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entitled 'Consumer Protection: Some Improvements in Federal Oversight 
of Household Goods Moving Industry Since 2001, but More Action Needed 
to Better Protect Individual Consumers' which was released on May 17, 
2007. 

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Report to Congressional Committees: 

United States Government Accountability Office: 

GAO: 

May 2007: 

Consumer Protection: 

Some Improvements in Federal Oversight of Household Goods Moving 
Industry Since 2001, but More Action Needed to Better Protect 
Individual Consumers: 

GAO-07-586: 

GAO Highlights: 

Highlights of GAO-07-586, a report to congressional committees 

Why GAO Did This Study: 

The Department of Transportation’s (DOT) Federal Motor Carrier Safety 
Administration (FMCSA) is responsible for protecting consumers involved 
in interstate household goods moves by issuing regulations and 
conducting oversight and enforcement actions. The Safe, Accountable, 
Flexible, Efficient Transportation Equity Act–-A Legacy for Users 
(SAFETEA-LU), enacted in 2005, included provisions to enhance consumer 
protections for household goods moves and mandated that GAO study (1) 
the protections federal laws and regulations provide to consumers of 
interstate household goods moves and the effectiveness of federal 
enforcement efforts, (2) the protections states provide to consumers of 
intrastate household goods moves and how they have affected consumers 
and movers, and (3) the potential effects on both consumers and 
interstate movers if movers were subject to state consumer protection 
laws. To address these issues, GAO analyzed federal and state 
legislation, federal complaint and enforcement data, and interviewed 
federal and state officials. 

What GAO Found: 

Federal laws and regulations require FMCSA to provide protections for 
the 1.6 million consumers who annually hire interstate movers, but 
FMCSA lacks the information to determine the effectiveness of its 
efforts. SAFETEA-LU increased licensing requirements for interstate 
movers, enhanced existing federal authority and expanded it to allow 
states to bring actions against interstate movers in federal and state 
courts, although there is no indication that any state has yet 
exercised this authority. However, states are still prevented from 
regulating interstate household goods movers. FMCSA took several steps 
to improve oversight of household goods movers, including increasing 
compliance reviews from 13 in 2001 to 562 in 2006, increasing 
enforcement actions from 5 in 2001 to 72 in 2006, expanding consumer 
education efforts, and establishing a complaint database. However, 
FMCSA is precluded from resolving individual complaints and, as a 
regulatory agency, lacks authority to force movers to relinquish goods 
held illegally. Also, FMCSA has not established a strategy to measure 
the overall effectiveness of its household goods enforcement efforts. 

All six states we visited have laws that protect consumers from false 
and deceptive trade practices and allow consumers to receive 
compensation from intrastate movers for amounts greater than the cost 
of the actual lost or damaged goods. For example, consumers in five of 
the states we visited can receive a monetary award up to three times 
the amount of the actual damages. Additionally, all six states have 
laws governing intrastate movers but vary in their licensing, 
oversight, and enforcement requirements. For example, four of the six 
states GAO visited have licensing requirements such as background 
checks and evidence of financial fitness, in addition to the 
requirement that applicants provide proof of insurance; and two states 
have changed their laws to allow local law enforcement authorities to 
aid consumers whose goods are held hostage. State and moving industry 
officials told GAO that these actions had a positive effect on both 
consumers and legitimate movers. 

The application of state consumer protection laws to interstate movers 
has the potential to enhance protections for consumers, but may not be 
helpful in addressing the problem of movers who operate illegally and 
may increase costs. If state consumer protections were applied to 
interstate movers, consumers would have the opportunity to resolve 
their disputes in state court. However, industry officials GAO 
contacted told us illegitimate movers would likely fail to appear in 
court and may not comply with any judgments. Moving industry officials 
strongly oppose the application of state consumer protection laws to 
interstate movers, pointing out such action may increase their costs, 
which could be passed on to consumers. However, some state officials we 
interviewed did not think that legitimate movers’ costs would increase 
due to regulation. 

What GAO Recommends: 

GAO recommends DOT develop a strategy with performance goals and 
measures for its oversight and enforcement of the industry and take 
some additional actions. DOT agreed to consider the recommendations. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-586]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact JayEtta Hecker at (202) 
512-2834 or heckerj@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Federal Legislation and FMCSA's Enforcement Efforts Have Enhanced 
Protections for Consumers of Interstate Moves, but the Effectiveness of 
These Efforts Remains Unclear: 

The States We Visited Provide Protections to Consumers of Intrastate 
Moves but Vary in Their Industry Oversight and Enforcement: 

Applying State Consumer Protection Laws to Interstate Movers May Aid 
Consumers and Could Increase Movers' Costs, but Such Action Is Unlikely 
to Allow States to Regulate Rates of Interstate Movers: 

Conclusions: 

Recommendations: 

Agency Comments: 

Appendix I:Objectives, Scope, and Methodology: 

Organizations Contacted: 

Appendix II: Consumers of Airline Travel and Household Goods Moves 
Overseas Have Added Protections: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: FMCSA Compliance Reviews and Enforcement Actions against 
Interstate Movers, Fiscal Years 2001 through 2006: 

Table 2: Highlights of Recovery Provisions in Consumer Protection Laws 
of the Six States We Visited: 

Table 3 : Highlights of Selected State Laws Governing Intrastate 
Household Goods Movers: 

Table 4: Selected State Licensing Requirements for Intrastate Household 
Goods Movers: 

Table 5: Selected licensing requirements of FMCSA, FMC, and OAA: 

Abbreviations: 

BBB: Better Business Bureau: 
DMV: Department of Motor Vehicles: 
DOT: Department of Transportation: 
FMC: Federal Maritime Commission:
FMCSA: Federal Motor Carrier Safety Administration: 
FTC: Federal Trade Commission: 
GPRA: Government Performance and Results Act of 1993: 
HHGCC: Household Goods Consumer Complaint: 
ICC: Interstate Commerce Commission: 
OAA: Office of Aviation Analysis: 
OAEP: Office of Aviation Enforcement and Proceedings: 
SAFETEA-LU: The Safe, Accountable, Flexible, Efficient, Transportation 
Equity Act--A Legacy for Users: 
STB: Surface Transportation Board: 

United States Government Accountability Office: 
Washington, DC 20548: 

May 16, 2007: 

The Honorable Daniel K. Inouye: 
Chairman: 
The Honorable Ted Stevens: 
Vice Chairman: 
Committee on Commerce, Science and Transportation: 
United States Senate: 

The Honorable James L. Oberstar: 
Chairman: 
The Honorable John L. Mica: 
Ranking Republican Member: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

The Department of Transportation (DOT) has responsibility for 
protecting consumers involved in interstate household goods moves, 
which includes issuing regulations, conducting oversight activities, 
and taking enforcement actions. Within DOT, the Federal Motor Carrier 
Safety Administration (FMCSA) carries out these duties. In 2001, we 
reported that DOT had not taken steps to understand the nature and 
extent of problems in the household goods moving industry nor had it 
made more than minimal efforts to provide information to consumers that 
would assist them in making more informed choices. At that time, DOT 
had few resources with which to oversee the industry, creating a vacuum 
in which unscrupulous movers could flourish.[Footnote 1] Consumers 
complained about a broad range of problems, including lost and damaged 
goods for which the carrier refused to compensate them, and goods held 
"hostage" until the consumer paid fees greatly in excess of the agreed- 
upon estimate. We recommended, among other things, that DOT examine 
whether legislative changes were needed to supplement its efforts, 
including legislative authorization for the states to enforce federal 
statutes and regulations. 

