Thousands of NSW motorists are having cars captured in an elaborate ransom scam worth millions of dollars

[LoudPipes]

Thousands of NSW motorists are having cars captured in an elaborate ransom scam worth millions of dollars

May 17, 2015
Eamonn Duff
Sun-Herald senior investigative writer

Thousands of NSW motorists are having their cars captured by tow truck operators and affiliated crash repairers as part of an elaborate, hostage-style racket worth tens of millions of dollars.

A Sun-Herald investigation has found that sections of the accident towing industry are exploiting distressed, not-at-fault drivers at crash scenes by convincing them to sign "authority to act" forms.

The quasi contracts then activate a range of scams that involve tow truck operators passing on the vehicles to smash repairers who withhold them until excessive "storage" fees are paid. Rogue repairers are also fixing vehicles without the insurer's knowledge or permission, then refusing to release them until further exaggerated charges have been settled.

The Sun-Herald is aware of one Sydney tow truck operator who is currently holding 11 Sydney motorists to ransom – four of whom have not seen their cars for six months.

Suncorp Group confirmedthat last year, it received more than a 100 demands each week from third party repairers or tow truck operators in NSW, at least 70 per cent of which were deemed "inflated".

The rip-off was recently exposed in the NSW Supreme Court where, in a landmark case, two NRMA customers successfully sued a Maroubra smash repairer for refusing to release their vehicles unless they paid storage fees.

NRMA Insurance head of supply chain Steven Bubulj said: "Being involved in a car accident is an emotional and confronting moment. It is abhorrent that someone in that situation would be taken advantage of as part of an opportunistic money making exercise."

The scheme specifically targets not-at-fault drivers because, as a third party, they are not bound by any contractual terms and conditions that exist between the at-fault driver and their insurer. Typically, a tow truck driver arrives at a crash scene brandishing a slip that carries the name of an associated repairer. Once a signature is secured from an often confused and traumatised motorist, it is cited as a contractual agreement that enables unlimited storage costs to be charged by repairers – who, unlike tow truck operators, have no legislative restrictions on what they are allowed to charge. Not only has the racket spread nationally, it is being fuelled by debt recovery agents and lawyers who launch legal action in local courts, knowing insurers will most likely settle than engage in lengthy litigation.

In one recent case, a Melbourne-based woman received notification of a complaint in the Magistrates Court of Victoria for $5200, which had been issued on behalf of her sister following a minor mishap involving both their vehicles, on a family driveway. However, the sister, who had supposedly instigated the legal proceedings, was oblivious to both the action and lawyer who had engaged it on her behalf.

In a submission lodged a fortnight ago to the Accident Towing Regulation review that is underway in Victoria, Suncorp's manager of public policy, Duncan Bone, said it was becoming "increasingly common" for pockets of the repair industry to purchase a tow truck business, or establish a "commission-based relationship" with tow truck operators in order to "capture" cars.

Last year, meanwhile, the NSW government held a Motor Vehicle Repair Industry Inquiry in which the NRMA launched a scathing attack on operators whose "real objective" is to "exploit the misfortune of customers' accidents for their own financial gain".

In his submission to the inquiry, the NRMA's executive general manager of marketing, Roy Briggs, outlined a "raft of practices" used by "unscrupulous repairers", including unauthorised repairs as well "unsubstantiated and exorbitant storage and administration fees to staged accidents and hire cars which never existed".

"In some cases, their 'smash repair' business exists only to legitimise the illegitimate and at worst it cloaks illegal activities that must be stamped out."

He wrote that in the majority of cases, customers "quite innocently believe they are obliged to sign such forms and are doing the right thing. The reality is very different".

"What results is a 'hostage' situation where the repairer preys on the customer's stress ... to extract a maximum ransom...to have the car released.

It is understood a towing company in Sydney's southern suburbs, is holding 11 cars, four of which have been detained for six months. It is understood that for the release of the other seven vehicles, the towing company has asked insurers for approximately $2000 each, in storage and towing fees, to release them. In all cases, the customers had no idea that this would be the ultimate consequence of having their cars towed from crash scenes.

