking space, they’re going to have a heck of a time doing anything about it in any meaningful time frame.”

Changing complaint process

Currently, people who feel their legal rights have been violated by a towing carrier can submit an informal complaint to the PUC through its consumer affairs team, the commission’s Becky Quintana said. This team analyzes whether the towing carrier violated PUC rules or state laws and helps facilitate a resolution between the consumer and the company. People can submit complaints to the consumer affairs team online, call them at (303) 894-2070, or schedule an in-person appointment.

“The Consumer Affairs team works to resolve the complaints informally between the complainant and the company,” Quintana wrote. “If resolution cannot be reached, the complainant may file a formal complaint to start a proceeding that is ultimately decided by an Administrative Law Judge.”

From Nov. 1, 2021, through Jan. 31 of this year, PUC records show that 212 complaints were filed with the PUC’s consumer affairs team. In about 14% of cases that were closed over the same time frame, the towing carrier was determined to be out of compliance with PUC rules. As part of its work to resolve disagreements between carriers and consumers, the consumer affairs team saved complainants a total of $1,528 over those three months, records show.

The company with the highest number of complaints over the three-month period was Wyatts Towing, which is widely believed to be the largest towing company in the state. Wyatts Towing had 49 complaints, followed by Other Transportation with 13. Elite Towing and Klaus’ Towing each garnered 12 complaints.

Wyatts Towing was found “not in compliance” in five cases, Elite Towing in two cases and Klaus’ Towing in one case. The data from the consumer affairs team does not include details about the types of violations alleged by consumers. However, the team saved people who complained about Wyatts Towing a total of $900 from November through January, records show.

Outside of that informal complaint process, a towing carrier found to have violated the PUC’s towing rules can be forced to pay a civil penalty.

Formal administrative proceedings for towing carriers, which can lead to civil penalties, occur much more rarely than the informal complaint resolution process. Still, the PUC referred four separate cases involving towing carriers to administrative law judges in 2021, all involving the same company: Code 3 Towing, operated by Eric Houston and based in Grand Junction. All four cases were still active as of March 21, 2022, PUC records show.

Most recently, Houston’s company was fined $5,318.75 in October for violations including “Failure to have proper authorization prior to the performance of a nonconsensual tow” and “Failure to disclose within 30 minutes, the location of the storage facility to the responsible law enforcement agency having jurisdiction over the place from which the motor vehicle was towed.”

But while the state can impose monetary penalties for carriers that don’t follow the rules, low-income people who face the steepest consequences from non-consensual towing — like having to choose between recovering a vehicle or putting food on the table — often don’t have the resources to recoup damages from predatory companies, Neumann pointed out.

“Most of the folks who get towed are low-income renters,” he said, and the complaint process “takes a very long time. It’s not an easy one to undertake, and usually by the time people even begin the process, they’ve had to take out a payday loan or money from family to get their car back, and at that point, you know, a busy life means you’re not going to pursue it.”

The bill would attempt to address that imbalance by establishing the Office of Tow Hearings within the Public Utilities Commission. Administrative judges or hearing officers overseen by the new office would listen to complaints from people whose vehicles were towed from private property without their consent, and determine whether towing carriers had violated the law.

“Our hope for that office would be that consumers would have a lot more voice and a faster process to address concerns and grievances when they feel that their vehicles have been taken illegally or not consistent with the contract they’ve signed with their landlord,” Neumann said.

Moreover, a towing carrier found to have violated any of the bill’s provisions on towing would be guilty of a deceptive trade practice and subject to enforcement action by the Colorado attorney general. This would potentially provide for stronger consequences than those currently existing under state law.

Morales believes the Latino residents of Village Crest apartments bear the brunt of non-consensual towing, in part because they’re less likely to advocate for themselves. When a white resident had their vehicle towed, she recalled, the same day, the towing company brought the person’s vehicle back.

“I feel like it’s because this person knew their rights,” Morales said. “We need not only an understanding of rights, but to make sure that we’re actually practicing our rights. But we’re just afraid of the consequences that could happen.”

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Faith Miller
Faith Miller

Reporter Faith Miller covers the Colorado Legislature, immigration and other stories for Colorado Newsline.

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