Tow truck operations are taking New Yorkers for a ride, according to the city Department of Consumer and Worker Protection.
The watchdog agency is currently in the process of notifying 20 tow truck company licensees in Queens that they are among 130 operations citywide that are suspected of widespread fraud in the industry. None of the companies have been identified publicly by the department.
An in-depth investigation suggests that a quarter of all licensees in the five boroughs may have engaged in widespread insurance and workers’ compensation fraud and the agency expects to name the operations in the coming days.
“The tow truck industry already has a reputation for predatory practices and our investigation has led up to believe that they are also putting both their customers and workers at risk with falsified insurance and workers’ compensation documentation,” Department of Consumer and Worker Protection Commissioner Lorelei Salas said.
The ongoing and lengthy legal investigation investigation into the tow truck industry suggests 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 collisions.
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. “These companies not only potentially committed fraud but endangered to public and their workers,” Salas said. “We will do everything in our power to shut them down.”
The notices will inform the companies of their right to meet with the DCWP to defend the charges in the notice before the agency renders its final decisions. Following the meetings, DCWP will consider the evidence and arguments presented and make their final determination about revocation.
Companies who do not respond to the notice will have their licenses revoked.