When The Sun-Herald asked the company if it was withholding the cars, its secretary said: "There are vehicles that are waiting for the NRMA to pull their finger out and pick up."

He went on to add that under the act, drivers received three days of storage free and his business could then charge $19 per day. "It's not a lot but after three months, it certainly builds."

When asked if his firm had received any legal demands he said: "No, They (NRMA) just sit in the background, wait for us to sue the customer and then they eventually step in and settle the bill. That's what they do. That's what they have always done."

Suncorp's Mr Bone said: "If drivers take one thing away from this, it's do not sign a thing after an accident until you've spoken to your insurer."

NSW Fair Trading said on Friday it "will undertake enquiries on any complaints made in relation to this issue."

http://www.smh.com.au/nsw/thousands-...0150516-gh1f0k

Landmark court victory exposes criminal collusion on state roads

May 17, 2015
Eamonn Duff
Sun-Herald senior investigative writer

Ruling significant for insurance and smash repair industries, NSW Supreme Court judge says.

The NSW Supreme Court heard how Maroubra Automotive Refinishers ignored numerous formal demands from the customers' insurer, NRMA Insurance, to release the towed vehicles.

Sharon Wong and Salome Ayres had never met until separate car accidents, weeks apart, thrust them together in a landmark court case that ruled smash repairers have no right to charge storage fees while holding customers' vehicles.

The Sydney women both signed "permission to tow" slips after being canvassed by tow truck drivers at separate crash scenes in December 2013 and January 2014.

Those forms named Maroubra Automotive Refinishers as the holding yard until the customers had either given permission to repair the cars – or nominated an alternative repairer to fix them.

When the women chose not to have Maroubra Automotive Refinishers take on the work, they were informed their cars would not be released until both towing and "storage" fees were paid.

In March, a small claims case that would normally have been heard in the local court was granted a stage at the NSW Supreme Court after Justice Lucy McCallum acknowledged its significance to both the insurance and smash repair industries.

The court heard how Maroubra Automotive Refinishers ignored numerous formal demands from the customers' insurer, NRMA Insurance, to release the vehicles.

Justice McCallum dismissed the smash repairer's argument that when tow truck operators nominate a repairer before towing a car, it implied a contract was formed between the tow truck operator, the customer and a repairer.

In doing so, she pointed to legislation that specifically bans tow truck operators seeking authorisation on repairers' behalf. "The reason for that prohibition is obvious. It is [to protect] owners and [prevent] collusion between tow truck drivers and repairers."

Justice McCallum went on to say that Maroubra Automotive Refinishers had been involved in a "transparent attempt to circumvent the regulation. In doing so, she struck out a cross claim that NRMA pay the outstanding fees if the customers were ruled to be not liable.

NRMA Insurance head of supply chain Steven Bubulj said the case was a "huge win" for "unsuspecting customers" which provided "clarity" for future legal challenges.

http://www.smh.com.au/national/landm...0150516-gh1fvt

[Shonky.]

I was a not-at-fault driver some years ago and the ambulance staff who were taking my observations had to repeatedly shoo away a tow truck driver who wanted me to sign an authority to tow. My t-boned car was well out of the way of traffic and no harm to anyone

Absolute bottom feeders. I feel nothing but contempt for that whole industry

[malazn mafia]

Originally Posted by Shonky.

I was a not-at-fault driver some years ago and the ambulance staff who were taking my observations had to repeatedly shoo away a tow truck driver who wanted me to sign an authority to tow. My t-boned car was well out of the way of traffic and no harm to anyone

Absolute bottom feeders. I feel nothing but contempt for that whole industry

+1. After being t-boned, one of these idiot sharks was on the scene in 5 minutes (nobody even called a tow truck) and insisted it was $800 to tow the car 1km to holding yard and that this was the standard price. He even had a female companion in a tight shirt and wearing a skirt appear on the scene to ask everyone if they were ok and act like she was very concerned. If we want a tow truck on the scene, most of us would call one, and not appreciate a tow truck turning up uninvited ...