The Safe, Accountable, Flexible, Efficient Transportation Equity Act - 
A Legacy for Users (SAFETEA-LU),[Footnote 2] the federal surface 
transportation reauthorization legislation passed in 2005, included 
provisions that increase the amount of consumer protection provided 
under federal law. In addition, SAFETEA-LU gave state authorities the 
capability to enforce these federal consumer protection laws and 
regulations against interstate movers. This legislation also mandated 
that we study the current consumer protections that DOT provides and 
the possible effects on consumers and movers involved in interstate 
moving if state attorneys general were allowed to apply state consumer 
protection laws to such moves. Accordingly, this report discusses the 
following: 

* The protections that federal laws and regulations provide to 
consumers of interstate household goods moves and the extent to which 
information is available on the effectiveness of current enforcement 
efforts at the federal level; 

* The protections that states provide to consumers of intrastate 
household goods moves and how they have affected consumers and 
intrastate household goods movers; and: 

* The potential effects on both consumers and interstate movers of 
household goods if interstate movers were subject to state consumer 
protection laws, including the potential for states to regulate the 
rates of interstate household goods movers. 

Lastly, in response to the mandate's request that we compare household 
goods consumer protections to consumer protections for other modes of 
transportation, we are providing information on how consumer 
protections provided by federal regulation of interstate household 
goods movers compare with consumer protections provided by federal 
regulation of airline travel and the shipment of household goods 
overseas (see app. II). 

Our overall approach to addressing these topics was to (1) analyze 
federal and state laws and regulations pertaining to consumer 
protections for the household goods moving industry; (2) interview a 
wide variety of representatives and review pertinent documentation from 
federal and state governments, the household goods moving industry, law 
enforcement and consumer groups, and an alternative dispute resolution 
organization to understand and assess FMCSA's oversight and enforcement 
efforts; and (3) conduct site visits to six states to review their 
consumer protection policies and procedures and obtain their views on 
the authorities granted to them under SAFETEA-LU and the potential 
effects of applying state consumer protection laws to interstate 
household goods movers. The six states--California, Florida, Georgia, 
New York, Texas, and Virginia--were selected to include a cross-section 
of characteristics, including states that have had problems with 
interstate household goods movers, according to motor carrier 
administration and industry officials, and/or had enacted recent 
legislative changes to address problems with household goods movers. We 
performed our work from February 2006 through May 2007 in accordance 
with generally accepted government auditing standards. See appendix I 
for further details about our scope and methodology. 

Results in Brief: 

Federal laws and regulations require FMCSA to provide some protections 
for the approximately 1.6 million consumers who annually hire 
interstate movers, but FMCSA lacks the information to determine the 
effectiveness of many of its enforcement and oversight efforts and 
lacks authority to force movers to relinquish goods to their owners, a 
situation referred to as holding goods hostage. Both the increased 
oversight and enforcement provided by the SAFETEA-LU legislation in 
2005 and by FMCSA since our 2001 report[Footnote 3] have expanded 
protections for consumers hiring interstate household goods movers. The 
protections provided by SAFETEA-LU include increased licensing and 
registration requirements for movers and authorization of state 
governments to enforce federal law and bring action against interstate 
movers in federal or state court.[Footnote 4] However, it is too soon 
to determine the effectiveness of the authority given to the states 
because it was restricted by amendment to federal court until September 
2006, and to date, it appears no state has yet exercised it. SAFETEA-LU 
also mandated that DOT develop and implement an outreach plan to 
enhance cooperation and enforcement of federal laws between federal and 
state law enforcement and consumer protections authorities. Thus far, 
no plan has yet been developed, although FMCSA officials have hired a 
contractor to begin developing the plan. With regard to oversight since 
2001, FMCSA has increased the number of inspectors who conduct 
household goods compliance reviews from 2 to 8 while training almost 
100 inspectors who conduct truck safety reviews to also carry out 
inspections of household goods movers. FMCSA has also increased the 
number of compliance reviews conducted, from 13 in 2001 to 562 in 2006, 
and increased the number of enforcement actions taken from 5 to 72. 
FMCSA officials told us that they believe this current level of 
oversight and enforcement is adequate within the resources available, 
pointing out that of the approximately 1.6 million interstate moves 
handled annually by interstate movers, only about 3,000 result in 
complaints made to FMCSA. FMCSA has also expanded its consumer 
education efforts by launching a consumer education campaign and 
developing a Web site dedicated to preventing moving fraud, which 
provides guidance on how to have a successful move and avoid falling 
victim to dishonest movers. FMCSA has also developed a "consumer 
outreach and education logic model" that the agency plans to use to 
determine the effectiveness of their outreach and education efforts. 
This model outlines the program areas in which FMCSA is planning to 
develop metrics for evaluating the effectiveness of its outreach and 
education activities. FMCSA officials expect to complete a report 
assessing their consumer outreach and education efforts, including this 
model, by January, 2008. In addition, FMCSA has established a complaint 
hotline, compiled a complaint database, and is in the process of making 
complaint information about specific movers available to the public. 
However, FMCSA officials told us that if consumers, whose goods are 
held hostage, call FMCSA for help, FMCSA has no authority to force the 
mover to release the goods. FMCSA officials also told us they are 
precluded from resolving individual complaints,[Footnote 5] thereby 
leaving consumers with arbitration as the main option to resolve 
disputes with interstate movers about loss and damage. In addition, 
other than their logic model for evaluating consumer education and 
outreach activities, FMCSA lacks information to determine the 
effectiveness of any of its oversight and enforcement efforts, 
including arbitration; and its draft strategic plan for 2006 through 
2011[Footnote 6] contains very little information about FMCSA's efforts 
in providing oversight and enforcement of the household goods industry. 

