Wyatts Towing flouting new Towing Bill of Rights, Colorado legislators say

On Aug. 10, a revamped set of regulations governing Colorado’s towing industry took effect — a sea change that lawmakers and consumer advocates promised would shift the balance of power back to vehicle owners and away from “predatory” companies looking to make a buck off your sedan.

HB22-1314, dubbed the “Towing Bill of Rights,” mandated towers give 24-hour notice in most cases before they take your car. No longer could a vehicle be towed for expired tags.

The big-ticket item: Tow yards would be required to hand back your vehicle if you pay 15% of the total fees upfront, not to exceed $60. Drivers would still owe the balance, but could pay it off over time — a crucial change for Coloradans living paycheck to paycheck and unable to stomach bills that could run into the hundreds of dollars.

But nine months after the law took effect, advocates and state legislators who sponsored the bill are sounding the alarm over what they call a blatant disregard by certain tow companies to follow the law.

The stakeholders called out one company in particular: Wyatts Towing, the state’s largest operator and one that is currently under investigation by the attorney general’s office. Lawmakers, in a letter to the state’s Public Utilities Commission last month, expressed outrage over Wyatts forcing consumers to agree to what the company calls a loan in order to get their vehicles back.

The efforts are an attempt to “retroactively justify and prospectively insulate their wanton and ongoing violation of Colorado law,” Rep. Naquetta Ricks, D-Aurora, Sen. Julie Gonzales, D-Denver, and former Rep. Edie Hooton, D-Boulder, wrote in the letter.

Trevor Frobes, Wyatts’ CEO, explained the loans as “defensive in nature” during a public hearing last week — an attempt, he said, to comply with consumer protection laws. He pledged that his company has “not collected a single cent of interest or fees from any consumers in Colorado.”

But documents and video reviewed by The Denver Post show the company does charge fees for people to retrieve their cars and rejects some drivers who apply for these loans due to insufficient documentation. Wyatts represents a concerning example of the extent to which towing operators are skirting the spirit of the new law, advocates say.

“It’s illegal and a direct violation of HB-1314,” Ricks said of the loans. “It’s unconscionable.”

“Exceptionally unfriendly to consumers”

The Public Utilities Commission, which regulates tow operators in Colorado, now has to consider revisions and updates to towing carrier rules based on the passage of the new law.

That’s where things have gotten contentious between the tow industry and consumer rights groups.

Much of the current fight — which has played out in front of an administrative law judge — comes down to a definition of terms. The new law, in various places, references “vehicle owners” as well as “authorized or interested persons.” The latter encompasses both owners and “authorized operators or authorized agent of the owner of the vehicle” — a much broader set of people.

The towing industry has argued in public rulemaking sessions that it should only be vehicle owners who can pick up the car under the 15% or $60 provision.

“If someone shows up and says, ‘This is my cousin’s uncle’s brother’s car,’ do we release it to them?” said Troy Porras, co-founder of Wyatts Towing, during a hearing Tuesday. “Who do we collect from, then?”

Consumer advocates, lawmakers and the attorney general’s office all expressed concern that this stricter definition of vehicle owners would significantly limit who would be allowed to reclaim their cars after a tow and what type of documentation would be needed to prove ownership. (These proposals are still being worked out by the commission and the judge, who take input from stakeholders. Final rules won’t be codified until at least next month).

“The current definitions are exceptionally unfriendly to consumers and do not appear to be consistent with the legislative intent embodied in HB22-1314,” Nathan Blake, deputy attorney general, wrote in a May 19 letter to the commission.

For many, producing a clean title and up-to-date registration for their vehicle isn’t an issue. But legions of low-income Coloradans may use cars on long-term loan from family or have purchased their vehicles through the informal economy, advocates say — which means they might not have paid fees to register the car or changed the title.

“If implemented, the proposed rules are likely to generate additional costs or loss of property for consumers, unfairly enrich towing carriers, and burden families with limited incomes,” the Colorado Poverty Law Project, which connects low-income individuals with free legal services, wrote to the commission.

“A series of running traps”

Consumer groups say they’re inundated by clients who claim tow operators are ignoring the law.

Enter the Wyatts loan application.

Forbes, during Tuesday’s hearing, said the company implemented the agreements because they didn’t want to break consumer lending laws. Wyatts does not collect finance charges or interest payments on these loans, he said, and nobody would be denied a loan.

The CEO, in an email to The Post on Wednesday, declined to answer specific questions about the terms of Wyatts’ loans.

“Our companies have complied with the provisions of HB22-1314 and will continue to do so,” he said.

But documents given to consumers and shared with The Post show Wyatts does charge fees and has denied loans to consumers.

In one loan agreement, the tow operator asked the applicant to list their employer, income, rent/mortgage and banking information.

The vehicle owner agreed to pay a $339.93 balance with Wyatts that included a $3.40 “finance charge,” the agreement states. Full repayment would be due a month from the start of the loan. (The company does not appear to actually be loaning consumers money; rather, vehicle owners are signing documents pledging to repay the full tow amount with these extra fees).

It appears, though, that Wyatts will express different loan terms to different people.

In a video reviewed by The Post, a consumer and her lawyer tried to get a vehicle out of Wyatts’ tow yard on Brighton Boulevard in April.

A tow yard employee, in the clip, told the woman and her attorney that she can only get her car back for $60 if she has an up-to-date registration or a bill of sale within the last 60 days.

“You have to be approved for a loan,” the Wyatts staffer said in the video.

The interest rate: 12% for one month, she said.

Legislators who wrote HB22-1314 say Wyatts’ loans are a clear violation of the law. Ricks called on the attorney general’s office and the PUC to take action.

“Wyatts has chosen to build a predatory loan program rather than follow the law,” Hooton, the former Boulder representative, said.

But it’s not just Wyatts and the loans, consumer groups say. Zach Neumann, co-founder and CEO at the Community Economic Defense Project, said 10 to 15 consumers have reached out for legal help over the past two weeks as they navigate getting their cars back from tow yards.

As soon as people mention the 15% or $60 provision, he said, “the walls go up.”

“It’s a series of running traps,” Neumann said during Tuesday’s hearing.

Multiple individuals told The Post that tow companies have refused to release their cars without certain documentation — and that it varied depending on the tow yard.