Business ProfileforWyatts Towing

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On December 21, 2023, The State of Colorado Department of Law and Towing Holdings LLC, d/b/a Wyatts Towing, Boulder Valley Towing, Klaus’ Towing, Lone Star Towing, Summit Vehicle Solutions, and Towing Operations, LLC (collectively, “Wyatts”) entered into an Assurance of Discontinuance reaching a $1 million settlement after a monthslong investigation found that since 2019 the company towed thousands of vehicles without a valid permit or proper authorization, charged unlawful fees and illegally kept consumer funds, and engaged in deceptive and unfair business practices to discourage Coloradans from exercising their rights under the state’s towing laws.

At issue in this case are nonconsensual tows—tows that vehicle owners do not request—and obligations that towing companies have under state law to avoid unlawful tows and treat consumers fairly.

Wyatts Towing is part of a group of companies owned by Towing Holdings that controls all aspects of a tow including parking lot permitting, towing, and contracting with private property parking lot owners to be the exclusive towing operator for their lots. Parking lot owners allow Wyatts employees to monitor their lots to find and tow vehicles that are parked improperly. Monitors and tow drivers are paid either hourly or on a commission based on each vehicle they identify and report to tow. This pay structure incentivizes employees to identify and tow as many vehicles as possible.

This business ownership model gives the company significant power over vulnerable consumers who might not be able to pay steep fees to retrieve their vehicle. This arrangement also led to the company’s numerous violations of state laws.

Towing without a valid permit; charging and keeping unlawful fees

State law requires towing carriers to renew their permits annually, and towing companies are not allowed to tow vehicles or retain any fees for tows without a valid permit. Between 2020 and 2023, Wyatts and affiliated companies towed vehicles when they had no valid permits.

One such instance was a five-day period in September 2022 when Wyatts towed hundreds of vehicles and collected over $100,000 from towing fees and auction sales of these vehicles. Wyatts only issued refunds to persistent consumers who complained. Some customers towed during this period did not or could not pay the towing charges. Wyatts sold their vehicles at auction and kept the money. Failing to refund money from an unlawful tow that a towing company knows is owed back to consumers is a violation of the CCPA.

Wyatts’ practice of not refunding consumers for money owed to them extends beyond permit lapses:

Illegally authorized tows. The Towing Bill of Rights, which went into effect August 10, 2022, prohibits tow drivers from approving tows and allows property managers and other third parties to authorize tows to avoid improper tows. Despite the new law, Wyatts still allowed tow drivers to authorize tows on residential properties from August 10 through September 20 in 2022. A Wyatts executive told investigators that only consumers who filed a complaint were refunded towing fees.

Notification fees. From Oct. 1, 2019, to Oct. 20, 2022, approximately 2,000 vehicle owners were charged a notification fee of at least $75 each for a nonconsensual tow, but there was no documentation that the company sent a notice via certified mail as required by state law. The company collected over $200,000 in improper fees and none of the consumers were refunded.

Profiting off the sale of abandoned vehicles. Towing operators may sell unclaimed vehicles to recover towing fees and costs, but they may not keep excess proceeds from the sale. Excess proceeds must instead be paid to the State and to vehicle owners. Before the Towing Bill of Rights, Wyatts kept excess proceeds that it had no right to keep. Wyatts also instituted practices to keep more funds from vehicle sales and reduce the amount returned to vehicle owners or the State, such as driving up storage fees on more valuable vehicles.

The Towing Bill of Rights allows consumers to retrieve their vehicle if they pay 15% of the towing fees, up to a maximum of $60. The unpaid portion is a debt owed to the towing carrier and the consumer must sign a PUC form affirming that they owe the payment. Wyatts executives were worried about this retrieval statute because they thought that consumers would pay a reduced rate and it would be difficult to collect the remaining debt.

To deter consumers from exercising this right, company employees were instructed to tell vehicle owners that the PUC form was available on the internet, but the company did not provide the form. Next the company required consumers to enter a loan agreement and provide detailed, sensitive personal information to retrieve their vehicles. The company also charged the highest allowable interest rate it could without obtaining a supervised lender license. The company ended the loan program in July 2023 after the PUC adopted a rule at the recommendation of the attorney general’s office to prohibit compulsory loans.

Under the terms of the settlement, Wyatts agrees it will not seek to collect the $236,000 in outstanding debt it is holding from consumers who participated in the company’s initial implementation of the reduced retrieval law. Wyatts will also pay $764,000 to the State to be used for any restitution to consumers, future consumer fraud or antitrust enforcement, consumer education, or public welfare purposes. Wyatts also agrees to change its business practices including the following:

• Refund all fees and costs charged to consumers for future tows that are done in error, and collect information from all individuals paying to release a towed vehicle for the purposes of refunds if ever deemed necessary;
  Not charge a notification fee until all statutory requirements have been met;
  Not impose additional obligations on consumers to retrieve their vehicle other than submitting the PUC form, providing consumers with the PUC form, and not charging more than the permitted statutory interest when collecting remaining amount;
  Establish and implement policies requiring clear documentation for every vehicle sold or auctioned for overage payment purposes; and
  Conduct audits at least three times a year to monitor erroneous towing trends.

For more information, please contact the Colorado Department of Law at (720) 508-6000 or https://coag.gov/