A new towing ordinance would require tow companies to accept credit card and checks, provide a complete receipt, post more signs clearly stating that cars can be towed if people walk off a parking into another business, and impose harsher penalties for towers who break the rules.

The new ordinance also mandates that companies have well-lit, secure and clearly marked lots and notify police when they tow a car.

Towing complaints have spiked in recent months. Chapel Hill Police Chief Chris Blue and Town Manager Roger Stancil met with tow truck operators and downtown business owners earlier this fall to discuss changes to the rules.

Some tow companies have asked for a $125 fee, saying the current $100 per tow fee doesn't cover their costs. They also oppose having to accept credit cards and checks because customers can stop payments, they said.

Council member Gene Pease said the council has gotten many more complaints this year, and "and the stories we got were terrible from a consumer point of view." Predatory towing hurts small businesses, and penalties for breaking the rules should be harsher, he said.

The new ordinance would fine companies $50 for a first offense, $100 for the second, $250 for the third and each time after that during a 12-month period. Each violation would be a misdemeanor, and after three violations a towing company could lose its business license.

"Fifty dollars for the first violation is too low," Pease said. "Three strikes, you're out, that's too lax. I think there should be some scorecard because it's a privilege to do business in Chapel Hill."

Mayor Pro Tem Jim Ward agreed.

"Everyone's an adult here. You don't need three tries in 365 days to get it right," he said. "Every year you don't go back to zero, if you can't play by the rules, you can't have the privilege of making money in this town."

Jeremy Edwards of George's Towing said towers need a higher fee to stay in business. He also defended his company's practice of monitoring lots with surveillance video, saying it helps police investigate complaints.

"The biggest deal that people have when they come out to our lot, is they tell us they didn't see a sign," he said. "Everywhere you look on all of our properties ... (we) have signs on them; all of them state walk-offs will be towed. People have to stand up and take responsibility for what they do."

There has been more towing downtown since the town closed Lot 5 and removed 105 spaces from central downtown, said Tom Stark, an attorney for George King of George's Towing. Towers contract with business owners who decide how often they want vehicles towed, he said.

"Business owners dictate the time frame and leeway of how they want people towed," he said. Some say check periodically, some say call in specific cars. It depends on the lot owner, he said.

Joy Presslar's car was towed from a downtown lot after she parked in what she thought was a handicapped space to pay her light bill. She came out to see her car being lifted on to the tow truck, but said the truck driver wouldn't let her get cash so she could pay him to unhook her car.

"There are predatory towers out there, and when you're handicapped and you have been towed from a handicapped spot ... you don't expect he's not going to allow you to try to get cash," she said. "It's hard for me to believe it's not a cash-motivated business."

About 13 tow companies operate downtown, Blue told the council last week. Their towing time frame - how long they wait before towing - ranges from 10 to 30 minutes, he said.

The town capped the tow fee at $100 in 2008.

"When we lost that percentage of amount of money coming in, we had to go up somewhere just to be able to stay in business," King said. "If you're cut in one spot, you have to adjust in others."