Thing to Come: House Bill 1037 Seeks to End Predatory Towing Fees and Practices in North Carolina
Overview
House Bill 1037, titled "End Predatory Towing Fees and Practices," is a significant legislative effort in North Carolina aimed at regulating towing fees and practices to protect consumers from unfair charges. The bill introduces measures to ensure transparency, fairness, and reasonableness in the towing industry, effective October 1, 2024, with funding provisions starting July 1, 2024.
Key Provisions of House Bill 1037
Section 1: Amendments to Article 7B of Chapter 20 of the General Statutes
Title Change:
The title of Article 7B of Chapter 20 is amended to "Notification of Towing and Towing Fees and Practices."
Addition of New Section: § 20-219.25. Towing Fees and Practices:
Reasonable and Non-Excessive Fees:
All fees charged by a towing company must be reasonable and not excessive.
Fees must be clearly and conspicuously disclosed to the vehicle operator before towing, if possible, using appropriate signage.
Recovery Location Requirements:
Towing companies cannot tow vehicles to locations that do not offer vehicle recovery within 24 hours of the tow.
Restrictions on Storage Fees:
Storage fees cannot be charged for days when the towing company is not open from at least 9:00 A.M. to 4:00 P.M.
If the towing company is not open 24 hours a day for vehicle recovery, storage fees cannot be charged until at least one business day has passed since the vehicle could first be recovered.
Payment Methods and Processing Fees:
Towing companies must accept debit cards, credit cards, and cash during operating hours, including at the time of towing.
Payment processing fees cannot exceed 2% of the owed amount unless it matches the actual cost of processing.
Attorney General's Authority:
The Attorney General can adopt rules to implement this section.
The Attorney General may assess civil penalties up to $5,000 per violation, with proceeds directed to the Civil Penalty and Forfeiture Fund.
The Attorney General can also issue cease and desist orders for violations.
Determination of Reasonableness:
The Attorney General will determine whether a fee is reasonable and not excessive by considering:
Whether the fee is proportional to the cost of service.
The reason for the fee.
Any other appropriate factors.
Unfair and Deceptive Trade Practices:
Violations of this section are classified as unfair and deceptive trade practices under Chapter 75 of the General Statutes.
Effective Date:
This section becomes effective on October 1, 2024.
Section 2: Appropriation of Funds
Funding Allocation:
From the 2024-2025 fiscal year, $10,000 is appropriated from the General Fund to the Department of Justice to implement this act and the requirements of G.S. 20-219.2.
Effective Date:
This section becomes effective on July 1, 2024.
Section 3: General Effectiveness
Except as otherwise provided, this act becomes effective when it becomes law.
Notable Aspects of the Bill
Consumer Protection:
The bill focuses on protecting consumers from predatory practices by ensuring transparency and fairness in towing fees and operations.
Operational Changes for Towing Companies:
Towing companies will need to update their signage, payment systems, and fee structures to comply with the new regulations.
Attorney General's Role:
The bill empowers the Attorney General with significant authority to enforce compliance, including the ability to impose civil penalties and issue cease and desist orders.
Potential Legal and Administrative Actions:
The classification of violations as unfair and deceptive trade practices provides a robust legal framework for addressing non-compliance and protecting consumers.
Funding for Implementation:
The appropriation of $10,000 to the Department of Justice indicates the state's commitment to enforcing the new regulations.
Potential Impact on Consumers and Towing Companies
Consumers:
Transparency and Fairness: Consumers will benefit from clearer disclosures of towing fees and the assurance that charges will not be excessive. This transparency helps prevent unexpected high costs associated with towing.
Protection from Unfair Practices: The bill ensures that consumers are not charged storage fees for days when they cannot access their vehicles, providing relief from unjust financial burdens.
Ease of Payment: By mandating that towing companies accept multiple forms of payment, consumers have more flexibility and convenience in settling towing charges.
Towing Companies:
Compliance Requirements: Towing companies will need to adjust their operations, including updating signage, fee structures, and payment systems, to comply with the new regulations.
Financial Impact: While some towing companies may incur initial costs to update their systems and processes, the clear guidelines help standardize practices across the industry.
Legal and Financial Risks: Companies that fail to comply with the new regulations risk significant penalties, including civil fines and legal action, highlighting the importance of adherence to the new rules.
Conclusion
House Bill 1037 represents a comprehensive effort to regulate towing practices in North Carolina, emphasizing consumer protection through reasonable fees, transparent practices, and robust enforcement mechanisms. The bill's focus on ending predatory towing practices aims to create a fairer and more transparent towing industry for vehicle owners in the state.