All six states we visited have consumer protection laws that safeguard 
consumers of intrastate household goods moves against false, 
misleading, and deceptive practices and allow consumers to receive 
compensation for amounts greater than the cost of the actual lost or 
damaged goods. For example, consumers in five of the states we visited 
can receive a monetary award up to three times the actual economic 
damages. Additionally, all six states have laws governing intrastate 
movers but vary in their licensing, oversight, and enforcement 
requirements. For example, four of the six states we visited have 
licensing requirements (i.e., background checks, evidence of financial 
fitness, etc.) in addition to the requirement that applicants provide 
proof of insurance. With regard to aiding consumers whose goods are 
held hostage, two states (California and Florida) have changed their 
laws to allow local law enforcement authorities to intervene in these 
situations. In the states we visited that have enacted legislation to 
improve their consumer protections, officials told us that these laws 
and regulations--such as the additional licensing requirements and 
increased enforcement efforts--have helped to reduce consumers' 
problems with illegitimate[Footnote 7] intrastate movers and that the 
situation for consumers and legitimate intrastate movers had 
improved.[Footnote 8] 

Applying state consumer protection laws to interstate movers has the 
potential to enhance protections for consumers, but it may not be 
helpful in addressing the problem of illegitimate movers and may 
increase costs. If state consumer protections were applied to 
interstate movers, consumers would have the opportunity to resolve 
their disputes with interstate movers in state court, and consumers 
could potentially recover damages greater than the value of their lost 
or damaged goods. However, industry officials we contacted believe 
illegitimate movers would fail to appear in court and may not comply 
with any judgments. In addition, applying these laws would likely 
adversely affect interstate movers by increasing legitimate movers' 
operational expenses. The moving industry officials we contacted 
strongly oppose applying state consumer protection laws to interstate 
movers, pointing out that such action may increase costs. Furthermore, 
basic economic reasoning suggests that some of those increased costs 
may be passed on to consumers. However, some state officials we 
interviewed did not think that legitimate movers, who are already 
complying with states' consumer protection laws, would incur increased 
costs due to regulation. Finally, on the basis of our work in the six 
states, if interstate movers were subject to state consumer protection 
laws, the attorneys general of the five states that commented did not 
believe that applying state consumer protection laws to interstate 
movers would give the states additional authority over rate regulation. 

We are recommending that the Secretary of Transportation direct the 
Administrator of FMCSA to take several actions to improve oversight of 
the household goods moving industry, including developing a strategy, 
with performance goals and measures, that explains how FMCSA's 
oversight and enforcement activities related to household goods movers 
will improve consumer protection. We sent a draft of this report to DOT 
and to the Federal Maritime Commission (FMC). DOT generally agreed with 
the information provided in the report and both DOT and FMC provided 
technical clarifications, which we have incorporated as appropriate. 
DOT agreed to consider our recommendations. 

Background: 

Each year, commercial moving companies transport household goods of 
approximately 1.6 million Americans to other states. Over 3,000 of 
these moves result in complaints made annually to FMCSA. Additionally, 
the Council of Better Business Bureaus (BBB) reports that it received 
nearly 9,800 complaints against movers in 2005, of which approximately 
6,800 were settled.[Footnote 9] 

Approximately 4,000 moving companies actively transport household goods 
across state lines. These moving companies represent a small percentage 
of the approximately 677,000 interstate carriers engaged in all aspects 
of interstate commerce. Household goods movers are of three types: 
national van lines, independent movers, and short-haul movers. These 
companies use agents that perform the actual moves on behalf of the van 
lines. Agents are local moving companies that own the moving equipment 
and storage facilities used in interstate moves. Independent movers 
lease or own their equipment and storage facilities and often share 
storage facilities and some equipment in an effort to provide enough 
capacity and flexibility to compete with the national van lines. Short- 
haul movers typically undertake moves of around 500 miles or less. 

Until 1996, the Interstate Commerce Commission (ICC) had regulatory 
responsibility for interstate household goods movers, including issuing 
regulations, conducting oversight activities, and taking enforcement 
actions. The ICC Termination Act of 1995 dissolved ICC and transferred 
the consumer protections for those hiring interstate household goods 
movers to DOT, which DOT further assigned to the motor carrier safety 
office within the Federal Highway Administration. The Motor Carrier 
Safety Improvement Act of 1999 transferred these consumer protection 
functions to a new organization within DOT, FMCSA. Furthermore, the 
Federal Trade Commission is barred from regulating common carriers 
including movers of household goods. In addition to its headquarters 
facilities, FMCSA maintains a field office structure consisting of 4 
service centers and 52 division offices-one in each state, Puerto Rico, 
and the District of Columbia. 

FMCSA's oversight activities for interstate household goods movers 
include, among other things, education and outreach to consumers, and 
collecting information on the state of the industry, such as complaints 
lodged against registered movers. FMCSA also reviews compliance with 
regulatory requirements (called "compliance reviews") at a moving 
company's base of operations. When it identifies instances of 
noncompliance, FMCSA can rely on a variety of enforcement activities. 
For example, it can issue orders to compel compliance, impose civil 
monetary penalties, revoke a mover's operating authority, or seek 
federal court orders to stop regulatory violations. FMCSA can also seek 
a temporary restraining order or injunctive relief (i.e., a court order 
to prevent a carrier from engaging in a specific action) against a 
carrier that is suspected of operating illegally, although FMCSA 
officials told us they are not aware of an instance in which FMCSA has 
sought to issue a temporary restraining order or injunctive relief 
against a household goods carrier in a court of appropriate 
jurisdiction. As a regulatory agency, FMCSA does not have authority to 
arrest movers who violate the criminal provisions applicable to 
household goods moves. 

While consumer protections have been expanded in recent years under 
SAFETEA-LU, a long-standing federal statute known as the Carmack 
Amendment imposes limits on consumers' actions against interstate 
movers.[Footnote 10] The Carmack Amendment imposes a uniform scheme of 
liability for loss or damage, which eliminates the uncertainty 
associated with conflicting state laws regarding interstate shipments. 
The Carmack Amendment limits claims filed by consumers and preempts a 
broad range of state law remedies related to loss and damage in 
interstate shipment. A household goods mover's maximum liability for 
loss or damage can only be equal to the replacement value of the lost 
or damaged goods. Plaintiffs cannot recover damages in excess of their 
replacement value in federal court. 

For moves within a state, state laws govern the actions of household 
goods movers and state regulating agencies and possibly the state 
offices of attorneys general may work with the consumers to resolve 
issues related to an intrastate move. Federal laws apply to moves of 
household goods across state lines, and FMCSA is the only agency that 
accepts complaints from consumers involved in an interstate move. 
However, FMCSA was directed by a House Report not to become involved in 
assisting consumers in resolving individual disputes regarding an 
interstate household goods move. 