[happy1]

I believe many (most) of the insurers have their own holding yards and inspection stations. I got rear ended some years ago, and on the phone I was told by SGIO that a tow truck was on its way.

Anyway, if someone has only basic insurance, it would be best to call your own tow truck. Shouldn't be much more than $100 for a short distance tow.
If the car is left along the road over night, it seems quite common here in WA that the car is vandalized over night, broken into, and all the glass smashed before next morning.

[lilmattie]

This happened to me.

Not at fault - first accident I had ever been involved in. I was rear-ended by a lady watching a recent accident, instead of what the traffic in front was doing. Straight up the rear without braking. My car was written off because she pushed the boot up to the rear window.

I was 17, I signed a 'consent to tow' form and the car was hauled away to a holding yard. Thankfully, Suncorp was my insurer at the time and they were pretty quick to pick up the vehicle and move it to one of their own local 'evaluation centres'. From memory, the bill from the first holding yard/towing company was only a couple of hundred $$ rather than the $2k. The lady driving the other car wasn't insured and had had previous accidents in the past. We got no compensation, and the legal advice we received is that it wouldn't be worthwhile chasing it up because she likely didn't enough assets to sue for anyway.

Why are people like this allowed to continue driving, I ask?! Third party fire and theft insurance should be the minimum protection everyone should have - or no driving at all IMO. At least then the other party isn't out of pocket because of at fault mistakes.

I know some good tow truck drivers who are more reputable and aren't involved in the scenario's above. But I agree that the people described in the first post are degenerate thieves preying on a persons momentary weakness. Modern day pirates! Best defence - talk to your kids and family and make sure that they're aware of what they need to do in a crash situation and who they need to call.

[danzvtil]

This must be a NSW thing, AFAIK in SA, the police allocate which tow company attends a crash scene, in order to share the work around. This came about when multiple towies would turn up to an accident scene and get into fisticuffs about who gets the business.

[prydey]

Originally Posted by danzvtil

This must be a NSW thing, AFAIK in SA, the police allocate which tow company attends a crash scene, in order to share the work around. This came about when multiple towies would turn up to an accident scene and get into fisticuffs about who gets the business.

yep, towies can no longer just wait around listening in to police radio waiting for accidents to happen, and then try to be first on scene. i believe other states have also gone down this path.

i know growing up in qld, you'd always see tow trucks just parked up around the suburbs, just waiting.... i believe qld have also now changed their rules so that the police are in charge of calling a tow. not sure.

nsw need to get with the program.

[devilcv8]

Originally Posted by prydey

yep, towies can no longer just wait around listening in to police radio waiting for accidents to happen, and then try to be first on scene. i believe other states have also gone down this path.

i know growing up in qld, you'd always see tow trucks just parked up around the suburbs, just waiting.... i believe qld have also now changed their rules so that the police are in charge of calling a tow. not sure.

nsw need to get with the program.

Nsw already had it where police had the next in line towie get the call. However it doesn't work when police no longer attend minor accidents.

The nsw towing authority also have towing and storage fees that can not be exceeded.
I had a stolen car recovered by a tow company in Pambula which was organised by the police. I actually met the towie at the storage yard as the car was delivered and grabbed some of my stuff. They then tried hitting me with recovery fees, travel to and from Eden as well as daily fees. I went to the tow truck authority. Turns out pulling a car off the middle of a roundabout doesn't get charged as recovery. They can not charge for travel to the job. They also added time to the job which got knocked out by both the police and my statement. The towie was not licensed as a tow truck driver. The storage fees were excessive.
Fees got reduced remarkably which I paid and picked my car up.

[Boza]

Yeah Victoria is the same police isued tow trucks but they still have there little scams like taking the not at fault car to they're yard than charging astronomical fee's just to get it out to take it to your insurer/repairer for assessment

[ebxr8240]

They get the shyts when you tow it home yourself ,,,

[Shonky.]

Originally Posted by prydey

i know growing up in qld, you'd always see tow trucks just parked up around the suburbs, just waiting....

