The radical idea to combat Colorado's predatory towing problem

John Connolly wants to scrap the entire system and start over.

The president of the Towing & Recovery Professionals of Colorado, a trade group representing the state’s towing operators, remembers how his industry used to operate. Back in the 1970s and ’80s, property owners paid towers to remove abandoned vehicles from their lots — without charging consumers.

But in recent decades, “we allowed the fox in the henhouse,” state Rep. Andrew Boesenecker, a Fort Collins Democrat, said.

Apartment complexes, which used to pay to have cars removed, now get the service for free. Instead, tow carriers bill drivers hundreds of dollars per tow, causing serious financial strain for a wide swath of low-income residents. And the more cars these companies haul off to tow yards, the more money they rake in.

Colorado lawmakers in recent years have sought to address these financial incentives by passing a “Towing Bill of Rights” designed to better protect consumers from predatory tows. But despite these additional measures, the incentives to tow remain.

“How do you write laws to fix someone’s moral compass?” Connolly asked.

Though he vociferously objected to last year’s towing bill, Connolly has now flipped the script. He’s working with Boesenecker and other state lawmakers to write a bill that would completely reimagine the way towing is handled in Colorado. The idea: Remove the financial burden from consumers and go back to property owners paying for tows.

“The only way to fight this is to eliminate the money, the easy money,” Connolly said. “Towing wasn’t designed to patrol parking lots and try and nail people just to make a buck.”

The owners of one company in particular — Wyatts Towing, Colorado’s largest towing operator — have built a vertically integrated conglomerate on the backs of these financial carrots. They have ownership interests in parking management companies, a slew of other tow carriers, car dealerships and auction houses. These companies operate in each step of the parking and towing process, from the permit you buy from your apartment to the sale of your car at auction if you can’t afford the tow fees.

This arrangement, consumer advocates say, is ripe for abuse and may already break Colorado law.

Wyatts’ owners declined through an attorney to be interviewed for this story. Jason Dunn, the company’s lawyer, acknowledged the companies have overlapping ownership but pushed back on the argument that they are feeding business to one another in a nefarious way.

“They don’t need to search for tows,” Dunn said. “There’s almost an unlimited number of tows they could do if they had the manpower. They don’t need to search for extra business — the business is there.”

Wyatts’ vertical integration

When lawmakers, consumer advocates and even the state attorney general talk about the problems in Colorado towing, they’re implicitly — or sometimes explicitly — talking about one company: Wyatts Towing.

The towing giant has been the subject of 473 complaints to the Public Utilities Commission over the past year. The Better Business Bureau gives the company an F rating and includes an extensive consumer warning on the company’s business page.

Attorney General Phil Weiser took the unusual step last month of confirming an active investigation into Wyatts in the wake of a state senator being towed in north Denver. Lawmakers and state investigators, meanwhile, have taken aim at the company’s business practices, accusing Wyatts of perpetrating a predatory loan program that skirts state law.

Wyatts, though, doesn’t just tow cars. Its owners also run companies that deal in the parking, auction and auto sale realms.

The company’s vertical integration first came to light in a March 2022 report written by a group of consumer advocates.

The report’s authors, consisting of leaders from the Community Economic Defense Project and Towards Justice, laid out the extent to which Wyatts’ leaders had cornered the market.

The companies in Wyatts’ portfolio generally fall under two holding companies, business records show: 3T Holdings, a private equity search fund, and Towing Holdings. They’re associated with three individuals: Troy and Tony Porras, Wyatts’ owners, and Trevor Forbes, Wyatts’ CEO.

Towing Holdings has gobbled up much of the towing competition across the Front Range. Its portfolio includes Southwest Auto Tow, Capital Tow, Klaus Towing, Aaliyah’s Towing and Recovery, Boulder Valley Towing and Lone Star Towing, records show.

A host of apartment complexes in Colorado and other states use ParkM, a permitting company hired by complexes to manage residential parking lots. Troy Porras formed the company in 2018 and the business uses the same Englewood address as Wyatts, 3T Holdings and Towing Holdings.

One of the key provisions in the 2022 bill outlawed tow companies from authorizing their own tows in residential lots, except in cases of emergency. Instead, that authorization had to come from property owners or managers. The idea, lawmakers said, was to make sure management actually wanted a car towed.

But in myriad lots around Colorado, ParkM authorizes the tows. Then Wyatts trucks come and take the cars away.

“I don’t think it’s circumventing the law,” said Boesenecker, who spearheaded last year’s towing legislation. “It’s in direct violation of the law.”

Colorado law allows towing companies to take ownership of abandoned vehicles after 30 days. But it also allows towers to repossess cars when their owners can’t afford the fees to get them back.

The Wyatts owners also run businesses in this segment of the market.

Forbes in 2019 formed Peak Auto Auctions, a new and used car dealer that bills itself as the “largest online auction platform in the towing industry.” The business works with towing companies to sell their unclaimed and abandoned vehicles.

“Clear your lot and maximize your profits!” the auction’s website states.

Its articles of organization list the same Englewood address as the other businesses. The company’s website names Tony Porras as an auctioneer.

Cars Direct, meanwhile, was formed by Tony Porras in 2012. It claims to have invented the concept of shopping for cars online, serving millions of customers. The dealership is located on Wyatts’ Brighton Boulevard lot and its business name can be seen on the side of the Wyatts’ customer window in big, red lettering.

“We were all shocked and frankly horrified,” Zach Neumann, co-founder and CEO with the Community Economic Defense Project, said of his reaction to the shared ownership structures. “We had seen tremendous hardship and we thought it was random. We didn’t expect these companies were connected to or owned by the same people.”

