Towing company remains silent on overcharging

A towing company contracted by the city has not responded to the city’s ruling that it must refund more than $650,000 in overcharges to hundreds of Oahu-registered vehicle owners or have its three-year contract with the city terminated.

The Honolulu Department of Customer Services said it determined that Aiea-based All Island Wreckers Inc. — also doing business as All Island Towing — made “improper charges” for towing services, following an audit of 782 invoices issued between January 2023 and June 2023.

“These invoices reveal the mismanagement of the $900 contract fee. This fee is limited by contract and by law to situations that require excavation or removal of off-road vehicles, including ravines and creeks,” the city said in a written statement released Wednesday. “The company is only allowed to charge a reasonable amount in these cases, despite the contract provision that allows up to $900 for every 15 minutes of connection work after an initial 15-minute period.”

The city noted that “the contract clearly states that the Director of the Customer Services Department is the sole authority to determine reasonable amounts that may be charged for the removal of vehicles from hazardous off-road locations.”

“As a result, 782 invoices were denied and the registered owners of the vehicles are entitled to a refund for being improperly billed,” the city said. “The city’s towing company has also been given 10 calendar days from July 1, 2024 to correct the defect, including funding and developing a procedure to facilitate refunds.”

If the default is not corrected by July 11, the contract will be terminated, the city said.

“The city has taken the first step toward terminating its towing service contract, All Island Wreckers Inc., by issuing a notice of default,” the city’s statement read.

Kanoelani Perry, president of All Island Towing, could not immediately be reached for comment on the city’s allegations.

In the meantime, the city said it has sent letters to affected vehicle owners, “briefly explaining the situation, including the steps being taken to reimburse them for the undue charges and the need for them to provide proof of payment.”

According to the city, registered owners who paid a bill for a $900 towing fee between January 2023 and June 2023 are also encouraged to contact the department by emailing [email protected] or calling 808-768-4381.

Depending on the city, individual refunds are expected to range from $150 to $4,500 per refund.

The entity, which operates as All Island Wreckers Inc., has been under contract with the city since January 2023, according to Harold Nedd, a department spokesman.

He told the Honolulu Star-Advertiser that the city’s contract with All Island is based on production (the removal of abandoned or dilapidated vehicles found on public roads) rather than “a fixed amount.”

“However, $1.2 million has been budgeted for the company’s service,” Nedd said. “In addition, the contract provides for the company to assist the Honolulu Police Department in providing towing services resulting from traffic violations, traffic accidents and any other incidents deemed necessary for the department.”

Asked about the possibility of the city taking criminal action against the towing company, Nedd said “procurement rules were followed” in this contract.

“The issue is that fees were incorrectly applied to remove vehicles from off-road sites,” he said. “The city is currently focused on resolving the issue on behalf of the public by working with the company to develop a process to facilitate reimbursement for registered vehicle owners who were improperly charged.”

As for the city’s allegations against the company, All Towing has no formal appeal process or stated recourse to challenge the city’s allegations, according to Nedd.

“The towing company has until July 11 to correct the default, including funding and developing a procedure to facilitate reimbursements,” he said.

Nedd said the overcharging issue was first brought to the city’s attention during one of Mayor Rick Blangiardi’s community town hall meetings at Mililani High School on April 6, 2023, “when a complaint from a resident prompted the department to look into the matter further.”

Meanwhile, City Council President Tommy Waters weighed in on the matter. “Council supports the administration’s efforts to assess and clarify this issue for our residents who have been impacted,” Waters told the Star-Advertiser via email.

The city’s statement this week follows a similar warning letter sent to Perry’s towing company last year.

On June 28, 2023, City CSD Director Kimberly Hashiro said the city “has recently become aware of and is very concerned about complaints from registered motor vehicle owners that All Island is charging ‘non-statutory and difficult connection’ fees beyond what is permitted in” its contract with the city.

She noted that this type of charge involves “the use of multiple towing vehicles, recovery from dangerous locations such as off-road, ravines, creeks, shorelines and canals,” Hashiro wrote.

“The City reminds All Island that these fees are limited to these types of situations and should not be applied to other types of circumstances,” she wrote.

At the time, Hashiro’s letter said the city would investigate All Island’s application of the tax for the first six months of 2023, to all registered vehicle owners as well as to HPD.

“As you know, ‘the city will be the sole judge of approving or disapproving an off-road connection,'” the letter states.