By Lee Rood, Des Moines Register
What happened when one of the metro’s most maligned companies towed the wrong guy.
- Chris Costa’s car was towed and nearly sold by Crow Tow in Des Moines, Iowa, due to the state’s lenient towing laws.
- Iowa law allows vehicles towed from private property to be sold after just 10 days, with proceeds going to the towing company.
- Consumer advocates criticize Iowa’s towing laws as some of the weakest in the nation, offering little protection for vehicle owners.
First in an occasional series.
Nationwide, complaints to insurance companies about towing have ballooned almost 90% over the last three years.
But Chris Costa didn’t know that.
Towing wasn’t something Costa thought much about until March 30, when Crow’s Auto Service towed the white 2021 Honda CR-V he’d purchased for his son. It had been parked in a private lot on Bell Avenue in Des Moines.
Costa said he and his wife weren’t aware his son had parked in a prohibited spot and that he didn’t have the money at the time to retrieve the towed vehicle. They learned he was trying to come up with the cash without having to bother them.
Costa also didn’t know Crow Tow had sent a notice April 2 informing him, as the registered owner of the CR-V, that he owed $380 as of that day in towing and storage charges that would have to be paid before he could retrieve it.
Costa said he and his wife didn’t go to the post office to get Crow Tow’s certified letter, which required a signature, until a second attempt to deliver it at their West Des Moines home on April 14. The notice they received didn’t tell them it was from the towing company. Costa said that by the time they learned the CR-V had been towed and he called Crow Tow on April 16, the owner, Randy Crow, told him the vehicle, worth about $26,000, had been sold.
Abandoned cars can be a big problem for major cities, causing blight that affects entire neighborhoods. But even in cities such as Detroit, which currently has a mayor-initiated towing crackdown on abandoned cars, owners have 48 hours to move vehicles from public spaces, or two weeks from private property, before they are towed.
And if towed vehicles in Detroit go unretrieved, the state of Michigan saves the net proceeds from those eventually sold at auction to be distributed to the last known owner. The money goes into a lost-and-found fund, and if no owner emerges, it ends up listed on Michigan’s unclaimed property website, according to the Detroit Free Press.
But in Iowa, any vehicles that have remained illegally on public or private property for as little as 24 hours can be towed and immediately declared abandoned. Once a tow company sends the owner or lien holder a certified letter providing notification of the tow, Iowa law allows the vehicle to be auctioned or sold as scrap in as little as 10 days’ time.
Costa didn’t know that. And he didn’t know that many consumer advocates and attorneys across the country believe Iowa has one of the weakest laws — if not the weakest — in the country when it comes to protecting the rights of owners of towed cars.
He said when Crow told him he wasn’t entitled to any of the proceeds remaining from the CR-V’s auction after the tow and storage fees were paid, he couldn’t believe it.
Other than a house, a car is one of most people’s most valuable assets — their only way to get to work and make a living. Crow, Costa said, told him it’s legal for him to keep those proceeds after a private tow in Iowa.
Crow did not respond to an email and message to his office seeking comment.
Costa: ‘You and I are going to have a little bit of a problem’
There also apparently were things Crow didn’t know until Costa told him.
Costa is president of Knapp Properties, a multi-million real estate company that has rental properties — and towing contracts — throughout the Des Moines metro. Knapp Properties contracts with Crow Tow, especially at several apartment complexes downtown.
So when Crow told Costa April 16 that the CR-V — on his tow lot for just two weeks — was already on its way to a new owner, Costa said, he told him, “You and I are going to have a little bit of a problem.”
The sale also was a problem because, by law, the CR-V was supposed to be sold at a public auction, not via a private sale. Crow Tow’s advertising on Facebook did show a 2021 white Honda CR-V as being slated for an April 17 auction, but Costa said Crow had claimed the day before that the vehicle already had been sold.
Costa learned quickly that Iowa’s law gives tow companies wide berth to easily take the proceeds from auctions of vehicles towed from private lots. And although Crow Tow has won big contracts — including one June 17 with Polk County — to do law enforcement impounds, proceeds from private tow auctions have become a big part of the company’s business, with the number of vehicles sold at those auctions easily outnumbering those sold at impound auctions.