& tip oil on the road when things were quiet too....

[nstg8a]

Still see the towies parked up at the servos waiting now.

[Ruination]

These days its 100% up to the drivers to facilitate crashes since Police no longer attend minor accidents.
I've been in three accidents over the last 3 or 4 years all not at fault, every time the other driver has had no idea what to do and insisted on calling the Police because they are uneducated dimwits. They didn't even know you could lodge an online crash report!

People NEED to know who their insurer's preferred towie. Or a towie company that works with your insurer.

In my eyes this is a part blamer on the people involved in accidents. Its still disgusting that Towie businesses are preying on the weak. But the bottom line is, drivers need to be educated, especially in what to do if you're involved in a crash.

[bathurst-racer]

Slightly off topic but many years ago I called 000 to report a fire at a family business premises. The fire. ambos and police turned up quickly but they were all beaten to scene by a tow truck.

[123Cat]

I usually have gear in my car , so I would get get it towed to my house , thats what I told my son to do too, give me time to think

[Ratmick]

Last time I had an accident I had a pregnant wife and a toddler in the car and it was in the middle of Melbourne. I was sitting at a red light waiting to pull into King Street when a car ran the red light from the other direction and t-boned a car going through the green, and then they both hit me. I got the (now Ex) wife and the toddler out of the car while we exchanged paperwork and I had to virtually beat the towies off with a stick, it was like someone turned a rock over, they came from everywhere. King St is a clearway in rush hour (which it was) and they are always patrolling the street anyway but wtf. All I needed to do was pull the front guard off the tyre and the car was drivable...which I did and told their services were regretfully declined. They would have had to tow the other two cars though.

[Feathers]

Having a family member and good family friend in the business (though they both only do heavy vehicle recovery), if necessary, I'd call them for a recommendation of who they'd trust.

[sr71]

I was hassled years ago by Towies, at an accident. With my coolant all over the road, I said " my car's still good to drive. No need for a tow"
One of them I confronted at Westfield, months later. His response to my strong words was "we help people" . Like others I have met, he had in common, a low IQ.
Some of these guys are probably just following orders from their shifty bosses, and wouldn't be aware of the trouble/costs they're initiating.
At least when you need their assistance, small talk is easy. They are usually Car Lovers.
Good info to have read, though. Cheers LoudPipes

[FPV+fteT3]

Just about everyone has a smart phone google your insurance co while at the accident scene and they will walk you through what they want you to do from details to pictures, witnesses, towing, police etc…….

[geckoGT]

Originally Posted by Shonky.

I was a not-at-fault driver some years ago and the ambulance staff who were taking my observations had to repeatedly shoo away a tow truck driver who wanted me to sign an authority to tow. My t-boned car was well out of the way of traffic and no harm to anyone

Absolute bottom feeders. I feel nothing but contempt for that whole industry

We have this happen all the time. I just tell them to go away until we are ready for them which is after I have assessed the patient, given them time to calm down and I have deemed them fit to take care of the tow details. If the driver is not fit then the police can authorise the tow. If the tow operator refuses to keep away from the ambulance and continues to obstruct me in the performance of my duties, I eject them from the scene. Any member of the emergency services is permitted to eject a tow operator from a scene if they are being obstructive and for them to not comply is an offence.

[Ruination]

Originally Posted by FPV+fteT3

Just about everyone has a smart phone google your insurance co while at the accident scene and they will walk you through what they want you to do from details to pictures, witnesses, towing, police etc…….

Some insurers even have apps for you to use! They couldn't make it any easier for you haha

[geckoGT]

Originally Posted by prydey

yep, towies can no longer just wait around listening in to police radio waiting for accidents to happen, and then try to be first on scene. i believe other states have also gone down this path.

i know growing up in qld, you'd always see tow trucks just parked up around the suburbs, just waiting.... i believe qld have also now changed their rules so that the police are in charge of calling a tow. not sure.

nsw need to get with the program.

