Depending on the tolling facility, the collection agency and the court; a $36.00 toll could balloon into a $17,000.00 bill including fees and penalties; or a $50.00 toll could become a $31,000.00 debt including administrative fees. In Virginia, one woman saw $256.00 in tolls explode into an $81,325.00 bill, including penalties and administrative fees. One Virginia man received a bill from a tolling facility totaling over $200,000.00 in combined tolls, fees and penalties.
It seems obvious that people that enjoy the benefit of a new road should have to pay for it; and people that cheat the system should have to pay a penalty. It also seems obvious that if a toll violator forces the tolling facility to spend additional resources trying to collect the toll, then the violator should have to reimburse the tolling facility for the extra time it spend tracking them down. The question is: should a corporation be able to collect administrative fees in excess of 400 times the value of the initial infraction? Keep in mind, that’s not a 400% increase, a 400% increase would take the toll from $36.00 to $144.00 with administrative fees. Oftentimes, the administrative fees and penalties range up to 180,000% of the original debt.
For a first toll violation, the law makers have seen fit to limit the maximum administrative fees and penalties that can be assessed to $2,200.00 – or 55,000% of the value of the initial infraction. But the benevolence of the law makers in Richmond only goes so far, after the first toll violation there are no limits to the fees – in some cases they can reach over 180,000% of the original violation. How does a $4.00 toll get to be over $2,000.00 in fees and penalties? First there are the administrative fees the toll facility is permitted to charge, the court assessed penalty can be up to $500.00 per violation when multiple violations are involved, then the law firm assigned to collect the debt can add attorney’s fees to the overall bill.
Where else does the law allow a private creditor (the majority of toll facilities in Virginia are owned or operated by private, for-profit companies) to increase a debt by up to 180,000% with interest and collection fees? I’m not aware of any area of law that allows for those types of collection fees.
Several years ago Virginia lawmakers determined that payday loan companies were taking advantage of Virginians by charging upwards of 800% interest on their loans. Consumer protection laws were enacted to lower interest rates on payday loans to 36% annually and to lower the maximum origination fee to $100.00. The same lawmakers that determined 800% interest on a payday loan was unconscionable have established a toll system that allows for 180,000% fees and penalties. It seems to me that Virginia lawmakers owe payday lenders an apology.
We should examine other areas of law to see if there is any precedent for these types of collection fees. Section 6.2-303 of the Virginia Code sets the maximum rate of interest on a debt at 12%. Of course there are exceptions, in many cases credit card companies can charge up to 36% interest. Federal law caps Credit card’s late fees and over-the-limit fees at $25.00 for the first time a customer is late. What about those folks that don’t pay their bills and find themselves in General District Court on a warrant-in-debt? Surely they must be paying 55,000% on their debt, right? Wrong, in General District Court, the default judgment rate for those that don’t pay their bills is only six percent.
There are both laws and industry standards for what a defendant should have to pay as a penalty for his conduct. Typically a Judge will allow a landlord a 5 to 10% penalty for late rent. Most courts will uphold a clause in contract that requires the looser of a case to pay up to 25% of the judgment amount in attorney’s fees to the winner of the case. State and federal statutes allow for treble damages to be assessed against the most egregious offenders. Keep in mind, treble damages, only assessed against the worst offenders, is only 300% of the actual damages. If the worst offenders have their damages capped at 300% by State and Federal law; why are toll violators paying 180,000% in damages to a for-profit corporation managing tolling facilities?
In Elizabeth River Crossings OPCO LLC v. Meeks the Virginia Supreme Court has determined that a toll is a “user fee” to be paid to a private company for the services provided– it is not a tax payable to a governmental unit. The law makers in Virginia have absolutely no precedent for allowing a private company to charge upwards of 180,000% in collection agency fees and costs. If any other private company charged these kinds collection fees, they would be shut down.
Proponents of allowing private companies to charge up to 180,000% fees on top of a toll violation may try to argue that some toll violations are payable to the Virginia Department of Transportation, and therefore more like a criminal fine (notwithstanding the fact that the Virginia code clearly calls it a “civil penalty”). To these folks I would point out the fine associated with a DUI. In Virginia, the maximum penalty for a DUI, which is a class 1 misdemeanor, is $2,500.00. In most cases, the Judge will assess a $250.00 fine for a DUI first offender. Of course, the DUI carries other penalties like potential jail time, loss of license and ignition interlock. Which is the greater threat to society; the guy that drinks a beer before getting behind the wheel of a car; or the guy that doesn’t pay a toll on his way to work? Should the toll cheat have to pay $2,200.00 for his first offense while the DUI pays $250.00? I wonder if the private corporation that is collecting the money has anything to do with this seeming disparity.
I am not advocating that folks that fail to pay their tolls should not have to pay penalties. I’m simply suggesting that the current penalty scheme is excessive when compared to other fees and penalties found in Virginia law.
By way of example, if we applied the most onerous standard of treble damages to a toll, then the $4.00 toll would leap to $12.00. If we then allowed the tolling facility to charge the same late fees as a credit card company the bill could leap all the way to $82.00. Let’s make the toll violator pay the same $250.00 fine as a DUI first time offender. That brings the bill $332.00. Now, just to make sure we have all bases covered, let’s tack on the standard 25% in attorney’s fees and jack the violators bill all the way up to $415.00. After applying every reasonable charge under the law, interest, penalties and fees comes up to $415.00 for violating a $4.00 toll. That increases the original debt by 10,000% as result of interest and fees!
Yet the law makers in Richmond don’t think 10,000% interest and collection fees is enough – they proposed to cap the administrative fees and penalties on a first offense at 55,000%.
Despite the legislature’s attack on Virginia commuters, there is still one small hope for the hard working people of Virginia that find themselves facing an overwhelming bill from one of Virginia’s tolling facilities. Depending on which tolling facility assessed the toll, the toll may be dischargeable in bankruptcy. If you have a toll you can’t pay, call one of our attorneys to see if we can help you.