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5 July 2012

Towing fees case

Disputes Tribunal finds towing company's fee unreasonable.

Disputes Tribunal finds towing company's fee unreasonable.

A Wellington man forced to pay $250 to retrieve his car after it was towed for being illegally parked, fought back and won at the Disputes Tribunal.

The man, who doesn't want to be named, was parked near Wellington Railway Station on land owned by Kiwi Rail when he was towed by Harbour City Tow and Salvage. He didn't dispute he'd parked in the wrong place but he did dispute the amount.

Our consumer adviser Paul Doocey said while there was no set amount towies can charge, the courts had suggested they should only charge for expenses reasonably incurred in removing the vehicle.

The complainant phoned several companies and got quotes of around $90 for towing a vehicle across town. He believed that was a reasonable charge and wrote to the company requesting a $160 refund. When his request was declined, he lodged a claim in the tribunal.

Harbour City Tow and Salvage told the tribunal its fee was justified because it had to cover staff and other admin costs. The tribunal decision also reported the company claimed it paid Kiwi Rail $120 for each vehicle towed. But the company subsequently told us this wasn't the case and said its evidence was misquoted. Kiwi Rail confirmed to us it has a verbal agreement with Harbour City Tow and Salvage to remove cars but has neither asked for nor received any money from the company for this service.

In any event, the tribunal referee wasn't persuaded by Harbour City Tow and Salvage's arguments. The referee noted Wellington City Council towing fees were around $54, although they accepted Harbour City Tow and Salvage "would probably have incurred additional costs" for towing and storing the vehicle at its yard. Based on estimates of these costs, the referee reasoned $90 was an acceptable fee and ordered the company to refund $160.

Harbour City Tow and Salvage has paid up but told us it's applied for a rehearing on the basis its evidence was misquoted in the tribunal's written decision. Director Steve Okeby says the company has no plans to change its towing fee but would support the development of guidelines for the industry on fees and operating practices.

Kiwi Rail is planning to review its parking policy. As part of this, it says the towing contract is likely to be put out to tender.

This case isn't the first one where a consumer has successfully contested a towing fee. If you're charged an excessive fee, it's worth lodging a claim in the tribunal. We think it's high time the industry's practices were regulated.

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