The California Department of Insurance has issued a public service announcement warning drivers in the state about increased scams involving tow truck companies targeting car accident victims.

The scams involve vehicles being held hostage for cash and have become prevalent in Southern California. The CDI’s Inland Empire Automobile Insurance Fraud Task Force has investigated multiple cases including one that resulted in charges against 16 Southern California residents.

The CDI’s PSA video shown below could be perceived as applying to every shop that charges certain towing or storage fees above what insurance companies will pay, or insurers may altogether refuse to pay them. However, there are oftentimes refusals to pay shops for legitimate fees.

A large-scale organized auto fraud ring allegedly conspired to create fraudulent insurance claims to collect more than $216,932. The same ring was previously charged for reporting vehicles stolen under false pretenses, which involved California Collision in San Bernardino County.

One of the scams in the most recent case involves a tow truck showing up immediately after a collision and offering to help the driver by towing their vehicle to a body shop. The body shop then forces the driver to pay a large amount of money, typically not covered by insurance, to get their vehicle back.

While the CDI public service announcement featured above is intended to address predatory scams, such as the tactics allegedly used in this fraud ring, the video has the potential to also suggest that consumers should be wary any time a repair business has fees above what insurance companies will pay, or even fees that insurance companies altogether refuse to cover. It’s important for readers to note that discrepancies between repair facility charges and the insurance companies can be common, and not always indicators of fraud.

“This type of scam is preying on drivers at their most vulnerable moments — immediately after an accident — when they should be focused on their safety and next steps, not fighting to get their vehicle back,” said Insurance Commissioner Ricardo Lara, in a press release. “Our department is committed to protecting Californians from fraud, and this PSA is an important step in ensuring drivers know the warning signs and how to protect themselves. If you suspect you’ve been targeted, report it immediately. Together, we can put an end to these predatory practices and hold bad actors accountable.”

The Inland Empire Automobile Insurance Task Force began this investigation in November 2022 after they found out California Highway Patrol (CHP) employee Rosa Isela Santistevan, 56, of Irvine, was unlawfully selling traffic collision report face pages. The pages contained personal information of people involved in collisions throughout Southern California.

The CDI says that after the task force served numerous search warrants they seized over 3,500 CHP traffic collision report face pages from the residence of Esmeralda Parga, 27, of Pomona, who the task force determined was connected to Santistevan through the organized ring’s ringleader, Andre Angelo Reyes, 37, of Corona.

The conspiracy began after Reyes befriended Santistevan and other CHP employees by donating to various CHP events and parties, according to the release.

“Santistevan printed and unlawfully sold thousands of traffic collision face pages to Reyes who would then provide the reports to E. Parga,” the CDI said in the release. “E. Parga would then contact the parties involved in the collision, pretending to be from their insurance company and coordinate having their vehicle towed to a repair center that they misrepresented as approved by the insurance company.

Unbeknownst to the victims, E. Parga did not represent the insurance company and was stealing the victims’ vehicles. Reyes and E. Parga would then dispatch tow trucks, whose drivers cooperated in the scheme, and would pick up the vehicles in Riverside County and tow them to Certified Auto in Buena Park, owned by Anthony Gomez, 36, of Jurupa Valley. Once the vehicles were at Certified Auto, Certified Auto would hold the vehicle hostage and demand cash payment from the insurance companies to have the vehicles released.”

During the numerous search warrants, evidence was also obtained that showed the alleged ring was engaged in other types of insurance fraud schemes, including collusive collisions.

The Riverside County District Attorney’s Office has also charged Reyes and Diana Villa Pineda, 34, of Corona with tax evasion of $136,408.

The Riverside County District Attorney’s Office is prosecuting this case.

Andrew Batenhorst, who is the manager of Pacific BMW Collision Center, in Southern California, told Repairer Driven News that this type of behavior has persisted for decades.

“I routinely deal with bandit tow companies holding cars hostage for thousands of dollars in fees just to get a car out,” he said. “Many of these operations have no intention of fixing vehicles, they are just seeking storage/towing fees. Customers are often the innocent victims and are unaware of what is happening.”

When asked if proposed regulations from the California Bureau of Automotive Repair (BAR) regarding storage fees are in response to the illegitimate actions, Batenhorst said he believes they are in direct response.

The passage of AB1263 last year gave BAR the authority to address storage fees. It also allows BAR to codify its guidance and unify existing laws on the subject. The changes also include teardown disclosures.

During the fourth workshop on the proposed changes, held Jan. 30, the main concerns were the language causing a cap on storage fees and losing days of storage revenue. Some speakers returned to voice concerns about the newest changes made after previous workshops.

Batenhorst calls the proposed regulations “overreach.”

“This needs to be fixed, but as many other collision industry leaders in California have said, the overreach to attempt to curb the problem is not the true root of the issue. In my opinion, it’s a heavy-handed response. The issue really is that tow yards are getting a BAR license for a body shop, and acting like a body shop even though they have no tooling, spray booth, et cetera. The sole purpose is to deceive and accrue storage charges.”

The CDI says drivers should be aware of the following red flags to make sure they don’t become a victim of this type of scam:

• • A tow truck shows up within minutes of the accident but you haven’t had time to call anyone yet.
  • A tow truck driver tells you which body shop your car is going to instead of working with you to identify where you want your vehicle to go.
  • A tow truck driver tells you someone will contact you by phone or ask you to sign documents.
  • A tow truck driver requests a rideshare for you.

The CDI also urges drivers to verify tow trucks with their insurance companies or wait for the CHP to verify the tow truck was dispatched by them. Also, do not sign any documents until you have talked to your insurance company.

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