Iowa's largely unregulated towing industry under growing scrutiny

Case in point: Former employees of the metro's largest towing company, Crow Tow, alleged in court documents of a recently settled case and interviews that some tow truck drivers are being incentivized to push ethical boundaries and exploit unsuspecting motorists in private lots through the company's bonus structure.

• Crow Tow's owners deny wrongdoing, telling Axios its incentives reward employees who act professionally.

The intrigue: It's unknown how widely incentives like bonuses are used in the towing industry because there are few regulations or oversight, Craig Sepich, director for Midwestern government affairs at the National Insurance Crime Bureau (NICB), a nonprofit advocacy group, tells Axios.

Driving the news: The details of Crow Tow's incentives are outlined in hundreds of documents stemming from a 2022 lawsuit against the company that alleged widespread abuses in the metro's towing industry.

• The plaintiff, Melissa Quiroz, had her vehicle towed from a DSM parking lot and was trying to retrieve it when she was struck by a car driven by Anjlena Achwiel — an angry patron who was trying to escape without paying a tow bill.
• Achwiel later pleaded guilty to serious injury by reckless driving.
• While Quiroz's accident was not caused by a Crow Tow employee, she alleges that the company bore responsibility for the predatory practices that escalated tensions among patrons like the one who hit her.

The allegations in the documents, first reported by Axios, include:

• Its drivers prioritize "nonconsensual" tows from private lots because they provide larger bonuses, according to former driver Brandon Fredericksen.
• On some occasions, drivers would remove cars from lots and temporarily hide them a few blocks away, which gave them more time to maximize the number of impounds they could perform, per his affidavit.
• Tow truck drivers tried to remain discreet and avoid recognition so vehicle owners did not have a chance to correct their mistakes, former Crow Tow employee Rex Paullin testified.
• Former driver Daniel Smith alleged he saw another employee use a "Slim Jim" to gain access to a vehicle and remove a parking sticker that permitted it to be on the lot.

The other side: Crow Tow owners — who settled Quiroz's case this year before it was scheduled to go to trial — said they were unaware of the alleged incidents before the suit and believe them to be false.

These employees had a short history with the company or now work for competitors, Marc Beltrame, a lobbyist and spokesperson for Crow Tow, tells Axios.

• Fredericksen confirmed to Axios he now works for a competitor.
• Beltrame alleges Paullin worked for the company for about a week in 2020, but Axios could not confirm that. Smith was terminated in 2021 before completing training per the company, but Smith declined to comment.

Intensifying industry competition

Competition among towing companies across the U.S. has become fierce.

• Some companies have been trying to arrive at accident scenes before competitors and charging more than $10,000 for a single tow — as much as 10 times the typical cost — says Sepich.

Why it matters: Consumers are getting fleeced and it's also contributing to higher insurance costs, per the NICB.

Context: While Des Moines towing companies have not been accused of chasing accident scenes, some of the accusations against them indicate that consumer protections are needed, Sepich said.

Zoom in: At least one of Crow Tow's competitors is offering property owners cash in exchange for contracts allowing them to patrol and tow vehicles from their lots, Beltrame tells Axios.

• It's another indicator of how competitive and lucrative private lot towing has become, State Rep. Heather Matson (D-Ankeny), tells Axios, though Axios was not able to independently verify the allegation.

Details: Evidence of the tense industry competition around the DSM metro also lies in the bonuses that Crow Tow pays its drivers, the court documents outline.

• The most significant is its highest bonus, the $30 per vehicle "spiff" bonus for autos recovered from private lots the company is contracted to service.

By the numbers: Court documents show Crow Tow impounded 20,000 to 25,000 vehicles in 2022, but it was unclear how many were "nonconsensual" — those the owner did not request.

• The company provides a bonus to its drivers of at least $1.50 per vehicle towed, but court records did not reflect how many were $30 spiffs.

Yes, but: Quiroz argued in her complaint that the bonuses were a factor in the company's routine of "engaging in predatory towing practices."

• A "bonus & call report" posted on a company bulletin board showed that during just two weeks last year, employees responded to almost 650 total calls, which resulted in nearly 300 spiff bonuses.

The other side: Crow Tow's services are necessary for businesses to ensure parking is available and patrolling is an essential part of the job, Beltrame said.

• The incentives reward tows properly handled and without vehicle damage. And the drivers are always recorded to review whether they acted properly.
• Impound bonuses from private lots pay more because they require more work from the drivers, he said.

The regulatory fight

A bill introduced in the Iowa House last year by two metro-area Republicans and two Democrats sought to boost the state's weak towing industry regulations.

Zoom in: The legislation wouldn't have banned bonuses but it would have bolstered other towing regulations, like requiring companies to release autos at no cost if drivers return while an impound is in progress before exiting the parking area.

• Owners would also have the right to claim items inside their vehicle even if they cannot pay the towing fees to release them.
• And towing companies would be required to provide an itemized account of all fees and post their rates where they are visible to patrons.

State of play: A similar bill will be introduced again next year, Matson tells Axios.

Threat level: Iowans from across the state who have visited DSM and feel they were wrongly towed have regularly contacted her after the bill was introduced, she said.

At the municipal level, DSM Mayor Connie Boesen and Councilperson Josh Mandelbaum tell Axios they support establishing consistent towing signage requirements regarding how big and where signs can be located as well as information about how an owner can reclaim their vehicle.

• Yes, but: Though DSM's idea surfaced three years ago, no action has been taken.

The big picture: Few states, including Iowa, have regulations or limits to what towing companies are allowed to charge, and there is a growing movement to reel them in, Sepich said.

• A bipartisan group of Michigan lawmakers in November introduced legislation that would require towers to be licensed, comply with new invoicing requirements, and publicly disclose their rates.
• Mississippi lawmakers passed a law this year to set maximum towing rates, a move applauded by the American Trucking Association that contends its members are often the victim of unfair practices.
• Illinois has a new law that takes effect on Jan. 1 to stop towers from charging storage fees on stolen vehicles, a problem that has also been identified in DSM.

The intrigue: Crow Tow, which supports DSM standardizing signage, was the only registered opposition to last year's state bill.

Go deeper: Our past coverage of the metro's towing industry includes controversy surrounding a Crow Tow contract that Polk County supervisors ultimately canceled.

• A DSM resident who was charged $1K in towing fees after police recovered his stolen motorcycle.
• And here's what happens when towed vehicles go unclaimed.