Federal Legislation and FMCSA's Enforcement Efforts Have Enhanced 
Protections for Consumers of Interstate Moves, but the Effectiveness of 
These Efforts Remains Unclear: 

Consumers who contract with interstate movers are protected by federal 
laws and regulations. These laws were recently strengthened by SAFETEA- 
LU, which passed in 2005, and increased licensing and registration 
requirements at the federal level. SAFETEA-LU also increased consumer 
protections by enhancing states' abilities to enforce laws against 
interstate movers in both state and federal court but it appears states 
have not yet used this new authority. In addition, SAFETEA-LU also 
required that FMCSA implement an outreach plan to enhance the 
coordination among federal and state law enforcement and consumer 
protection authorities. Since 2001, FMCSA has increased its oversight 
and enforcement activities against illegitimate movers as well as its 
consumer education outreach to prevent consumers from being victims of 
such movers. However, the effectiveness of its efforts is unknown, and 
FMCSA currently has no process in place to determine the effectiveness 
of its enforcement efforts; currently has no information on the 
usefulness of arbitration in resolving disputes consumers have with 
carriers; and has limited authority to help consumers whose goods have 
been lost, damaged, or are being held hostage by a mover. 

Federal Laws, Recently Strengthened by Congress, Provide Protections 
for Consumers of Interstate Household Goods Moves: 

Federal statutes provide protection for consumers who hire interstate 
household goods movers through licensing and registration requirements 
as well as other specific household goods laws designed to protect 
consumers.[Footnote 11] Current federal laws, including SAFETEA-LU, 
require movers of household goods to register with DOT and be licensed 
as a carrier of household goods. To be registered with DOT, carriers 
must pay a registration fee, provide evidence of insurance coverage and 
of participation in an arbitration program, and disclose any 
relationship involving common stock, common ownership, common 
management, or common familial relationship between themselves and 
other movers or brokers. The information which companies provide on 
their application about insurance coverage and participation in an 
arbitration program is confirmed by FMCSA within 18 months of the 
carrier's receiving a license.[Footnote 12] However, the agency does 
not perform any sort of background check on applicants. 

Federal laws specifically formulated to provide consumer protections 
require that household goods movers must charge reasonable rates, must 
maintain rates and rules in published tariffs, must provide consumers 
with written estimates, and must relinquish goods upon payment of no 
more than 110 percent of the estimated charges.[Footnote 13] If a mover 
refuses to release a consumer's goods when the consumer has paid either 
100 percent of the charges contained in a binding estimate or 110 
percent of the charges contained in a nonbinding estimate, then the 
mover is, in effect, holding the goods hostage. For such action, the 
mover faces civil penalties of at least $10,000 for each violation and 
criminal penalties of up to 2 years in prison. Additionally, should a 
mover refuse to comply with any federal rules, DOT is authorized to 
assess civil penalties, bring a civil action in federal court, and/or 
revoke the carrier's license. 

SAFETEA-LU also required FMCSA to take three further actions, among 
others, to enhance protections for consumers of household goods. First, 
the legislation required FMCSA to modify its regulations for brokers of 
household goods services, so that brokers will be required to provide 
consumers with their license number, a pamphlet on consumers' rights, 
and a list disclosing the moving companies for which the broker is 
providing services.[Footnote 14] Second, SAFETEA-LU required FMCSA to 
implement an outreach plan to enhance the coordination and enforcement 
of federal laws and regulations with respect to transportation of 
household goods between and among federal, state, and local law 
enforcement and consumer protection authorities. Third, the legislation 
required FMCSA to establish a working group, by November 2005, composed 
of state attorneys general, state consumer protection administrators, 
and federal and local law enforcement officials to develop practices 
and procedures to enhance federal-state relations in enforcement 
efforts with respect to interstate transportation of household goods. 

SAFETEA-LU Expanded Enforcement Authority at the State Level, but 
States Have Not Yet Used the New Authority and FMCSA Has Not Fully 
Implemented an Outreach Plan: 

The several provisions intended to enhance consumer protection at the 
state level contained in the SAFETEA-LU legislation were temporarily 
restricted by a subsequent amendment. However, the amendment expired in 
September 2006, restoring the full authorities granted to states under 
SAFETEA-LU.[Footnote 15] SAFETEA-LU enacted two separate provisions to 
enhance states' abilities to enforce laws against interstate movers. 
The first SAFETEA-LU provision allows state agencies to enforce federal 
consumer protection laws and regulations that apply to individual 
movers and that are related to the delivery or transportation of 
household goods in interstate commerce, in either federal or state 
court. The expired amendment restricted this enforcement to federal 
court only, but state regulatory authorities are now able to utilize 
either federal or state court under the authority granted by SAFETEA- 
LU. This provision applies to state agencies that regulate intrastate 
household goods movers, authorizing the regulatory agency to impose 
penalties on interstate movers for violating federal laws and 
regulations. This section also contains an added incentive for the 
state agencies, by allowing the penalties to be paid to and retained by 
the state. Penalties collected under this authority are not paid to the 
consumer. 

The second SAFETEA-LU provision grants state attorneys general the 
right to bring civil actions on behalf of individual consumers or 
impose civil penalties in U.S. federal district courts to enforce the 
federal consumer protection laws and regulations whenever the state 
attorneys general have reason to believe that the interests of their 
residents are being threatened or adversely affected by an interstate 
mover.[Footnote 16] The expired amendment placed temporary restrictions 
on these civil suits by limiting them to apply only to movers who were 
unregistered, newly licensed, poorly rated, or who had their license 
revoked, but these limitations no longer apply, and state attorneys 
general may now bring suits against any mover.[Footnote 17] If a 
resident of a state is adversely affected by the actions of a carrier 
or broker, the state attorney general may sue on the resident's behalf 
to enforce the federal laws and regulations with which the carrier or 
broker was required to comply. Penalties imposed and collected by these 
lawsuits would be paid to the federal government, not to the state or 
the individual consumer. 

For any civil action initiated by a state attorney general, the state 
must serve written notice to DOT or the Surface Transportation Board 
(STB),[Footnote 18] whichever agency has jurisdiction. DOT or STB must 
review the action if (1) the carrier or broker is not registered with 
DOT; (2) the license of the carrier or broker is pending for failure to 
file proof of required bodily injury or cargo liability insurance, or 
the license has been revoked for any reason by DOT; (3) the carrier is 
not rated or has received a conditional or unsatisfactory rating by 
DOT; or (4) the carrier or broker has been licensed with DOT for less 
than five years. DOT or STB has the authority to intervene in a civil 
action, to be heard on all matters arising in the action, and to file 
petitions for appeal of decisions in such actions. 

