Tow company still overcharging motorists

The company that oversees all police-initiated automobile tows for the city is continuing to overcharge motorists even though the city says it is closely monitoring the contract because of previous problems with overcharging, according to testimony at a hearing Wednesday and towing invoices reviewed by the Star-Advertiser.

Leeward Auto Wreckers, which already was fined for overcharging customers in November and December, appears to be charging some motorists excessive fees, but in ways generally different from the first two months of the city contract, according to more than a dozen invoices from January and February examined by the newspaper.

The company appears to be charging more than allowed under the agreement, exceeding a $165 mandatory cap for combined hookup and mileage fees or by calculating the mileage based on distances to storage lots farther than the nearest one to the accident or pickup point, the Star-Advertiser analysis determined.

The overcharging was raised Wednesday at a City Council Budget Committee hearing at which members questioned the administration about why the switch to a new system for handling police-initiated tows got off to such a rough start.

Leeward Auto on Nov. 1 became the exclusive vendor, winning the towing contract over several bidders.

Before that, the city divided the island into about a dozen zones and awarded exclusive contracts for each one, resulting in inefficiencies, disparate treatment of motorists, numerous customer complaints — mainly stemming from one company — and other problems, according to city officials. They said the new system is more efficient and has not generated any complaints from the public.

Police Maj. Sean Naito told the committee his agency is satisfied with the contractor’s performance.

But once Leeward Auto took over, it immediately began charging hookup and mileage rates higher than what was permitted in the contract. The city, which didn’t become aware of the widespread contract violations until the Star-Advertiser uncovered them, in mid-December demanded that Leeward Auto stop overcharging and refund customers any excess payments.

The company blamed the problem on misinterpretation of city documents.

When city officials were asked Wednesday whether Leeward Auto is complying with the contract, they assured the committee that the company is abiding by the agreement and that the city is working to ensure that remains the case.

Yet Mary Jo Rivera of Ace Towing Services, which picks up towed vehicles from Leeward Auto on behalf of insurance companies and auction houses — and gets invoices for those cases — subsequently told the panel that she is continuing to see overcharges, some from within the past week or two. She provided copies of invoices to the Star-Advertiser.

"They found other ways to overcharge," Rivera told the committee. She noted, for instance, that the company sometimes charges a $15 off-hours hookup fee that pushes the combined hookup and mileage tab beyond the cap — something the contract doesn’t allow.

No one from Leeward Auto appeared at the hearing. Albert Ternora Jr., the company’s general manager, did not respond to a phone call and email from the Star-Advertiser seeking comment.

Paul Perry, owner of All Island Automotive Towing, in his testimony accused the city of failing to provide sufficient oversight.

"I think there’s a serious, serious lack of enforcement and negligence," he said.

All Island Automotive and Ace Towing were among the companies that had contracts with the city before the system changed.

Councilman Breene Harimoto said he was troubled by Wednesday’s testimony and questioned why the city didn’t closely monitor the contract from the first day, given the new system.

"Certainly, we could have done things differently at the onset of this contract," responded Randy Leong, an executive assistant with the Department of Customer Services, which provides oversight. "Unfortunately, that wasn’t done from Day 1."

But he said the city is now "really on top of" the overcharging issue.

Since early January, the city has been doing random checks of five to 10 Leeward Auto invoices each week to ensure the company has been billing motorists correctly, city officials said after Wednesday’s hearing.

None of the random checks have flagged any overcharging, they said.

But even though Leeward Auto is supposed to be providing all invoices to the city, the officials said they weren’t certain the company was doing that, rather than giving the city only a sampling of billing notices. They said they would look at improving that oversight.

The Star-Advertiser on Wednesday provided the city with about a dozen invoices from January and February, but officials were not able to complete a review by day’s end.

The apparent overcharges in those invoices mostly totaled between $15 and $50 per case, according to the Star-Advertiser review.

Jesse Broder Van Dyke, a city spokesman, said in an email to the newspaper that Leeward Auto has told the city that 25 percent to 30 percent of the overcharges from Nov. 1 through mid-December — the focus of the Star-Advertiser’s initial stories — have been refunded and the remaining refunds will be issued by the end of March.

Ann Kobayashi, who chairs the Budget Committee, said she expects the Council to continue inquiries about the towing contract, given all the problems. "This is not a done discussion," she said.