No not in QLD. Police only intervene if the tow operators cause trouble or the driver can not deal with the issue.

I once saw a tow operator berate the wife of a cyclist into authorising the "tow" of the bicycle. The wife was going to put the bike into her car but the tow operator told her the insurance require the bicycle be towed by a towing company. I had a quiet chat to the police sergeant when I heard the conversation. The cop checked with the wife that she could take the bike, he loaded it into her car for her and then went over and tore up the tow authorisation in front of the tow operator. The tow operator also go a very clear warning from the cop.

The tow operators here did get the riot act read to them a while ago and they were threatened that any operator that was ejected from the scene of a crash and reported to police by any member of the emergency services would have their towing permit suspended. They are very polite now.

I am certainly not hesitant to threatening a tow operator with the Ambulance Services Act 1991 under which it is an offence to obstruct me from the conduct of my duties. That

[geckoGT]

Originally Posted by bathurst-racer

Slightly off topic but many years ago I called 000 to report a fire at a family business premises. The fire. ambos and police turned up quickly but they were all beaten to scene by a tow truck.

Happens all the time. The tow companies have scanners that listen in on all our radio channels. They also have an app that intercepts our details from the pager service we use and the details get sent to them as a text message to their mobile.

That will all change when we go digital radio.

[TheSneakiness]

Originally Posted by prydey

know growing up in qld, you'd always see tow trucks just parked up around the suburbs, just waiting.... i believe qld have also now changed their rules so that the police are in charge of calling a tow. not sure.

If this happens to be the case then there are a lot of towies that aren't aware of it.

Any major blackspot in QLD will still have 2-3 tow trucks ready at any given time. Well at least in my recent experience.

[Shonky.]

Originally Posted by Ruination

Some insurers even have apps for you to use! They couldn't make it any easier for you haha

Yes, I know that's what I feel like doing after an accident.

Send password reset from iTunes
Log into email account to retrieve
Validate
Download an insurance companies ap from iTunes
Open ap
Look to find what company they use
Determine if the towie hassling me is from said company or not (keeping in mind what keen upholders of the truth they are)
Oh, and don't forget to check for danger on or around the road whilst doing so

Hard to understand how people get it so wrong.....

[Shonky.]

Originally Posted by geckoGT

We have this happen all the time. I just tell them to go away until we are ready for them which is after I have assessed the patient, given them time to calm down and I have deemed them fit to take care of the tow details. If the driver is not fit then the police can authorise the tow. If the tow operator refuses to keep away from the ambulance and continues to obstruct me in the performance of my duties, I eject them from the scene. Any member of the emergency services is permitted to eject a tow operator from a scene if they are being obstructive and for them to not comply is an offence.

This.

This talks to how front of mind other people's well being is for them.

People's health < couple of hundred bucks

[zilo]

Originally Posted by Shonky.

Yes, I know that's what I feel like doing after an accident.

Send password reset from iTunes
Log into email account to retrieve
Validate
Download an insurance companies ap from iTunes
Open ap
Look to find what company they use
Determine if the towie hassling me is from said company or not (keeping in mind what keen upholders of the truth they are)
Oh, and don't forget to check for danger on or around the road whilst doing so

Hard to understand how people get it so wrong.....

Now tell me how I can download an "app" on my Samsung flip fone that just makes fone calls?...


reminds me of an accident where we all exchanged details with a pen and paper and a gen x type wanted us to wait while she wrestled with her tablet to write with.

Noticed the tow truck driver was more than helpful to her...Hmmmmm

we all drove away...LOL

[BadMax]

Originally Posted by Shonky.

absolute bottom feeders. I feel nothing but contempt for that whole industry

Comments like this really annoy me, bit like saying all XYZ religion are all terrorists

To set the record straight, in Victoria at least.

If you are involved in a car accident and the car is not driveable, you call towing allocations directly. I bet 90% of you didn't even know that the phone number used to be on the back of your rego label!

When you call towing allocations they will decide who will attend the seen as every metro area has a rotating roster to avoid incidents of days gone by (punch ons, baseball bats and shot guns).