SAFETEA-LU also required that FMCSA identify for states the federal 
statutory provisions and FMCSA regulations that states may enforce 
through either the attorney general provision or the state agency 
provision. In November 2006, FMCSA published a notice in the Federal 
Register, identifying the federal consumer protection laws and 
regulations that states may immediately enforce. The statutory 
provisions enforceable by states include laws regarding requirements 
and penalties for tariffs, written binding estimates, registration 
requirements, full value protection, binding arbitration, falsifying 
documents, and holding goods hostage. The federal regulations 
promulgated by FMCSA that are enforceable by states include the 
consumer protection regulations in 49 C.F.R. Part 375, which involve 
bills of lading for freight forwarders, investigations of loss and 
damage claims, records kept by brokers, and insurance requirements. 

Furthermore, as noted earlier, SAFETEA-LU required that DOT establish a 
working group of state attorneys general, consumer protection 
authorities, and federal and local law enforcement agencies, and 
implement an outreach plan. FMCSA established the working group which 
has met several times since October 2005, with the last meeting 
occurring in April 2007. The working group established a charter 
specifying that the group, which is to meet every quarter, would 
develop practices and procedures to enhance the federal-state 
partnership, exchange information and coordinate enforcement efforts, 
and submit legislative and regulatory recommendations to the Secretary 
of DOT regarding such enforcement efforts. While the group's meeting 
notes do not mention the development of an outreach plan to help states 
use and enforce federal laws at the local level pertaining to household 
goods matters, in March 2007, FMCSA officials shared with us documents 
that indicate a contractor has been hired to work with the group to 
begin formulating such a plan and develop milestones. Two of the 
group's participants told us that in past meetings, the group had 
focused on FMCSA's efforts to improve its public education via its Web 
site. At the meeting held on November 28, 2006, which was led by FMCSA, 
state officials said that they would like clearer guidance from FMCSA 
on using authority granted to the states. This request that FMCSA 
provide some guidance to the states on implementing the authority 
granted to them by SAFETEA-LU was reiterated in April, 2007, by one of 
the participants of the working group. 

The effectiveness of SAFETEA-LU's provisions granting states authority 
to pursue interstate movers in federal and state court remains unclear 
because, as of March 2007, it appears that no state had yet used this 
authority, according to officials of the National Association of 
Attorneys General and the National Association of Consumer Agency 
Administrators. Officials in four states that expressed an opinion on 
the SAFETEA-LU authority told us that prosecuting cases in federal 
court was either too expensive or not an efficient use of state 
resources. 

FMCSA Has Updated Regulations and Increased Oversight and Enforcement: 

Since our 2001 report,[Footnote 19] which recommended improving 
oversight of the household goods industry, FMCSA has updated its 
regulations, increased its oversight activity, and taken steps to 
enhance its consumer education and outreach activities. Current 
regulations include specifying the information that movers must include 
in their advertisements, the information that they must provide to 
consumers who contract with them, the manner in which they provide 
estimates to consumers, and criteria for establishing and maintaining 
an arbitration program. FMCSA has increased its oversight activity, 
including increasing the number of full-time household goods 
investigators from 2 to 8, training nearly 100 truck safety 
investigators to review companies' compliance with regulatory 
requirements, and recently updating an electronic field office training 
manual for investigators carrying out household goods compliance 
reviews. Over the past 5 years, this expanded work force has enabled 
FMCSA to increase the annual number of compliance reviews it conducts 
from 13 in 2001 to 562 in 2006. FMCSA has also increased its 
enforcement actions against movers through the use of strike forces. 
Strike forces focus on states that have reported a high number of 
complaints about household goods movers and bring together FMCSA and 
state law enforcement officials to make site visits to the carriers 
that have generated the greatest number of complaints. FMCSA also 
partners with state law enforcement agencies to conduct "roadside" 
audits in an effort to locate and remove from the road, drivers and 
trucks that are operating in an unsafe or illegal manner.[Footnote 20] 
FMCSA's enforcement actions against interstate movers from fiscal year 
2001 to 2006 resulted in over $950,000 in fines being 
collected,[Footnote 21] and 28 moving companies being put out of 
business, as shown in table 1 below. 

Table 1: FMCSA Compliance Reviews and Enforcement Actions against 
Interstate Movers, Fiscal Years 2001 through 2006: 

FMCSA actions: Compliance reviews; 
2001: 13; 
2002: 20; 
2003: 30; 
2004: 52; 
2005: 381; 
2006: 562; 
Total: 1,058. 

FMCSA actions: Enforcement actions; 
2001: 5; 
2002: 11; 
2003: 6; 
2004: 12; 
2005: 46; 
2006: 72; 
Total: 152. 

FMCSA actions: Amount fined; 
2001: $78,000; 
2002: $481,000; 
2003: $396,180; 
2004: $150,360; 
2005: $312,120; 
2006: $467,905; 
Total: $1,885,565. 

FMCSA actions: Amount collected; 
2001: $61,500; 
2002: $226,000; 
2003: $40,180; 
2004: $56,910; 
2005: $245,420; 
2006: $323,775; 
Total: $953,785. 

FMCSA actions: Carriers put out of service; 
2001: 1; 
2002: 5; 
2003: 1; 
2004: 3; 
2005: 11; 
2006: 7; 
Total: 28. 

Source: GAO analysis of FMCSA compliance reviews and enforcement 
actions. 

[End of table] 

In addition, in response to our 2001 report highlighting the need to 
centralize household goods complaint data, FMCSA officials told us they 
created, in 2001, the Complaint Management System and set up and made 
available the Safety Violation and Household Goods Consumer Complaint 
Hotline at 1-888-DOT-SAFT, which consumers can call to complain about 
an interstate household goods mover. The data provided by FMCSA staff 
indicate there have been over 3,000 complaints annually, since 2004, 
about household goods movers.[Footnote 22] The SAFETEA-LU legislation 
passed in 2005 required that FMCSA make this complaint data available 
to the public by August 2006. FMCSA told us they did not meet the 
deadline because developing, testing, and finalizing the National 
Consumer Complaint Database for Household Goods Movers was 
significantly more complicated than anticipated, but the public launch 
date is scheduled for spring 2007. 

Our 2001 report also stated that for interstate moving services, as for 
other services, the primary responsibility for consumer protection lies 
with consumers. To expand its consumer outreach and help educate 
consumers, FMCSA launched a consumer education campaign in 2005 called 
"Protect Your Memories. Your Money. Your Move." This campaign aims to 
provide consumers with information on how to avoid illegal movers and 
to raise the visibility of the new Web site developed by 
FMCSA.[Footnote 23] This Web site, titled "Protect Your Move," provides 
guidance on how to have a successful move and avoid falling victim to 
dishonest movers or brokers. The site provides a list of federally 
registered and insured movers and brokers, details about current 
regulations governing household goods movers, and instructions on how 
to file a complaint. The site also provides links to local Better 
Business Bureaus, consumer protection agencies, state attorneys 
general, and state and national moving associations. Since being 
activated in June 2005, the Web site has had more than 5 million hits. 
In addition, the agency has partnered with a company that prints yellow 
pages to help educate consumers about the Web site. FMCSA officials 
also told us that they partnered with the U.S. Postal Service to 
distribute approximately 20 million leaflets to states that have the 
highest concentration of household goods complaints, i.e., California, 
Florida, New Jersey and New York. In addition, officials also stated 
that they intend to reach roughly 1.8 million consumers through the 
Postal Service's online Change of Address service. 

