Navigating The Tow Lien Process


Navigating the Tow Lien Process is reprinted with permission from Tow Times magazine.


All towing operators conduct lien processing, but states have varying requirements and handle the process differently. “There’s not much uniformity in that area of the industry,” says towing attorney Michael McGovern of the McGovern Law Firm, Knoxville, TN. “You’re going to find wide variations in how the different states handle lien processing.”

Unclaimed vehicles are the bane of every towing operators existence – every tow company deals with them. “This is an area in which a uniform law would be fantastic,” explains McGovern.

But absent a uniform procedure, it’s important for tow company owners to handle vehicle liens correctly in order to clear their impound lots on a timely basis, especially those companies that operate in more than one state. Some states re- quire only a lien search, while others require a lien search and a notification letter, often certified, to be sent to the registered owner. To be sure, costs also vary by state. Lien processing software can be helpful to towing companies to keep things simple while reducing processing time.

Tow Times received replies from Jennifer Olinde, TowLien by TRAXERO program manager-customer support. TowLien by TRAXERO is now a part of TRAXERO. Here are the replies.

In what U.S. states do you offer towing lien processing services?

TowLien by TRAXERO: TowLien by TRAXERO is available to eligible towing and storage companies in all 50 states. Vehicle registration searches are currently offered in 32 states. USPS notification mailing options are offered in 17 states. Both offerings are continuing to expand for additional states.

Does each jurisdiction have a specific state law detailing the procedure for disposing of unclaimed vehicles impounded by towing companies at the direction of law enforcement agencies (LEA)?

TowLien by TRAXERO: The procedure for disposal of unclaimed vehicles varies by state and even by municipality within a state.

Of those states with such laws, what percentage require the following:
• certified mail notice of lien from the towing company to registered owner
• certified mail notice of lien from the towing company to lienholder(s)
• certified mail notice of lien from the LEA to registered owner
• certified mail notice of lien from the LEA to lienholder(s)
• public auction of the vehicle by the towing company
• public auction of the vehicle by the LEA
• advance newspaper advertisement of public auction
• other requirement

TowLien by TRAXERO: The states with a detailed procedure for disposing of unclaimed vehicles, whether by law enforcement, private property, owner, etc., all require a specific method of mailing after performing a registration search to obtain the owner/lienholder information. The mail types required by each state can vary between certified, return receipt, electronic return receipt, first class, and/or certificate of mailing. Additionally, most states that require a public auction require advanced notice of a newspaper advertisement prior to auction.

What are some of the most common similarities in the lien processing procedures from state to state?

TowLien by TRAXERO: The most common similarities in the lien processing procedure from state to state are: 1) vehicle registration search to obtain the most current interested party information, usually within a specific timeframe; 2) notify the interested party information by mail, within a specific timeframe.

What are the major differences in towing lien processing from state to state?

TowLien by TRAXERO: A major difference in lien processing from state to state is the timeline in which a search or notification is to be made. In addition, the application and/or documentation requirements can vary by state and municipality.


Navigating the Tow Lien Process


Are the certified lien notices mailed out by your company generic or are they customized for each individual state?

TowLien by TRAXERO: The lien notices that are mailed by TowLien by TRAXERO are a standardized statewide letter that meets that particular state’s individual requirements.

What are the advantages to a towing company using a commercial towing lien service versus handling the lien process in-house by access to a publicly-available motor vehicle database?

TowLien by TRAXERO: Utilizing TowLien by TRAXERO allows a towing company to save time and money with instant access to vehicle registration information and timely mailing of impound notification letters. TowLien by TRAXERO eliminates trips to the post office, so that you can avoid waiting in the long lines, which allows users to optimize their time and resources to focus on profits, not process. With digital dispatching platforms such as Dispatch Anywhere, TOPS, InTow, or Tracker – all offered by TRAXERO – TowLien by TRAXERO can reduce approximately 90% of processing costs starting with dispatch, collecting payment on released vehicles with TowPay, then to auction with Auction Simplified for the unclaimed abandoned vehicles.

What are the biggest mistakes you see towing companies make when handling lien processing in-house, i.e., without the assistance of a lien processing service?

TowLien by TRAXERO: One of the biggest challenges a towing company faces when handling lien processing is being compliant on timely notifications. TowLien by TRAXERO provides reminders to perform a search and send a letter within the state’s specific guidelines so tow operators remember to release a vehicle, preventing additional notices to be sent on already claimed vehicles. TowLien by TRAXERO can help streamline and automate the lien process for your business.

Do you provide assistance with public notices of auction sales (i.e., newspaper advertisements), the auction sales, or vehicle titling?

TowLien by TRAXERO: Tow Lien provides a template to be used to publish with your newspaper, a one-click ‘Print Packet’ option to print applicable documents (vehicle title forms, letter and USPS tracking) generated by TowLien by TRAXERO, and an integration piece for vehicles to be sent to Auction Simplified, if applicable.

What involvement, if any, do you have in a dispute or litigation that arises over the lien sale of a vehicle based on your processing?

TowLien by TRAXERO: TowLien by TRAXERO is confident in the compliance of the documents generated by TowLien and will collectively communicate with our customer, the towing company, and the appropriate agency in the event that an issue should arise, while also ensuring our customers’ privacy and confidentiality.

Do any states have different lien procedures when a vehicle is impounded from a source other than law enforcement, e.g., private property impoundments? If yes, how is the process different?

TowLien by TRAXERO: The lien procedure can vary by state and municipality, between police impounds and private property tows. The notification letter itself may be different in addition to the timeline notification that is required. Some states require multiple notices to be mailed. Private property tows in most states also have a time period in which law enforcement must be notified of a private property removal. TowLien by TRAXERO can assist with this law enforcement notification as well.

Do you think a national uniform method for processing towing liens would be beneficial? If so, describe what you believe would be the best system?

TowLien by TRAXERO: Due to the magnitude of all governmental and industry related entities that would need to be involved, spanning multiple states and municipalities each with their own complexities with being governed and regulated independently, such a unified method would be difficult and could result in unintentional effects. The most beneficial approach would be for the industry to familiarize itself with their state and municipal requirements, get involved and be proactive when fighting for what they believe is best for their location.

What is the cost of the services you provide for towing companies?

TowLien by TRAXERO: TowLien by TRAXERO is a pay-as- you-go, no contract platform. The service allows you to pre- fund your account and control your business spending. The cost for title searches, vehicle interested party information, and notification mailing of letters vary by state and compliance requirements.