Neumann called this arrangement “dangerous for consumers.”

“We’ve given a single profit-motivated company the ability to designate vehicles for tow, tow them and sell them when you don’t pay what you owe,” he said. “Strangely, it’s harder for the government, with democratic due process rules, to seize an asset and sell it than a private company. That doesn’t make a lot of sense to us.”

Dunn, Wyatts’ attorney, would not divulge the ownership stakes in the companies, calling that information “proprietary and confidential.” He said in an email that ParkM, Peak Auction Auctions and Cars Direct are “independently managed businesses with broad operations largely unrelated to Wyatts Towing.”

“The implication made by advocacy groups that these businesses are working together to take advantage of consumers is wholly incorrect,” Dunn said.

ParkM operates in 18 states and does not contract with Wyatts or any other tow company, he said. Property owners may choose to use both companies.

Peak Auto Auction lists vehicles for more than 275 separate sellers, Dunn said, including charities, salvage yards and tow companies. Cars Direct, he said, has not done business with Wyatts since 2020. That year, he said, vehicles bought from Wyatts represented less than 5% of Cars Direct’s sales.

“It’s my favorite car I’ve ever owned”

On July 19, around 2:30 a.m., Jimmy Stanley’s silver 2001 Mitsubishi Eclipse disappeared from his Lakewood apartment complex.

At first, he thought his car had been stolen. But police told him the Mitsubishi had been towed.

Stanley and his wife pay $75 a month to ParkM for permits to park three vehicles in the residential lot. Stanley’s permit for the Eclipse had expired the day prior, he said. Now his car, he learned, was sitting in Wyatts’ tow yard.

He told Wyatts he wanted his car back for $60 or 15% of his fees, a key portion of the 2022 towing law. A manager, he said, claimed not to know about any installment plan.

Over the next 30 days, Stanley said, he and his wife desperately tried to get their car back. They called, showed up at Wyatts’ lot and called some more. Employees told them they needed a title to the car or only a manager could process their request. Each time they were denied.

Stanley’s wife recently had lost her job, making him the sole breadwinner for the couple and their two children. They fell behind on rent, canceling streaming services to save cash.

“There was even a point in that month where if I could have gotten the car back, I didn’t have $60,” Stanley said.

The two-door Eclipse wasn’t just a mode of transportation. Stanley’s wife rode to school in that car every day until she was old enough to drive. Her father sold Stanley the car for $1,500 after he proposed.

When the couple wed, they drove away from the ceremony in the Mitsubishi with the words “just married” scrawled on the back, cans clanging off the bumper. When their daughter was born during COVID, Stanley and his wife brought her home from the hospital in the car.

“I loved that car,” he said. “It’s my favorite car I’ve ever owned.”

On Aug. 21, a Wyatts employee told Stanley his car had been sold by Peak Auto Auctions. (The company did not respond to inquiries about the sale.)

Stanley said his jaw dropped after learning that ParkM, Wyatts and Peak Auto Auctions have shared ownership.

“If the new laws weren’t meant to cover institutions like this,” he said, “I don’t know what they’re meant to cover.”

A radical proposal

It’s these stories that have prompted lawmakers to consider drastic changes to Colorado’s towing industry.

Earlier this month, the state’s Transportation Legislation Review Committee, which meets during the months before the state’s legislative session begins in January, drafted an interim committee bill designed to tackle the vertical integration issue.

The bill would prohibit a towing carrier from operating or controlling a business that manages parking lots, a motor vehicle dealer or auction house, or a business that loans money to obtain the release of a nonconsensually towed vehicle.

Vertical integration, the legislators wrote, “allows the business to avoid the checks and balances inherent in a consensual business transaction and creates incentives to make decisions that are not in the best interest of the consumer.”

The bill would also ban tow carriers from patrolling or monitoring properties to enforce parking restrictions and require companies to provide audited financial statements to the state.

It’s clear what the lawmakers are doing here, said Connolly, the towing association’s president: “They’re trying to tackle Wyatts.”

But this piecemeal legislation won’t work, he said. He likened Colorado’s towing rules to a barrel of water. Wyatts, in this metaphor, is holding a gun.

“They keep shooting holes in the barrel of water and legislators keep putting duck tape over the holes,” Connolly said. “If you can’t get the gun away from them, what do you do? Take the bucket of water away.”

On Tuesday, the towing association’s president pitched Boesenecker on a much more radical solution. Scrap the entire thing.

Connolly estimates that 90% of tows would not occur if property owners had to pay for them. He pointed to state Sen. Julie Gonzales’ case, in which the lawmaker was towed by Wyatts from a lot even though there were several empty spaces next to her car.

Under this new system, property owners would be incentivized to only tow in emergency situations, like when a fire lane or handicapped spot has been blocked. Drivers would work with property owners on fees, rather than the tow carriers.

“When the property owner is making the decisions, they’re not towing someone in seconds,” Connolly said.

Dunn, Wyatts’ attorney, said this new system would add layers of bureaucracy and make things much more complicated. Connolly acknowledged Wyatts — which is a member of the Towing & Recovery Professionals of Colorado — is “at odds with the official position of the towing industry.”

Boesenecker said he loves the idea. He and Connolly are working on new language that could replace or add to the drafted towing bill. The devil, as always, is in the details. And the unlikely tandem understands there will be opposition to upturning the applecart.

“John and his association recognize the moment we’re in and the opportunity to right the ship with best practices that benefit consumers,” the representative said.

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