Colorado attorney general announces $1 million settlement with Wyatts Towing, must change unfair, deceptive business practices

Colorado Attorney General Phil Weiser announced a $1 million settlement on Thursday with Wyatts Towing. Part of the settlement calls for the company to return illegally collected fees to consumers, and change unfair and deceptive business practices. 

The 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."

"Wyatts Towing used deceptive practices and broke the law to make a quick buck," stated Weiser in a statement. "They are now taking responsibility and cooperating to resolve this case. While consumers who knew to complain got their money back, those without the time, training, or awareness to act as their own lawyers got cheated out of their hard-earned money. Thanks to this settlement, which will reform how Wyatts operates, future consumers will be treated more fairly."      

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According to the attorney general, at issue was nonconsensual tows, those the vehicle owners do not request, and obligations that towing companies have under state law to avoid unlawful tows and treat customers fairly. 

A new Colorado towing law went into effect on Aug. 10, 2022 and gives more rights to citizens. Dubbed the "Towing Bill of Rights," the law requires tow truck companies to give a 24-hour notice before towing a car from the parking lot of an apartment, condo or mobile home park. The law also prohibits companies from towing cars with expired tags.

The Colorado Attorney General's Office found that Wyatts Towing, part of a group of companies owned by Towing Holdings, contracts with private property owners to be the exclusive towing operator for its lots and controls all aspects of tow including parking lot permitting and towing. The lot owners allowed Wyatts Towing employees to monitor the lots and find and tow vehicles that are improperly parked. The monitors and tow drivers are paid either hourly or on a commission based on the number of vehicles identified and reported to tow. Weiser said this pay structure incentivizes employees to identify and tow as many vehicles as possible and that the company had significant power over vulnerable consumers who might not be able to pay steep fees to retrieve those vehicles. The AG's office said the arrangement led to the company's violation of numerous state laws. 

According to the AG's office, state law requires towing carriers to renew their permits annually but between 2020 and 2023, Wyatts and affiliated companies towed vehicles when they had no valid permits. 

The attorney general also said that the investigation found Wyatts Towing towed hundreds of vehicles over a five-day period in September 2022 and collected more than $100,000 from towing fees and auction sales for the vehicles. Wyatts only issued refunds to "persistent customers" who complained. Some couldn't pay the towing charges. Wyatts sold their vehicles at auction and kept the money. They are required by law to refund money from an unlawful tow that is owed back to the consumer. 

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The AG's office also said that Wyatts continued to violate the new tow law and 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 also allows customers 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." The AG's office said to deter customers from exercising this right, company employees were instructed to tell vehicle owners the PUC form was available on the internet but the company did not provide the form. Next, the company required customers 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.

Additional Information from the Colorado Attorney General's Office:

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. 

"We recognize that this settlement does not completely address the range of concerns raised about misleading signage and other failings in the towing industry," explained Weiser in a statement. "We intend to continue to work with the legislature in it is efforts toward continued improvements in our laws to protect consumers and hold accountable those who prey on vulnerable Coloradans." 

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Jennifer McRae

Jennifer McRae is a digital media producer with more than 25 years of experience in news. Jennifer is part of the digital team recognized for excellence for Best Website in 2022 by the Colorado Broadcasters Association. The staff at CBS News Colorado is Covering Colorado First. Meet the news team or contact us.

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