Tow truck fraud travelling to Alberta 

The same fraudulent tow truck practices that exploded in Ontario have travelled west to Alberta, Équité Association investigators warn. 

“There have been reports of towing operators’ vehicles still [displaying] 416 area codes from Toronto, demonstrating that Ontario towers are bringing predatory strategies to Alberta,” the insurance fraud association writes. “Ontario was the testing ground for predatory tow practices, and trends show that Alberta is becoming the proving grounds.” 

There have been reports of tow truck operators taking advantage of drivers when their vehicle needs to be towed. Their fraud tactics include charging excessive fees and surcharges; charging fees for services that didn’t occur; refusing to release a vehicle to its owner; or falsely claiming to work with insurance companies. 

In some cases, these tow truck operators show up unannounced at the scene of an accident by monitoring policy scanners or patrolling busy areas. They then pressure drivers to use their business instead of their preferred choice.  

“What’s being taken advantage of is the disconnect between what might have been communicated to that consumer at the roadside, what the towing and storage actually looks like, and then how the insurance company is in the position of retroactively trying to manage the expense and the reasonableness of that transaction,” says Andy Dykstra, associate vice president of enterprise fraud at Co-operators. 

“To me, the concern would be that it becomes as out-of-hand as it has been and continues to be in [some Ontario markets], in the larger urban centres of Calgary” and Edmonton, he says. 

Insurers’ expense 

The Edmonton Police Service recently charged 11 owners from 10 local tow truck companies for fraudulent billing practices to insurance companies, following an investigation spanning March to May 2025. 

Police estimate these 10 companies fraudulently billed insurance companies for more than $120,000. 

The costs associated with tow truck fraud are stacking up for insurers. 

“Many insurers have resources dedicated to managing [billing abuse] in tow and storage transactions,” Dykstra says.  

But it’s an expensive issue that drives auto physical damage claims costs and is labour-intensive to manage, he says.  

Curbing it 

The Ontario government enacted provincial legislation effective Jan. 1, 2024, to crack down on fraudulent tow truck practices. Under the new regulations, tow and storage operators must be certified by the province and subject to a code of conduct. 

Ontario consumers can also verify tow and storage operators’ certificate status and maximum rates through a government portal, and submit complaints for those who violate the new regulation. 

The new legislation applies to all tow and storage operators in Ontario. Previously, only some municipalities regulated towing and storage through local bylaws, but they varied greatly, says the Insurance Bureau of Canada. 

But when Ontario regulated its industry, Équité Association reports tow companies began popping up in Alberta, which lacks the same regulation.

Since bylaws can differ from one municipality to the other, a harmonized yet still provincial approach to regulation might prove the most effective, Dykstra says. 

“There’s too much manipulation that can happen with patchwork [regulation],” he tells Canadian Underwriter. “On a high level, there needs to be some sort of overarching requirements at the provincial level as to what screening occurs before you license someone to be a tow operator,” and what and how much they can bill for services. 

Consumer considerations 

Consumer education is one additional method for preventing victims of predatory tow incidents.  

“Fraud through direct billing to an insurance company can be especially difficult for the policyholder to notice,” EPS detective Bryan Niehaus says in a May 21 statement.  

“It is always best to contact your insurance provider for a complete invoice of services after using a tow truck company. As always, motorists have the right to choose their tow truck provider and should not feel obligated to accept services at the scene of a collision.” 

But given the infrequency of drivers encountering situations where they may need a tow, the onus should be on tow operators to make available the consumer’s rights at the time of the accident, says Dykstra. “That almost needs to be part of the legislation; the tow operators that show up need to be able to inform you of your rights, or it needs to be embedded in a document that you’re presented with.”