WASHINGTON, March 9, 2001 -- A report by the General Accounting Office notes a rising tide of consumer complaints about interstate moving companies in the wake of the industry's deregulation and recommends that the Department of Transportation step up its consumer protection activities.
Minimal regulation of interstate movers "has created a vacuum that has allowed egregious carriers to flourish and take advantage of consumers," the GAO reported. "Carriers are aware that the Department does little to enforce the consumer protection regulations or provide much oversight."
When Congress eliminated the Interstate Commerce Commission (ICC) (See "Consumers Held Hostage"), it transferred consumer protection responsibilities for the moving industry to the Transportation Department but did not provide any additional funding. Transportation concedes that it has done little but blames the lack of funding and says highway safety is a higher priority.
The GAO report notes that expanding the states' powers to police interstate movers "has the potential to enhance protection for consumers" but, instead, recommends that the Transportation Department "strengthen its oversight of this industry."
The report was prepared for the House and Senate committees that has responsibility for transportation issues -- the Senate Committee on Commerce, Science and Transportation, chaired by Sen. John McCain (R.-Ariz.) and the House Subcommittee on Highways and Transit, chaired by Rep. Thomas Petri (R.-Wis.).
Among the shortcomings the GAO identified in the Transportation Department's enforcement efforts is a lack of data. The department estimates it receives 3,000 to 4,000 complaints per year about interstate movers but does not have the data organized in a useful manner.
However, the GAO found that complaints generally fall into several categories:
- misunderstandings about when services were to be paid for and what services were included in the original cost estimate;
- lost or damaged goods and disagreements over who is responsible, how much should be paid and when;
- an increase in the number of "unscrupulous carriers who had no regard for the rights of consumers or for the law."
It is the last category that is most troubling to consumer advocates, who say that consumers are effectively "held hostage" by unscrupulous movers.
In some instances, the GAO found, carriers provided unreasonably low estimates that they had no intention of honoring, while others extracted unreasonably high fees by imposing exorbitant charges for packing, boxes, tape, etc.
"Some carriers engaged in a practice called 'weight bumping,' in which they artificially inflated the weight of a shipment by including the weight of another household's goods when calculating the final bill," the GAO said.
In addition, the GAO said consumers have complained that, "even when they have won judgments against carriers in court, they have been unable to collect damages because the carrier has hidden its assets."
When Congress effectively deregulated interstate moving, it left consumers largely responsible for protecting themselves through such self-help mechanisms as neutral arbitration supposedly conducted by the Transportation Department.
Consumers are expected to select a reputable carrier, ensure they understand the contract and the remedies available to them. However, since the Transportation Department has conducted virtually no consumer education, many consumers are unfamiliar with the process and unaware of the options open to them.
The GAO also noted that when Congress assigned enforcement responsibilities to the Transportation Department, it directed the Department not to intervene in individual complaints, as the ICC had done.
Nine of 14 states surveyed by the GAO said they try to help individual consumers resolve complaints against interstate movers and sometimes prosecute moving companies for violating the state's consumer protection or fraud statutes. States' powers are limited, however, by legislation passed by Congress.