Following a vehicle collision, a driver is often disoriented, panicked, and shocked. In this type of stressful setting, it can be appealing to engage with the first tow truck driver that arrives on the scene. However, an unscrupulous tow truck can be the gateway into the complex network of insurance crime, which can include auto body shops, vehicle storage facilities, health care providers and rental vehicles. Following a collision, tow trucks connected to organized crime networks often receive kickbacks to refer unsuspecting victims to these peripheral businesses, thereby racking up unnecessary and exaggerated expenses.
Unfortunately, many victims cannot tell the difference between a reputable towing service and a fraudster and unwittingly become involved in an organized crime operation. These illegal towing operations are not just a problem for consumers[DK1] ; fraudulent claims place a burden on the healthcare system and on drivers’ benefits, and often become a problem for police when towing turf wars lead to violent interactions among rivals.
Michael Slack, Director, Ontario and AtlanticRegion and ICSS with Équité Association, has witnessed the impacts of organized crime that starts with a tow truck while working on Project Platinum – an investigation into a particularly dangerous network, which launched in February 2020. This high-profile case involving corrupt towing companies resulted in arson, to more than 50 trucks, police seizures of drugs and weapons, and a long list of criminal charges.
The very existence of aggressive tow truck drivers may have a ripple effect in the industry. As more criminals see the potential in committing these schemes, and as towing operators become more violent and problematic, the good tow truck drivers – those who have no interest in colluding with criminals – are driven out. Furthermore, public safety is a concern since operators often race to the scene of a collision on busy highways resulting in dangerous driving behavior.
Often the drivers engage in intimidation tactics when collision victims refuse to be towed as they are waiting for their preferred service provider. “With that intimidation does come the threat ofviolence,” says Slack. “And it can certainly lead to actual violence.” Tow drivers involved in these schemes may also offer a financial incentive to encourage the victim to participate in the fraud; making it known, that failure to cooperate will result in violence[MA2] .
Slack now leads Équité’s involvement with various Ontario towing task forces, including an initiative with the Ministry of Ontario, the Ontario Provincial Police (OPP) and a joint task force group called the Organized Crime Towing Industry Project (OCTIP). OCTIP was created specifically to target the whole criminal industry: the tow truck operators and other bad actors they coordinate with, such as health care providers and rental companies.
Équité plays a role in these task forces by sharing as much information and intelligence as possible on behalf of the insurance industry. Équité is a member-funded organization: its member insurers are directly invested in protecting their good customers from bad actors and in finding a solution to insurance crime and fraud in Canada.
“We strongly believe in the idea of public / private partnerships,” says Slack. “When it comes to policing, Équité plays a significant role by lawfully sharing information with the insurance industry.” Équité’s own internal investigations and collaboration with other insurance companies also identifies possible bad actors, which can then be referred to police for further investigation.
The ministry’s towing initiative hopes to eliminate collision chasing and criminality in the towing industry. Through a pilot project, it now requires tow truck companies to meet provincial criteria, be subject to background checks, and commit to other professional standards. According to Slack,these efforts are already paying off. “There has not been the level of violence that we saw going back four or five years ago,” he explains. “We do still see reports of turf wars, but nowhere near the level of violence that we saw previously.”
Law enforcement is also focusing on combatting the organized crime associated with the towing and auto body shop industry. Specifically, they are looking to identify all of the bad actors within the industry and then hold them accountable. These types of financial crimes are currently low risk and high reward activities for those involved; law enforcement’s objective is to create a higher risk of prosecution that will dissuade bad actors from entering the space.
Équité’s collaboration with police and government task forces creates a mutually beneficial opportunity to disrupt criminal networks and protect communities. Law enforcement is devoting resources to the problem because of the serious and violent nature of these crimes. Équité understands that tackling this problem is a top priority for its members as well. “Ultimately, what we are hoping to do is to target specific professional criminals who are committing insurance crime,” adds Slack. By joining and funding Équité, insurers are taking tangible action to tackle insurance crime and fraud in Canada thereby improving public safety for all.