The need to have your vehicle towed is rarely a pleasant experience and always an expensive one. Even an honest towing company’s invoice can be an inconvenient and sometimes distressing expense. Towing fees, and the laws that govern the towing industry, typically are not conversational topics at social events or around the dinner table, and in fact, such subjects may not ever cross one’s mind until faced with a towing need, followed by an unwelcome invoice. Yet, a 2018 survey by the Property Casualty Insurers Association of America revealed that consumers named excessive rates and fees as "the worst problem insurers and consumers face with towing companies.”

Much has been written about “predatory towing” practices and the paucity of regulation of unethical practices. Maryland has been one of only a handful of states to require a towing company to provide notice and photographic evidence of a parking violation before they remove a vehicle from a parking lot, but little else has been done to regulate or prohibit dishonest practices.

Setting aside a discussion of more obvious predatory practices, the problem of excessive towing charges for nonconsensual towing has become a nation-wide issue for both private and commercial vehicle owners—and excessive charges are only the beginning. Once towed, a vehicle owner must overcome the obstacles of retrieving the vehicle and personal items in the vehicle (usually stored on a secured lot)—the vehicle and personal items held in a veritable hostage situation until towing charges, storage fees, and administration costs are paid. When the fees are unscrupulously excessive, these obstacles can be insurmountable.

Excessive fees appear most often in situations involving nonconsensual towing, or police-directed tows, following an accident. Like many states, Maryland has statutory provisions that allow for vehicles involved in an accident to be towed at the direction of a local police department. The police department maintains a rotating list of approved towing companies and at the direction of a police officer, a vehicle is removed from the roadside and typically is taken to the approved tower’s lot to be retrieved by the owner. The towing companies on the list come at the bidding of the police and the vehicle owner often has almost no say as to what company is selected.

Maryland Code authorized police departments to “establish and maintain a list, by county, of qualifying tow companies for use by the Department and to adopt regulations to establish standards for the tow companies, including application procedures and minimum qualification requirements. Beyond these regulations, however, there was little-to-no governance on how much the approved towing companies could charge for its services, and virtually nothing stopping them from charging whatever they wanted. Some towing companies charged by the pound, based on vehicle weight and cargo. Such practices lead to excessive charges unrelated to the type of work being performed.

But the tide is beginning to change. Maryland is enacting legislation that pushes back against towing companies that charge excessive fees. Earlier this year, Maryland’s House and Senate both passed House Bill 487 (“HB-487”), which subsequently was enacted under Maryland’s Constitution, Article II, section 17(c), and will take effect on October 1, 2022.

Among other things, HB-487 amends the present Public Safety article to include definitions that give meaning to “approved rates,” “authorized tow companies,” “nonconsensual towing,” and “tow list.” It also defines the differences between heavy-duty and medium-duty towing and eliminates per-pound fee structures. It extends the former authorization for police departments to maintain a tow list to making that list available to the public upon request, and it requires police departments to establish what information is required to be included on an invoice for nonconsensual towing.

More importantly, in the interest of public safety, it provides recourse for vehicle owners by providing an avenue for adjudication of complaints from vehicle owners against an authorized towing company and allows vehicle owners more freedom to choose a preferred towing company over a company from the authorized list.

Additionally, HB-487 creates a new Title 16A—Nonconsensual Towing Services—which eliminates the lien on equipment, cargo, and the vehicle that was towed, allowing owners access to the vehicle to recover personal property or cargo, regardless of whether payment has been made for the towing company’s services. If there is no dispute over the fees, then the vehicle owner shall pay the invoice and the vehicle and cargo shall be immediately released. If, however, there is a genuine dispute as to the reasonableness of the fees or the amount, then the tow company shall release the cargo immediately to the owner of the cargo, with the following distinction: if the cargo owner is other than the transportation company, then the cargo is released directly to the owner; but if the cargo is owned by the transportation company, then upon a letter from the transportation company’s insurer stating that there is sufficient coverage for the claim, the cargo will be released.

This new legislation keeps authorized towing companies honest and gives motor carriers reasonable access to their vehicle and its cargo after a police-directed tow following an accident. In Maryland, motor carriers no longer will be blindsided by towing services with excessive fees when they had no voice in requesting those services.

Section 16A-101 - [Effective 10/1/2022] Tow company to provide vehicle owner or operator or designee with reasonable access to vehicle

(a)

(1) In this title the following words have the meanings indicated.

(2) "Authorized tow company" has the meaning stated in § 2-314 of the Public Safety Article.

(3) "Heavy-duty towing" has the meaning stated in § 2-314 of the Public Safety Article.

(4) "Medium-duty towing" has the meaning stated in § 2-314 of the Public Safety Article.

(5) "Police-initiated towing" has the meaning stated in § 2-314 of the Public Safety Article.

(6) "Tow list" has the meaning stated in § 2-314 of the Public Safety Article.

(b)

(1) Title 16 of this article does not apply to police-initiated towing services by an authorized tow company.

(2) Police-initiated towing does not create a lien or security interest for the authorized tow company in any equipment, vehicle, or cargo.

(c) An authorized tow company shall provide a vehicle owner or operator or the owner's designee with reasonable access to a vehicle that is the subject of a police-initiated towing so that the vehicle owner or operator or the owner's designee may access and collect any personal property or cargo contained in the vehicle, regardless of whether any payment has been made for the authorized tow company's services.

(d)

(1) If there is no dispute as to the fees assessed by the authorized tow company for the police-initiated towing of a vehicle:

(i) The vehicle owner or operator or the owner's designee shall pay the authorized tow company's invoice; and

(ii) The authorized tow company shall release a vehicle and any cargo that was the subject of a police-initiated towing immediately.

(2) If there is a genuine dispute as to the reasonableness or amount of the fees assessed by an authorized tow company:

(i) The authorized tow company shall release the cargo immediately to the owner or the owner's authorized agent in accordance with this subsection on submission of:

1. Proof of ownership if the cargo does not belong to the transportation company; or

2. If the cargo belongs to the transportation company:

a. A letter from the insurance company stating there is coverage for the relevant claim or accident and including, at minimum, a claim number, policy number, and policy limit; or

b. If an insurance policy required under item 2 of this item is not high enough to cover the cost of the cargo clean-up, a signed letter of guarantee from the transportation company; and

(ii) Beginning October 1, 2023, the authorized tow company shall release the vehicle to the owner or the owner's authorized agent on payment of 20% of the invoice by the vehicle owner or operator or the owner's designee.

(3) A payment under paragraph (2)(ii) of this subsection does not eliminate the remainder of the financial obligation to the authorized tow company.

Md. Code, CL § 16A-101

Added by 2022 Md. Laws, Ch. 575, §1, eff. 10/1/2022.

If you have questions about this article, or about towing issues in general, please contact Denise Reverski (dreverski@setlifflaw.com) at 804-377-1272 or Steve Setliff (ssetliff@setlifflaw.com) at 804-377-1261.