Houston's Wild West towing system (TX)

[TowNews]

Houston's Wild West towing system sustains ‘flipping’ scams, regulators say

 

Diana Ploch remembers the disorientation immediately following the September 2018 collision that totaled her Toyota — “just trying to make sense of what was going on.” The airbag from the 2006 Camry had exploded into her face, leaving her dazed. The last thing she was thinking about was what to do with her car.

 

“I was sitting on the ground, and the tow truck driver came over and said, ‘Here, you got to sign this right now; we’re taking the car to the impound lot,’” she recalled. “They were just so authoritative, I didn’t even think to question them.”

 

Her parents, who met her at the vehicle storage facility were worried and equally distracted. When a worker from the tow lot thrust paperwork at them to sign, they did so without much thought. Ploch recalled thinking it was odd how he held one over the other and folded the top form in half so it was unclear what her father was signing. It was only months later that she learned they had been part of a scheme regulators say is taking the Houston area by storm: car flipping.

 

Storage facilities are limited by law on what they can charge owners of vehicles from so-called incident management tows following accidents. Diana’s father, however, unknowingly had granted the storage facility permission to move his car to a body repair shop — with an almost identical name, conveniently located at the same address and owned by the same person — which quickly ran up more than $1,700 in fees for “preservation,” “transfer” and “teardown” on the totaled car.

 

Local police and state regulators say such schemes in which cars are deceptively “flipped” from regulated storage businesses to unregulated repair shops are soaring.

 

“We get 30 to 40 reports a month,” said Montgomery County Sheriff’s Deputy Roy Leck. “And there’s a lot that don’t get reported.”

 

During the past couple years, car flipping cases brought by the Texas Department of Licensing and Regulation, which issues towing and storage licenses, have been exclusively against Houston-area companies, records show. Allstate alone reported recovering more than 120 obviously totaled vehicles per month that had been moved from storage facilities to body shops, an “epidemic” in the Houston area, according to court documents. Instead of a few hundred dollars, the insurer said it paid an average of $1,500 to the body shops, totaling millions of dollars in unnecessary fees per year.

 

No one has a single answer why Greater Houston has proven such fertile ground for the ploy — “we’re fortunate it’s only in the Houston area,” TDLR spokeswoman Tela Mange said. Police and even some wrecker companies, however, say the area’s outdated, free-for-all towing system is at least partially to blame.

 

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