Overall Effectiveness of Federal Efforts to Protect Consumers Is 
Unknown: 

FMCSA has not established a comprehensive strategy or a process to 
fully measure the overall effectiveness of the agency's household goods 
enforcement and oversight efforts. FMCSA's draft strategic plan for 
2006 through 2011--which as of March 2007 had not been issued in final 
form[Footnote 24]--contains very little information about FMCSA's 
efforts in providing oversight and enforcement of the household goods 
industry.[Footnote 25] For example, the draft plan does not articulate 
an overall strategy for overseeing the household goods industry that 
identifies each of its major activities--including implementing 
legislative changes, addressing consumer complaints, carrying out 
compliance reviews, taking enforcement actions, and improving consumer 
education and outreach--or explains how those activities collectively 
will improve consumer protection. Rather, the draft plan contains very 
limited information about FMCSA's efforts, including (1) a statement 
that FMCSA has established a partnership with state, local, and private 
sector officials to address the problem of illegitimate movers and (2) 
an output goal to improve the timeliness of FMCSA's response to 
household goods consumer complaints. Additionally, the draft plan does 
not contain any performance goals or measures related to FMCSA's major 
responsibilities and outcomes in conducting compliance reviews and 
strikeforces, taking enforcement actions, or providing consumer 
outreach. Under the Government Performance and Results Act of 1993 
(GPRA), federal programs should have well-defined strategies to help 
align activities, core processes, and resources to support achievement 
of strategic goals and missions. Additionally, setting meaningful goals 
for performance, and using performance information to measure 
performance against those goals, is consistent with the requirements in 
GPRA. One of the stated missions of FMCSA's household goods program is 
to identify the worst violators of federal rules and regulations and 
focus enforcement efforts on reducing their number and making this 
information available to the public, but FMCSA does not have 
performance goals or measures related to this mission. Without 
performance goals that are meaningful, comprehensive, and measurable, 
and without evaluation, it is difficult to determine whether FMCSA's 
household goods program is accomplishing its intended purpose and 
whether the resources dedicated to the program efforts should be 
increased, used in other ways, or applied elsewhere. FMCSA's own 
internal assessment of its household goods program, reported in May 
2006, found (1) a lack of management tools and integrated databases to 
track, monitor, and report household goods performance; (2) 
inconsistent and unpredictable handling of household goods consumer 
complaints and subsequent compliance actions; and (3) unclear goals, 
performance measures, and management controls for supporting timely 
communications among headquarters, the field, and other entities. 

With regard to its consumer education and outreach efforts, we reported 
in December 2005 that there was little information on the effectiveness 
of FMCSA's education and outreach programs since FMCSA had not 
completed many evaluations of its programs.[Footnote 26] In response to 
our report, FMCSA has developed a "consumer outreach and education 
logic model" that it plans to use to determine the effectiveness of its 
outreach and education efforts. This model outlines the program areas 
where FMCSA is planning to develop metrics for evaluating the 
effectiveness of its outreach and education activities. FMCSA officials 
expect to complete a report assessing their consumer outreach and 
education efforts, including this model, by January 2008. 

Lastly, FMCSA does not know how effective arbitration has been for 
consumers to resolve their disputes with movers and, as noted earlier, 
the agency was directed in a House Report not to resolve individual 
consumer complaints. Consumers of interstate moves who are unable to 
resolve a dispute with a mover generally have two choices: they can 
take the mover to court or they can select arbitration, in which a 
third party is given the facts of the dispute from both the consumer 
and the mover and renders a binding decision. In three state attorneys 
general offices, officials with whom we spoke told us that to sue a 
mover for loss or damage in federal court is costly and not a realistic 
option for most consumers. As a result, arbitration is the main option 
for those who have a dispute with a mover, and there is currently no 
information available on whether this is an option consumers find 
equitable and fair. The ICC Termination Act of 1995 mandated that DOT 
complete a study of the effectiveness of arbitration as a means of 
settling household goods disputes within 18 months of the date of 
enactment. FMCSA did not initiate the required study until fiscal year 
2004 because of a lack of resources. FMCSA estimates that the study 
will be completed in 2007, more than a decade after the study was 
mandated, and 6 years after we recommended that FMCSA undertake and 
complete the study. 

FMCSA officials told us they consider their current level of oversight 
and enforcement of the household goods industry adequate within the 
resources available. They pointed out that 85 to 90 percent of 
complaints were generated in six states--Florida, New York, New Jersey, 
California, Texas and Illinois--and they have targeted strike force 
activity in these problem states and placed household goods 
investigators in several of them. The agency also increased its 
performance target of compliance reviews of household goods movers it 
conducted, from 300 in fiscal year 2005 to 450 in fiscal year 2006, and 
plans to conduct another 450 or more reviews in fiscal year 
2007.[Footnote 27] 

In five of the six states we visited, however, state regulating agency 
officials told us that they do not think FMCSA is providing adequate 
protection for consumers. For example, officials in two states told us 
that they do not think FMCSA has the resources to adequately address 
consumer complaints. Officials in another state told us that current 
federal laws are adequate to protect consumers; in their view, the 
problem is enforcement by FMCSA. When asked what could be done to 
improve protections for consumers of interstate moves, representatives 
from two of six state regulatory agencies and one of six local BBBs 
told us that FMCSA's licensing requirements should be more stringent. 
In addition, a representative from 1 of 10 moving companies, a 
representative from one of five state moving associations, as well as 
representatives of the national American Moving and Storage Association 
told us that in their opinion, one way to reduce the number of 
illegitimate movers would be for FMCSA to make its licensing 
requirements more stringent. According to these officials, the agency 
should conduct background checks to limit market entry; some thought 
this was necessary to keep out companies who have previously had their 
license revoked. 

