FMCSA: FTC Proposal Should Include Truck Towing Provisions
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The Federal Motor Carrier Safety Administration has filed comments in support of a Federal Trade Commission proposed rule banning junk fees that trucking regulators have argued should include provisions to mitigate predatory truck towing.
FMCSA’s comment letter to the FTC, dated Feb. 7, outlines concerns with predatory towing practices that significantly increase costs for commercial motor vehicle owners and operators. The agency urged the FTC to consider additional specific restrictions against the types of unnecessary and excessive mandatory junk fees plaguing truckers.
“When a truck driver’s vehicle is towed, they can’t earn a living until they get it back — leaving them vulnerable to predatory junk fees from towing companies,” Transportation Secretary Pete Buttigieg said in a statement. “We support FTC’s efforts to stand up for truckers by acting to ban junk fees and prevent predatory towing fees that can cause significant financial harm.”
Said FMCSA acting Deputy Administrator Sue Lawless: “Predatory towing negatively impacts consumers, including commercial motor vehicle drivers and trucking companies. It is detrimental to the overall health of the trucking industry, and it’s time to end excessive rates, surcharges and other unfair fees associated with predatory towing.”
Buttigieg and Lawless
The predatory fees include hiding fees until the tow is completed, charging for unnecessary or worthless services, and imposing an excessive number of fees for excessive amounts, FMCSA said.
“These predatory fees can add up to thousands of dollars for truckers,” the agency said.
The FTC proposal, “Rule on Unfair or Deceptive Fees,” was posted in the Federal Register on Nov. 9.
The proposed rule would prohibit unfair or deceptive practices relating to fees for goods or services — specifically, misrepresenting the total cost of goods and services by omitting mandatory fees from advertised prices and misrepresenting the nature and purpose of fees.
While the FTC proposal does not specifically deal with predatory towing, FMCSA said in a comment letter to the commission that it may significantly benefit FMCSA’s regulated community “as it relates to the predatory towing practices that have a substantial financial impact on commercial vehicle owners and operators.”
Predatory towing is a problem for consumers, including CMV drivers and trucking companies. It's harmful to the overall health of the trucking industry, and we want to end excessive rates, surcharges and unfair fees associated with predatory towing. https://t.co/3fPIMFsK8S. pic.twitter.com/BFcWtDK2MX — FMCSA (@FMCSA) February 7, 2024
In response to concerns by truckers dating back years, in 2021, American Trucking Associations, the American Property Casualty Insurance Association and the Coalition Against Insurance Fraud announced a plan to combine their resources to pursue legislation to tackle two of trucking’s biggest problems — towing fraud and staged accidents.
An American Transportation Research Institute report, “Causes and Countermeasures of Predatory Towing,” released in November, took a deep dive into this long-festering controversy within the trucking industry. Focused on towing practices from 2021-2023, the goal of the study was aimed at improving the relationship between the towing and trucking industries.
The ATRI analysis of crash-related towing records found that 29.8% of invoices included excessive rates or unwarranted additional charges. The leading reasons given for fees were miscellaneous service charges (found in 8% of invoices), administrative fees (6.5% of invoices) and equipment rates (6.3% of invoices).
One 2021 case involved a Wisconsin motor carrier that was hit with a $202,000 towing and removal bill after one of its tractor-trailers hauling a truckload of cheese had to be pulled from a ditch on Interstate 64 in central Virginia. The owner estimated the costs should have been in the neighborhood of $20,000 to $30,000.
The FMCSA comment letter said there are two contexts in which predatory towing of CMVs may take place: consensual and non-consensual.
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“The consensual context usually occurs following a vehicle accident or malfunction where the CMV owner or operator has requested towing service and given permission for the towing company to tow the vehicle,” FMCSA wrote. “The non-consensual context most often occurs when an unlawfully parked vehicle is removed from public or private property at the request of a law enforcement officer or a property owner, and the CMV owner or operator has not given permission for the towing.”
FMCSA said there are a wide range of problematic practices associated with predatory towing, and a number of them center on the mandatory or otherwise unavoidable fees that towing companies charge.
“FMCSA supports the FTC’s proposed prohibitions against hidden and misleading fees,” the agency said. “FMCSA further suggests that the final rule clarify that companies are prohibited from charging any mandatory ancillary fee that is not included or disclosed in the total upfront price.”
The provision on excessive fees could focus on consumers who have “little to no ability to avoid, negotiate, decline, anticipate or limit the cost of the fees,” FMCSA said, noting CMV operators often drive in multiple states and state laws governing towing practices vary greatly.
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