When the towie loads your car, they will ask you to sign a tow docket which is normal, if they ask you to sign anything else, DON'T! Chances are they will be soliciting for a panel shop, look at the signage on the side of the truck and that'll give you a fair indication of who they really work for.

As the owner of the vehicle you have every right to tell them where to tow it, even home if you're prepared to stump up the first tow and get reimbursed by the insurer at a later date. If not, they will tow it to their yard for holding if it's outside of normal business hours and should tow it to your repairer next business day. There are set storage fees in Victoria if it's stored after the first tow of $15.00 under cover.

You also need to be aware of 'third party recovery' shops. Involved in an accident and you're not at fault? There are a number of shops and a large group that will ask you to sign a release form, in doing so you have just signed over to them the rights to act on your behalf. They will then quote within %5 of total lossing your vehicle, repair it and then sue the at fault parties insurer. By signing over your car, they also have the rights to retain the vehicle until it is paid for or a judgement is made in court.

A friend of mine got caught up in this scam earlier this year, his $160,000 car went missing for some time and was eventually returned to him 2 months later. He learnt the hard way and there was nothing anyone could do about it.

So please don't tar us all with the same brush, some of us just want to make and honest living. A fair days pay for a fair days work.

[Shonky.]

Firstly, I apologise as I can see how my sweeping words would upset someone who was a good egg working in that game

But to be clear, I was talking about the person I encountered being a bottom feeder, I wont shift from that stance, nobody can change how I feel there.

The second part is also true, I harbor a lot of contempt for the industry. Not everyone in it, but the industry in general. Of course I can see how someone wouldn't make that distinction with my comments

That said, what you are talking about sounds like a much better way of doing it, signs of improvement where it was greatly needed. Hopefully that will make its way to QLD

Further, you have attempted to educate people to assist. We can't all know everything about all industries, so we rely on those working in that trade to assist and help, and yes, charge accordingly. When people prey on this unknown zone, thats when people get angry. I agree, not everyone is bad in the game though I'm sure

[geckoGT]

Originally Posted by BadMax

Comments like this really annoy me, bit like saying all XYZ religion are all terrorists

To set the record straight, in Victoria at least.

If you are involved in a car accident and the car is not driveable, you call towing allocations directly. I bet 90% of you didn't even know that the phone number used to be on the back of your rego label!

When you call towing allocations they will decide who will attend the seen as every metro area has a rotating roster to avoid incidents of days gone by (punch ons, baseball bats and shot guns).

When the towie loads your car, they will ask you to sign a tow docket which is normal, if they ask you to sign anything else, DON'T! Chances are they will be soliciting for a panel shop, look at the signage on the side of the truck and that'll give you a fair indication of who they really work for.

As the owner of the vehicle you have every right to tell them where to tow it, even home if you're prepared to stump up the first tow and get reimbursed by the insurer at a later date. If not, they will tow it to their yard for holding if it's outside of normal business hours and should tow it to your repairer next business day. There are set storage fees in Victoria if it's stored after the first tow of $15.00 under cover.

You also need to be aware of 'third party recovery' shops. Involved in an accident and you're not at fault? There are a number of shops and a large group that will ask you to sign a release form, in doing so you have just signed over to them the rights to act on your behalf. They will then quote within %5 of total lossing your vehicle, repair it and then sue the at fault parties insurer. By signing over your car, they also have the rights to retain the vehicle until it is paid for or a judgement is made in court.

A friend of mine got caught up in this scam earlier this year, his $160,000 car went missing for some time and was eventually returned to him 2 months later. He learnt the hard way and there was nothing anyone could do about it.

So please don't tar us all with the same brush, some of us just want to make and honest living. A fair days pay for a fair days work.

Understand all that but please understand that many here are not from Vic. Unfortunately here the number of good tow operators is vastly outweighed by the vultures but it is improving with stricter control.

My pet hate is the tow drivers that follow an ambulance through banked up traffic when it is under lights and sirens. Not only is it illegal to follow an emergency vehicle but it is dangerous too.