Hostage Goods Situations Are Frequently Cited as the Most Egregious 
Violation Committed by Moving Companies, but Few Resources Exist to Aid 
Consumers in Resolving These Situations: 

While the number of hostage goods situations reported annually is small 
compared with the overall number of interstate moves, the experience 
can be quite traumatic. Most of the approximately 1.6 million 
interstate moves handled annually by commercial movers are accomplished 
in a relatively safe and satisfactory manner. The FMCSA complaint 
database indicates that since 2004, FMCSA has received between 3,100 
and 3,600 complaints a year; in 2004 and 2005 over 600 complaints were 
specifically about goods held hostage; and in 2006, about 450 
complaints were about hostage goods. However, as DOT's Acting Inspector 
General testified in May 2006, some victims of movers who held their 
goods hostage have not seen their belongings again, have not recovered 
their damaged possessions until many months after the move, have had 
their goods looted and sold, or have had their goods end up in the 
homes of the perpetrators. He provided the following examples of the 
personal hardship resulting from hostage goods situations:[Footnote 28] 

* Household goods belonging to a mother and infant were held hostage 
for more than a year because the mother did not pay the carrier's 
demand of a five-fold increase in the cost of their move from New York 
to Florida. 

* A West Virginia couple paid $5,000 in bogus charges after the carrier 
threatened that they would never again see their household goods, which 
included a piano that had belonged to the couple's deceased son. 
Although they eventually received their goods, the piano had been 
damaged beyond repair. 

* An elderly New York couple, intimidated and fearing physical harm 
from a moving crew, paid $5,000 for a move quoted at $1,500. 

* A Massachusetts woman testified at trial that she felt "violated" 
when a carrier loaded her goods on a truck and demanded $16,000--more 
than four times the company's estimate of $3,600. 

Consumers whose goods are being held hostage have few legal resources. 
If the move is being made within the state, the consumer can call the 
state agency that regulates household goods movers and/or the state 
attorney general's office and possibly get some help. For example, 
state officials told us that if a consumer complains about a carrier in 
Virginia, the Department of Motor Vehicles (DMV) requires the moving 
company to respond. If the company does not, DMV can investigate the 
carrier. In addition, in Florida and California, consumers can now call 
on local police to help them retrieve their goods from movers who 
engage in such tactics. 

FMCSA officials told us that consumers involved in moving goods across 
state lines, however, have little access to help. The only federal 
agency with oversight responsibility is FMCSA. If consumers' goods are 
being held hostage at the time of their call, FMCSA officials told us 
that it is possible someone with the complaint line will attempt to get 
consumers' goods released.[Footnote 29] However, FMCSA officials told 
us that they have no legal authority to order a mover to release goods 
held hostage. Even though holding goods hostage has been made a felony 
by the recent SAFETEA-LU legislation, FMCSA, as a regulatory agency, 
lacks law enforcement authority. One federal official we interviewed 
told us that it is unrealistic to think federal officers would assist 
in retrieving a consumer's goods being held hostage. Movers who hold 
goods hostage are often illegitimate operations and may only be in 
business for a short time under any given name; thus, once they have 
either forced a few consumers to pay them additional money or taken the 
consumer's goods to an undisclosed location, they may shut down their 
business and set up operations under a new name. The case histories 
cited by DOT's Acting Inspector General demonstrate that if consumers 
are unable to get movers to release their goods when the movers first 
threaten to hold them for additional money, the consumer may be forced 
to pay excessive charges or their goods may be permanently lost. In his 
May, 2006, testimony before Congress, DOT's Acting Inspector General 
noted that "state authorities are in a better position to pursue cases 
with fewer victims and smaller losses, and to provide more timely 
action to stop unscrupulous movers--perhaps even while the hostage 
goods are still on the truck."[Footnote 30] Three interstate movers as 
well as FMCSA officials at headquarters and one of the regional offices 
whom we interviewed agreed that one possible solution to the problem of 
aiding consumers whose goods are held hostage would be for FMCSA to 
partner with the states and local authorities to aid consumers in 
retrieving their goods. Officials from several organizations, including 
an established mover, one BBB official, and one FMCSA official at a 
field office told us they are concerned about illegitimate movers 
because they are driving legitimate movers out of business. 

Some state, federal, and BBB officials told us that carriers most 
likely to hold goods hostage are small operations. In his May 2006, 
congressional testimony, DOT's Acting Inspector General also emphasized 
that such movers often solicit business through the Internet, using low 
prices to attract customers. Consumers today use the Internet to shop 
and compare prices for many products and services, including moving 
services. But because consumers may only contract for moving services 
once or twice in their lifetime, they may not know how to identify a 
legitimate mover. Some federal and state officials told us that 
interstate movers who advertise on the Internet are a significant 
source of consumer complaints. One state official agreed that requiring 
movers to have a link to FMCSA's "Protect Your Move" Web site in their 
Internet ads could improve a consumer's knowledge about how to conduct 
a successful move and could aid consumers in avoiding illegitimate 
movers. 

The States We Visited Provide Protections to Consumers of Intrastate 
Moves but Vary in Their Industry Oversight and Enforcement: 

All six of the states we visited have consumer protection laws that 
give the consumer the right to bring a suit against an intrastate mover 
for recovery or compensation for lost or damaged goods. Consumers can 
also receive monetary compensation greater than the actual amount of 
the lost or damaged goods if the consumer was harmed by fraudulent or 
deceptive practices, which is currently not available to consumers of 
interstate moves that are subject to federal consumer protection laws 
and regulations. The six states we visited also have laws governing 
intrastate household goods movers, but they vary in their licensing 
requirements and the level of resources they commit to oversight and 
enforcement. In the states we visited that have enacted legislation to 
improve their consumer protections, officials told us that these laws 
and regulations--such as the additional licensing requirements and 
increased enforcement efforts--have helped to reduce consumers' 
problems with illegitimate intrastate movers and that the situation for 
consumers and legitimate intrastate movers had improved. 

States Have Consumer Protection Laws that Allow Consumers to Sue 
Intrastate Movers for Amounts over the Valuation of Their Goods: 

The states we visited have laws in place that permit consumers to 
pursue intrastate movers in court for false and deceptive trade 
practices. These laws allow consumers to sue intrastate movers in the 
state and local court system for damages in excess of actual property 
values, attorney's fees and court costs, but the states differ in the 
amount of monetary compensation beyond the actual damages that a 
consumer can recover. For example, five of the six states we visited 
(California, Georgia, New York, Texas, and Virginia) allow consumers to 
recover a maximum up to three times the monetary value of actual 
damages. 

Table 2: Highlights of Recovery Provisions in Consumer Protection Laws 
of the Six States We Visited: 

State: California; 
State consumer protection laws: Consumers can bring suit under 
California's Unfair Practices Act and can recover up to three times the 
actual damages sustained. 

State: Florida; 
State consumer protection laws: Florida specifically authorizes 
individual consumers to sue for damages if they have been aggrieved by 
unfair and deceptive trade practices. The amount of damages for 
individuals is not specified, but if the state imposes a civil penalty 
under this section, the mover is liable for up to $10,000 for each 
violation. 