Costa also realized there’s inequity in Iowa’s current towing and abandoned vehicle law: Auction proceeds from vehicles impounded by law enforcement have to be held for 90 days to be given to their rightful owner or lien holder before they go to a state road-use fund. But that’s not the case for vehicles auctioned off after being towed from apartments, businesses and other private lots.
After tow companies recoup their tow charges, fees and auction costs, the private tow auction proceeds are gravy. And in cases like Costa’s vehicle, that gravy can amount to thousands of dollars.
Costa believes he had more leverage than most to get Crow’s attention: He reminded him that he heads a company with rental properties in Urbandale, West Des Moines, Pleasant Hill and Des Moines.
Not long after, Costa said, Crow called him to tell him the CR-V he’d said had already been sold was loaded on a truck and headed back to the Crow Tow lot, 1826 SE 21st St., for pickup.
And although Crow and his employees have insisted others need to pay cash to pay their costs and retrieve their vehicles, Costa’s wife was allowed to use a credit card — for a fee — to pay $1,540 to get the CR-V back.
An invoice the couple received showed a charge of $130.85 for a “premium” tow, $897 for 16 days of storage, $300 to cut a new key, a $56 administration fee and a $59.24 additional fee for use of the credit card.
The CR-V, Costa said, was returned April 18 — the day after Crow Tow advertised a white 2021 CR-V was going to be sold at the public auction.
Iowa: Ripe for predatory towing, short on reform
Craig Sepich, director of strategy, policy and government affairs for the National Insurance Crime Bureau, a group with 1,300 members in the insurance industry, has singled out Iowa as one of the states most in need of towing overhaul.
“Iowa is definitely on our list of states with very limited consumer protection,” Sepich said.
The way Iowa’s state law is currently written, it essentially allows companies to “steal vehicles in a roundabout way,” he said.
That’s because the state has such a short window between when a vehicle is towed and when it can be sold at auction. Those towed from private lots, which, like Costa’s vehicle, may be worth thousands more than their tow and storage fees.
In Iowa, legislators from disparate ends of a very divided political landscape have proposed measures in recent years that would attempt to better protect vehicle owners from practices that essentially allow companies to take their wheels with little opportunity for recourse.
Those measures have arisen after voluminous complaints, petitions, lawsuits and media coverage. But to date, they have gone nowhere — including a bill this year, Senate File 468, which Crow Tow’s lobbyists and another for a smaller towing company were the only people registered to lobby against it.
Sepich said despite a big push from credit unions, and support from auto dealers, rental car companies and consumer groups like AARP, the bill failed to advance further than a committee. Groups that typically lobby on law enforcement issues, like the Iowa Police Chiefs Association and Iowa Department of Public Safety, registered as undecided on the measure and sat on the sidelines.
Crow Tow’s primary lobbyist also happens to be a major donor to local officials and former campaign manager for new Polk County Supervisor Mark Holm.
In recent years, the Des Moines City Council has failed to take any action to initiate its own towing ordinance, despite repeated requests by disgruntled Crow Tow customers.
A Change.org petition that called Crow Tow predatory and garnered more than 7,700 signatures went nowhere.
The council for years has been extending a contract for Crow Tow to do impound work for the Des Moines Police Department, but will issue a request for new proposals later this year, according to James Remington, deputy finance director for the city of Des Moines.
Since his own encounter with Crow Tow, Costa has reached out to policymakers, residents and Watchdog about his family’s experience.
“I want to make Iowa’s law more consumer friendly,” he said. “I want citizens to have more of a chance to reclaim their vehicles.”
He said he’s come to believe the problems he experienced have more to do with a weak law than the business practices of the city’s largest towing service. But Costa believes Crow Tow absolutely treated him differently than most customers.
“What it’s helped me understand is that there’s a system for the haves and have nots,” he said. “For a relatively minor infraction, there are many, many people who aren’t in my position who would have lost a $26,000 car.”
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