The Automobile Association says a proposed voluntary code of conduct for wheel clamping won't stop problems in the industry.
The Government announced on Tuesday that a code was being developed by industry members following recent publicity about the way wheel clampers operate.
Consumer Affairs Minister Simon Bridges said the Government would impose regulation if the code did not work.
AA spokesperson Mark Stockdale says unfair clamping, towing and excessive fines are a major problem and it receives hundreds, if not thousands, of complaints about this every year.
"A voluntary code of conduct is not going to solve the current situation.
"There are already rules and conduct that they could be adopting and they've chosen not to do that."
Mr Stockdale says the Government needs to make any code of conduct mandatory, as the industry has failed to self-regulate.
Labour Party transport spokesperson Phil Twyford says the minister should "stop pussyfooting around" and introduce clear rules.
Mr Bridges says he's confident self-regulation will work and the Government will step in again if it fails.