Moving Scams
“Never doubt that a small group of thoughtful, committed citizens can change the world” - Margaret Mead, 1901 - 1978
The number one question MovingScam.com receives is “Can you recommend a good moving company?”. If the answer to that question was easy, then there wouldn’t be a reason for maintaining a web site called MovingScam.com (see this article for more information).
Currently the moving industry is overseen by the Federal Motor Carrier Safety Administration (FMCSA), part of the Federal Department of Transportation (DOT). At last count the FMCSA had only nine investigators to handle all of the thousands of complaints against moving companies each year. What does that mean for consumers? It means this:
Most complaints are overlooked and the consumer becomes a statistic and no action is ever taken against the moving company.
When Congress dissolved the ICC in 1995, they also removed the authority from the FMCSA to step in on a consumer’s behalf during a move. In other words, they can’t help you even if they want to.
If an investigation does occur, it takes months if not years for the FMCSA to, yes, get this… Fine the moving company.
The scam companies won’t pay the fine (and they don’t seem to get in trouble for not paying), and even if they did, the consumers don’t see a dime of their money back. The money from the fines goes to pay for highway improvements!
The History of MovingScam
I founded MovingScam.com in 2001 after I was scammed by America’s Best Movers and decided to fight back (see “The True Story”). Others joined me, and together, we’ve been helping consumers move for over five years.
At the core of the web site are message boards staffed around the clock by experienced volunteers who answer moving-related questions promptly and at no cost to the consumer. None of the volunteers receive any income from this activity.
MovingScam.com is dedicated to providing solid, impartial consumer education and to working for better consumer protections in the moving industry.
Tim Walker
Founder of MovingScam.com
There are in fact laws governing the moving industry, but the moving industry is unique in having special privileges and protections that no other industry could even imagine enjoying.
How did we get here? The interstate HHG moving industry was “price-deregulated” with the Household Goods Transportation Act of 1980. This Act allowed interstate movers to issue binding or fixed estimates for the first time. Until then, the moving industry was overseen by the ICC like a public utility (like phone and electricity services). There were only a handful of companies, known as the major van lines, that were allowed to transport household goods interstate, and they all charged according to their tariff — a schedule of rates and services — which had a built-in profit. ALL estimates were non-binding. Movers sold themselves on service, not price. The profit margin was very thin, but there was profit.
When the Household Good Transportation Act was passed in 1980, not only could companies now compete on price by giving binding estimates, but also there was a provision in the Act that new companies could enter the market. Regarding the “freedom” to give binding estimates, the majors didn’t want that. For a while some carriers just had a policy of sticking to non-binding estimates only. But because customers wanted the price certainty of binding estimates, those companies finally caved in and started issuing binding estimates too.
So how did the moving industry end up with a special governing body to oversee it in the first place? There is a federal statute enacted in 1906 called the Carmack Amendment. It was originally enacted in response to railroad barons who controlled the few railroads in existence and who were giving their friends favors in transportation rates and squeezing small farmers and everyone else. Back then, railroads were the major way of transporting goods across the still-developing country, and so the ICC was set up to, in effect, regulate the monopoly that was the railroads. The Carmack Amendment forbade “price discrimination”; that is, the railroad baron had to charge a set rate (contained in the railroad’s tariff), approved by the ICC, to all shippers. When roads and trucking later arose, the ICC started overseeing that, too. The major van lines and their agent system first got organized, and wrote their tariffs, in the 1930s.
OK, fast forward to 1980 and beyond. Because of the Household Goods Transportation Act of 1980, by the late 1990’s there were hundreds of interstate moving companies in existence, all with their own “interstate operating authority” granted to them by the U.S. Department of Transportation (DOT). (Compare that with the handful of companies who had interstate operating authority pre-1980.) Now, anyone can be an interstate mover. It used to take 5 years to get interstate operating authority. Now it takes 3 weeks.
Throw into this mix the fact that moving companies were now, theoretically, competing on price. The competition was so fierce, and the moving companies so numerous, that low-balling soon became a popular practice. Of course, low-balling doesn’t pay if the mover doesn’t practice hostage-taking (price-gouging during the move) as well, because the mover has to make money somehow. The need to low-ball to get moves, a direct consequence of the Household Transportation Act of 1980, is responsible for many of the abuses in the moving industry today. The ability of moving companies to get away with it, however, is caused by the Carmack Amendment.
So what’s the problem caused by the Carmack Amendment? Carmack purports to govern every single aspect of the shipping transaction. In the late 1990s, several courts handed down decisions interpreting Carmack as being so thorough and far-reaching that it “preempts” all other remedies that would otherwise be available to a plaintiff-shipper under state law. That is, suing for fraud under state consumer fraud/deceptive practices statutes was preempted. That means that an interstate mover can tell you: “I guarantee you that your move will cost only $2000,” while intending to hold your goods hostage for $4000 at destination.
Believe it or not, should he do that, according to these courts, you can only sue the mover under Carmack (not for state fraud, etc.), and Carmack, in turn, will allow you to ONLY get your $2000 overcharge back. Believe it or not, a mover’s “punishment” for stealing from you is to give back what he stole, and that’s only if he gets caught and someone forces him to give it back. Overall, a pretty sweet situation for moving companies, wouldn’t you say?
So that is what “deregulation” in interstate moving is about. It’s about PRICE deregulation and “ENTRY INTO THE MARKET” deregulation, coupled with the unfortunate decisions of certain courts in the late 1990s that moving companies can only get a slap on the wrist for even the worst abuses. The ICC’s disbandment in 1995 was just the last nail on the coffin — by then, the ICC couldn’t really oversee the industry anyway, since so many movers had entered the market and “tariffs” were now anachronisms.
In today’s environment of price competition, the current scamming will continue (and get worse) unless there are mechanisms for the consumer to force the mover to stick to his price bid. Those mechanisms are police intervention and punitive damages.
My advice is to fight back. Get the word out. Talk to your local police, and file complaints with the FMCSA and DOT. Get in touch with your local, state, and federal reps, and tell them that you want them to support consumer protections. Call your local media - newspapers, television stations. Get a web site of your own and get the word out. Whatever you can do to let other consumers know what’s going on in the moving industry right now.
To find out Black list of moving companies go to http://www.movingscam.com/blackList.shtml
Source:http://www.movingscam.com/