Question: In 2023 the Office of Consumer Protection was looking into alleged overcharges by a vehicle-towing company that has/had a contract with the city. Did anything ever come of that?
Answer: Yes, the city says the tow company breached its contract and owes refunds to hundreds of vehicle owners. The city has contacted some owners it says were improperly charged, but there may be more and the city wants to hear from them. We’ll explain how to seek a refund, but first some context: When you asked this question in March, we emailed the OCP, a state office, which deferred to the city, which also was investigating complaints about All Island Wreckers Inc. Complaints centered on the tow company charging some customers $900 per 15 minutes, after an initial 15-minute period at a lower rate. OCP deferred to the city because All Island relied on its city contract to justify the fees; the contract allowed “Non-Statutory Difficult Hook Up” fees in some situations, such as when it took multiple tow vehicles to remove a wrecked car from a stream. We followed up with the city, but it didn’t have an update in March. It does now, saying that an audit of the tow company’s invoices found that the company repeatedly misapplied and/or overcharged NSDHU fees, amounting to a breach of contract that warrants immediate default. Honolulu’s Department of Budget and Fiscal Services mailed the tow company a “Notice of Default and Demand for Cure” on Monday; the Department of Customer Services emailed it a list of disapproved invoices the same day; and on Tuesday CSD began notifying affected vehicle owners in letters that say “CSD is attempting to work with All Island to ensure that you are issued a refund for this improper charge.”
Kimberly Hashiro, director of the Department of Customer Services, answered Kokua Line’s questions on this topic:
Q: What is the city telling All Island?
A: “The city is telling its towing contractor that it has defaulted on its towing service contract for inappropriate charges for towing services, and has 10 calendar days (or until July 11, 2024) to correct the default, including funding and developing a procedure to facilitate the refunds.”
Q: How many vehicle owners are affected?
A: “Our review of invoices from January 2023 to June 2023 shows that more than 780 registered owners were inappropriately charged for the Non-Statutory and Difficult Hook Up.”
Q: Will all of them get refunds?
A: “An estimated 99% of the registered owners who paid an invoice for a $900 towing fee between January 2023 and June 2023 will get refunds. Only a few others are under review. We need more information to understand the basis for the fees charged.”
Q: What was the total charged in these extra fees?
A: “The total charge in those extra fees exceeds $650,000.”
Q: What is the range of individual refunds?
A: “The range of the individual refunds is from $150 to $4,500 per refund.”
Q: How will people find out they are eligible for refunds?
A: “The Department of Customer Services sent notices on Tuesday, July 2, to all of the registered owners (known to be) eligible for refunds. The department has requested additional invoices from July 2023 to present and will be conducting a further audit. Anyone who was improperly charged during this time frame will be notified once this further audit is completed.”
Q: What is the process for obtaining a refund?
A: “We have instructed the towing contractor to put a process in place to help facilitate the refunds. In the meantime, registered owners (or insurance companies) who paid an invoice for a $900 towing fee between January 2023 and June 2023 are encouraged to contact the Department of Customer Services now by sending an email to csd@honolulu.gov, or calling 808-768-4381. When contacting our department, registered owners should provide a name, phone number, email and license plate number.”
Q: Is the city hopeful that All Island Wreckers will agree to this plan? Have you gotten any indications from them that they will provide the refunds, or must you just wait until July 11 to see how they respond?
A: “We haven’t heard back from them yet. We are going to wait to see how they will respond. What we want to do is work with them. We want to resolve this on the behalf of the public.”
Kokua Line called and emailed All Island Wreckers on Tuesday morning seeking the company’s response but did not hear back by deadline.
Q: Looking to the future, what company will have the towing contract with the city?
A: “The details are being worked on currently. But our goal is to take an approach that makes and ensures cost-effective as well as efficient delivery of towing services to the public.”
Q: Will this type of extra charge be allowed?
A: “The extra towing charge must be a reasonable amount for removing vehicles from off-road locations.”
Write to Kokua Line at Honolulu Star-Advertiser, 500 Ala Moana Blvd., Suite 7-500, Honolulu, HI 96813; call 808-529-4773; or email kokualine@staradvertiser.com.
