by Todd Feurer, CBS Chicago web producerBy CBS 2 Chicago Staff

CHICAGO (CBS) — Seeking to crack down on predatory tow truck operators who prey on people who have been involved in traffic accidents, by hauling away their damaged vehicles and holding them hostage for outrageous fees, aldermen on Wednesday approved a plan to require towing companies to obtain a city license in order to respond to car crash scenes in Chicago.

The action came after years of reports by the CBS 2 Investigators exposing such predatory tow operators.

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Ald. Gilbert Villegas (36th) championed the ordinance, which would require those towing companies to pay a $250 fee per truck, as well as $250 or $750 per storage lot, depending on if they have a state license.

Villegas said he is seeking to crack down on so-called “rogue towers” who prey on people involved in traffic accidents by swooping in at crash scenes, falsely claiming they were sent by the police or the driver’s insurance company, and then charging people as much as $5,000 to get their car back after it’s been hauled away.

“This has been a public safety nightmare,” Villegas said Wednesday. “Whatever is currently in place is not working, and we are responsible for protecting our city.”

Tow companies already are required to be licensed by the state in Illinois, but Villegas said state law allows municipal governments to set up their own licensing system, and he said requiring a city license would give Chicago more direct oversight of towing companies.

In addition to requiring a city license for tow truck operators to respond to crash scenes, the ordinance would prohibit tow truck drivers from stopping at or near a crash site to solicit a tow. They could only respond to a traffic accident if called by the vehicle owner or operator, a police officer, or another government official.

The ordinance provides an exemption to the licensing requirement for tow truck drivers employed by the city or another government entity, and for companies that have city towing contracts. Towing operators that only haul unauthorized vehicles off of private property also would not be required to get a city license.

Applicants would have to provide details on whether anyone with ownership interest in a towing company or any of their drivers has any felony convictions in the past five years, or has been in custody or on parole for a felony conviction during that time. They would also have to inform the city if any owners have applied for, renewed, or obtained a state towing license in the past five years, or had their state license revoked in that time.

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Tow truck operators also would have to provide proof of insurance, a list of all their vehicles, and the location of all their storage lots.

The city would provide “registration emblems” to all licensed tow operators to display on all their tow trucks.

Tow companies also would be required to keep records of all stored vehicles, and any improperly towed vehicles must be released without charge.

Violators would face fines of $500 to $1,000 per offense. Tow truck operators who falsely claim to be a representative of law enforcement or government when they show up at a crash scene would face penalties of $10,000 to $20,000, as well as possible imprisonment.

Tow truck operators also could have their licenses suspended or revoked if they are caught at least three times illegally soliciting tow jobs at accident sites, or trying to impersonate a government official or insurance company employee.

Tim Lynch, senior director of government affairs for the National Insurance Crime Bureau, told aldermen last month that predatory tow companies are “very prevalent” in Chicago.

“Let’s face it, auto accidents are no fun. They’re a very stressful experience. I was in one 15 years ago, I never want to go through it again. Thank God I wasn’t hurt, and nobody else was hurt, but injuries happen,” he said at the time. “The last thing any of us want is for some third party, unsolicited, to come in and try to take advantage of us in that stressful situation, and that’s exactly what we’re seeing quite often here on the streets of Chicago.”

Lynch said other major cities – including Denver, Miami, and Los Angeles – already require city licenses for towing operators.

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Chicago Police Sgt. Keith Blair, commanding officer of the Major Auto Theft Investigative Unit, told aldermen at the same meeting that rogue tow operators will promise free rentals and other things to convince a driver to allow them to haul away their vehicle, only to end up holding it hostage for an exorbitant charge.

CBS 2 Chicago Staff