Some towing companies that have municipal contracts will work with lower level clerks who will notify towers of cars that need to be towed. Quiggle says it's not unusual for towing companies to just take cars off of the street and claim that the meter ran out. The towers will “scoop up cars and take them to an impound lot because there may be kickbacks to the tower and impound lot.” In many cases the victim is charged an outrageous fee for the tow or to get the vehicle back.

Then there are the companies that drive around looking for parking violators so they can tow the cars away. In some cases, there are “lookouts” who notify the towing company of violators and sometimes the lookout actually owns the towing company. Sadly, this is legal in many areas and victims have little or no recourse.

In some cases, bandit towers actually profile cars so they tow those that will bring them the most money with the least hassle. According to the Esurance website, they don't choose older, beat up cars because the owners may not be able to afford the impound fees. They also avoid high value cars like those from Mercedes or Porsche because of the possibility of damaging the car during the tow. If the car is damaged then the tower will actually have to reimburse the victim. This leaves more moderately priced cars like Hondas and Toyotas as targets for these bandits.

Kaplan says towing fraud seems to be more prevalent in “Los Angeles, Chicago and Houston, although no area of the country is off-limits to these criminals.”

Quiggle agrees saying that urban areas of the country seem more prone to the scams because there are more cars to exploit.

“A crooked body shop can open and affiliate with a crooked tow truck company and there is no end to the number of cars they can profit from,” he says. “They can exploit opportunities and create additional ones without anyone knowing.”

Ron Galati, a Philadelphia-area body shop owner involved more than 40 people in his extensive operation that included his wife, son, daughter, several insurance adjusters and tow truck drivers, a city official, and a Philadelphia police officer. Galati was quoted as saying, “I live my life to cheat insurance companies – my high every day is to cheat insurance companies.”

Galati frequently created false reports saying vehicles had been damaged by deer, other animals and even falling objects. Adjusters from Erie Insurance and Allstate helped to falsify the claims. Galati is alleged to have arranged car accidents or purposeful vandalism in an effort to create more business for his shop. According to a report by NBC Philadelphia, his efforts resulted in more than $2.3 million in payments from insurers.

While the case involving the towing scams has not yet gone to trial, Galati was found guilty last October of hiring three hit men to murder his daughter's boyfriend, as well as on weapons charges. He also faces another murder for hire case for conspiring to kill a rival body shop owner and his son.

Protecting your car

Quiggle says drivers can protect themselves and their vehicles from towing scams by taking some basic steps:

• If there is an accident, make sure the police are called and let them handle the towing arrangements or call a company yourself. Don't use one that shows up “by chance.” Using a reputable company and honest provider minimizes the chances that you'll be taken advantage of so you don't have to pay for services that are already included. AAA and USAA are examples of two organizations that provide towing services for their members.
• Don't give the driver your insurance information or too much personal information. Fraudulent companies will use this data to contact you and impersonate the insurance company.
• Make sure the tow truck driver creates and signs a damage report on the scene before the car goes anywhere.
• Do not sign any additional forms beyond an approval to tow the vehicle to a designated body shop.
• Know the price of the tow up front, get it in writing and obtain a copy of any paperwork from the tow truck driver. This will help to insulate you in case your car mysteriously “disappears.”
• Make sure the name on the tow truck matches the name of the company on the paperwork.
• Check with your insurer to see what is covered. Some companies have preferred providers that they work with regularly.
• Individuals who are victims of towing scams can call the local Better Business Bureau to file a complaint, as well as the fraud department or local insurance administration for the state. They should also file a police report.
• When parking in a private lot, don't leave the premises since bandit towing companies frequently use lookouts to monitor lots. A tow truck could be there in just minutes to tow your car away.

According to Esurance, if the car is already hooked up to the tow truck, the driver can demand half of the towing fee to release it. If you don't have the money or will not pay the amount, it becomes a civil matter and the driver must release the vehicle or face being charged with violating state vehicle codes and taking a vehicle without consent. Property owners are supposed to wait an hour before having a vehicle towed, but bandit operators can remove a car in as few as five or 10 minutes.

Kaplan says since individual insurers are frequently the target of these scams, there are no figures detailing how widespread the fraud is. However, she says that based on what they've seen, drivers are frequently charging thousands of dollars for bills that should only be a few hundred dollars.