Department of Consumer and Worker Protection Investigation Uncovers Widespread Fraud in the Towing Industry

NEW YORK, NY – Department of Consumer and Worker Protection (DCWP) Commissioner Lorelei Salas today announced an in-depth investigation into the tow truck industry that suggests widespread insurance and workers’ compensation fraud. DCWP is in the process of notifying approximately 130 tow truck company licensees—a quarter of all licensees—of its intent to revoke their licenses. Each licensee will have an opportunity to meet with DCWP to defend the charges and submit documents in support of their defense. DCWP will issue final determinations after reviewing all defenses.

“The tow truck industry already has a reputation for predatory practices and our investigation has led us to believe that they are also putting both their customers and workers at risk with falsified insurance and workers’ compensation documentation,” said DCWP Commissioner Lorelei Salas. “These companies not only potentially committed fraud but endangered the public and their workers. We will do everything in our power to shut them down.”

An ongoing lengthy legal investigation indicates that these companies have likely committed various acts of fraud, including:

submitting fraudulent certificates of liability insurance;
having less insurance than indicated on their license application and as required by law;
falsely listing someone other than the true owner of the company as the owner of the tow truck company;
submitting fraudulent insurance ID cards; and
claiming to have insurance policies and/or workers’ compensation coverage that doesn’t exist

DCWP currently licenses 512 tow truck companies. A tow truck company license is required if a business moves or removes disabled, illegally parked, or abandoned motor vehicles or vehicles involved in accidents by another motor vehicle for direct or indirect compensation. As part of the application process, companies must have personal and property liability insurance for tow trucks and submit a copy of their insurance certificate. Licensees must notify DCWP within 10 days if their insurance policy is cancelled, expires, or is terminated for any reason. Companies must also provide proof of workers’ compensation insurance or a certificate of exemption if they are not required to maintain it.

Last year, DCWP conducted over 1,830 inspections of tow truck companies and issued 214 violations, suspended 22 licenses, and revoked 10 licenses. DCWP provides tow truck companies with a checklist of what inspectors look for to help them avoid violations. Last year, DCWP also received more than 1,448 complaints about the industry making it the second most common complaint category. DCWP encourages consumers to get their tips before using a tow truck company and to file a complaint at nyc.gov/dcwp or by calling 311 if they have a problem.

DCWP’s investigation is being handled by the General Counsel Division, which is led by General Counsel Tamala Boyd and Deputy General Counsel Michael Tiger.

The NYC Department of Consumer and Worker Protection (DCWP)—formerly the Department of Consumer Affairs (DCA)—protects and enhances the daily economic lives of New Yorkers to create thriving communities. DCWP licenses more than 81,000 businesses in more than 50 industries and enforces key consumer protection, licensing, and workplace laws that apply to countless more. By supporting businesses through equitable enforcement and access to resources and, by helping to resolve complaints, DCWP protects the marketplace from predatory practices and strives to create a culture of compliance. Through its community outreach and the work of its offices of Financial Empowerment and Labor Policy & Standards, DCWP empowers consumers and working families by providing the tools and resources they need to be educated consumers and to achieve financial health and work-life balance. DCWP also conducts research and advocates for public policy that furthers its work to support New York City’s communities. For more information about DCWP and its work, call 311 or visit us at nyc.gov/dcwp or on its social media sites, Twitter, Facebook, Instagram and YouTube.

Media Contact:
Abigail Lootens | Melissa Barosy
Department of Consumer and Worker Protection
(212) 436-0042
press@dca.nyc.gov

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