The household goods moving industry has been invaded by a growing criminal element that preys on consumers who, as a result of ineffective governmental enforcement, are inadequately protected. The percentage of companies that prey on consumers is growing, and the effects of these practices can be devastating. In May 2004, the Senate found that the Federal government lacks the will and resources to adequately enforce consumer protection regulations against interstate moving companies that willfully violate Federal law.

It is unsurprising that inadequate Federal regulatory enforcement, combined with a uniquely vulnerable consumer group, has led to an increase in fraudulent and criminal activity, as well as an attendant rise in consumer complaints. There are two types of consumer complaints that deserve special attention: a) moving companies holding goods hostage, and b) moving companies resolving claims for loss or damage in bad faith, both of which are contrary to Federal law and may subject moving companies to fines. However, despite the threat of potential fines, an increasing number of moving companies prey upon consumers by engaging in fraudulent and criminal practices, because potential fines have a questionable deterrent effect in the absence of adequate enforcement.

Private consumers are uniquely vulnerable to the fraudulent and criminal practices of household goods movers because they entrust virtually all of their worldly possessions to the mover, and because of their lack of familiarity with the moving industry and its pitfalls due to using moving companies so infrequently.

A U.S. Gen. Accounting Office Consumer Protection Report indicated that because regulating the household goods moving industry was a relatively low priority for the Federal Motor Carrier Safety Administration (FMCSA), the entire agency had devoted only 5 of 760 full-time people to the task. With such a small number of staff devoted to household goods moving issues, it is not surprising that the FMCSA could not adequately enforce consumer protection regulations.

Since enforcement of regulation has been the problem, and not a dearth of regulation, the disproportionately few number of staff allocated to household goods moving issues undermines what might otherwise be a comprehensive and effective regulatory framework. Federal law provides extensive rules governing how carriers must handle consumer claims for loss, damage, injury, or delay to property transported. Likewise, for years the Federal regulatory scheme has prohibited the practice of holding goods hostage to extort inflated payments from consumers.

The plaintiffs in Roberts v. North American Van Lines, Inc.
alleged that their moving company engaged in classic bait and switch schemes and then held their goods hostage in an attempt to secure an inflated price. The first plaintiff was given a quote of $3,028.50 based upon the estimated weight of the shipment. The goods were later reweighed without notice and the movers raised her charges to $6,172.53 while threatening to place the goods in storage if she did not pay the full inflated amount before delivery, which she did to avoid incurring unloading and storage fees.

Rini v. United Van Lines, Inc. exposes another consumer vulnerability: lack of recourse when moving companies attempt to frustrate legitimate loss or damage claims by dealing with consumers in bad faith. In Rini, the plaintiff's moving company lost some of her valuable artwork and during a period of time spanning more than two years, provided numerous excuses for not paying her claim until finally the plaintiff brought suit and prevailed on state law claims for misrepresentation and unfair and deceptive practices. The trial court, in awarding the plaintiff, referred to the defendant's behavior in the claims process as "a sham designed to wear plaintiff down and force her to abandon a legitimate claim." Unfortunately, the judgments were reversed on appeal and the moving company was not held accountable for its fraudulent and deceptive practices. In considering the plaintiff's situation, the First Circuit Court of Appeals found that "It may be that Congress' enforcement scheme does not provide a sufficient deterrent to the type of conduct defendants employed in this case."

Although the FMCSA passed regulations in 2003 that would provide some additional protection for consumers, those regulations did not adequately address the need for improved enforcement. In 2004, the FMCSA received over 16,000 complaints about household goods movers. Before that, it had been approximately 3,000 to 4,000 complaints each year. This nearly exponential increase in complaints occurred during the four years following the study that found the need for significant improvements. This increase happened despite the educational and enforcement efforts of the FMCSA and despite governmental actions taken against household goods moving companies. Such an increase in fraudulent activity is not surprising given the limited resources the Federal government can allocate to the household goods moving industry. Fraud and abuse of consumers has increased, not because federal criminal fines and imprisonment are insufficient to deter, but because federal resources are just too limited.

In the last five years, the DOT Office of the Inspector General has investigated allegations of fraud involving over twenty-five household goods moving companies. The increase in consumer complaints of fraud and abuse clearly indicate that the Federal government's efforts have not sufficiently deterred dishonest moving companies bent on defrauding consumers.