State: Georgia; 
State consumer protection laws: Georgia authorizes individual consumers 
to sue under the state's Fair Business Practices Act to recover general 
damages, as well as exemplary damages when the violation was 
intentional. The statute directs the court to award three times the 
damages when the violation is intentional. 

State: New York; 
State consumer protection laws: New York consumer protection law 
prohibits deceptive acts and practices and authorizes consumers who 
have been injured by violation of the section to bring an action in 
their own name "to enjoin such unlawful act or practice, an action to 
recover actual damages or fifty dollars, whichever is greater, or both 
such actions. The court may, in its discretion, increase the award of 
damages to an amount not to exceed three times the actual damages up to 
$1,000, if the court finds the defendant willfully or knowingly 
violated this section. The court may award reasonable attorney's fees 
to a plaintiff." New York law also allows consumers to take action for 
false advertising where consumers can receive damages up to $1,000 
meaning that consumers can potentially recover up to $2,000 if the 
mover has engaged in both false advertising and deceptive practices. 

State: Texas; 
State consumer protection laws: Texas law allows individual consumers 
who sustain damages from deceptive acts to recover economic damages and 
damages for mental anguish, as well as court costs and attorney's fees. 
If the conduct of the mover was committed knowingly, the plaintiff may 
recover mental anguish damages up to three times the cost of the 
economic damages. Texas defines a knowing act as one in which the 
person is aware that his/her conduct is reasonably certain to cause the 
result. If the conduct was committed intentionally, the plaintiff may 
recover mental anguish damages up to three times the cost of the 
economic damages plus mental anguish damages. Texas defines an 
intentional act as one in which the person has a conscious objective or 
desire to engage in the conduct or cause the result. 

State: Virginia; 
State consumer protection laws: Virginia law authorizes individual 
consumers whose goods are damaged by deceptive or fraudulent practices 
to recover $500 or actual damages, whichever is greater. If the 
violation was willful, the consumer can recover up to three times the 
actual damages or $1,000, whichever is greater. 

Source: GAO analysis of state consumer protection laws. 

[End of table] 

While consumers in the six states have the ability to obtain 
compensation in excess of their lost and damaged goods for intrastate 
moves, they do not have this option if making an interstate move that 
is subject to federal consumer protection laws and regulations. As 
previously discussed, the Carmack Amendment limits consumers of 
interstate movers to recovering only the value of their lost or damaged 
goods in federal court. 

States Have Laws Governing Intrastate Household Goods Movers but Vary 
in Their Licensing Requirements, Oversight, and Enforcement: 

All six states we visited have laws and regulations specific to 
intrastate household goods movers, but the state laws differ in their 
requirements of intrastate household goods movers. Five of the six 
states have requirements for intrastate movers to provide consumers 
some form of written estimate, but the states have different provisions 
on what should be in the estimate. For example, Florida requires 
estimates for a move to be signed by both the mover and the consumer, 
and the mover cannot charge anything more than the signed estimate. New 
York requires that if the actual shipping cost exceeds the estimate by 
more than 10 percent, the mover must notify the consumer. Georgia, on 
the other hand, requires movers to provide either a binding or 
nonbinding estimate if requested by the consumer. All six states also 
have laws that allow the state regulating agency to fine intrastate 
movers for violations of state laws or regulations. Five of the six 
states have fines up to $5,000 per violation, and one state can fine a 
mover up to $20,000 for violating intrastate mover laws. 

Some of the laws or requirements resulted from problems that states 
have had with movers. Three states have made changes to their 
intrastate household goods mover laws or requirements due to recent 
problems with illegitimate movers. State officials in Florida told us 
that problems with intrastate movers in their state resulted in a new 
intrastate mover law in 2002 that, among other things, makes holding 
goods hostage a third-degree felony. New York state officials stated 
that they tightened their entrance requirements in the mid-1990s as a 
result of rising complaints against intrastate movers and began 
disconnecting telephone lines of moving companies that were violating 
state laws. Officials in California stated that increased problems with 
movers in their state led to changes in the law that included 
automatically revoking the license of movers in violation of 
regulations and giving local police the authority to intervene in 
situations involving goods held hostage. Table 3 highlights some of the 
intrastate household goods mover laws in the six states we visited. 

Table 3: Highlights of Selected State Laws Governing Intrastate 
Household Goods Movers: 

State: California; 
State regulating agency for intrastate movers: Public Utility 
Commission; 
Cost estimates for moving household goods: A mover must provide either 
a written estimate of the total cost of the move or a written maximum 
rate for the cost of the move; 
Maximum fines that can be imposed per violation: $30,000; 
Provision in state law for hostage goods situations: Gives local peace 
officers authority to intervene. 

State: Florida; 
State regulating agency for intrastate movers: Department of 
Agriculture and Consumer Services; 
Cost estimates for moving household goods: Estimate must be in writing 
and must include an itemized breakdown; description; and total of all 
costs and services for loading, transporting, and unloading goods. The 
estimate must also be signed by the mover and the consumer; 
Maximum fines that can be imposed per violation: $5,000; 
Provision in state law for hostage goods situations: Makes hostage 
goods situations a third-degree felony and gives law enforcement 
authority to intervene. 

State: Georgia; 
State regulating agency for intrastate movers: Public Service 
Commission; 
Cost estimates for moving household goods: At the request of the 
consumer, movers must provide either a binding or nonbinding estimate. 
For nonbinding estimates, a mover cannot collect more than 110 percent 
of the estimate at the time of delivery; 
Maximum fines that can be imposed per violation: $5,000; 
Provision in state law for hostage goods situations: No state 
provision. 

State: New York; 
State regulating agency for intrastate movers: Department of 
Transportation; 
Cost estimates for moving household goods: At the request of the 
consumer, more than 72 hours before pick- up, a mover must provide a 
written estimate.[A] If the mover determines that the actual shipping 
cost will exceed the estimate by at least 10 percent, the carrier must 
inform the consumer by telephone or telegram; 
Maximum fines that can be imposed per violation: $5,000; 
Provision in state law for hostage goods situations: No state 
provision. 

State: Texas; 
State regulating agency for intrastate movers: Department of 
Transportation; 
Cost estimates for moving household goods: Movers must provide a 
written estimate prior to loading a consumer's household goods. The 
estimate must have the maximum amount the consumer could be required to 
pay; 
Maximum fines that can be imposed per violation: $5,000 for each 
violation and up to $15,000 for knowingly committing a violation; 
Provision in state law for hostage goods situations: A mover must 
release the household goods to a shipper at destination if the shipper 
pays the maximum price listed on the moving services contract. 

State: Virginia; 
State regulating agency for intrastate movers: Department of Motor 
Vehicles; 
Cost estimates for moving household goods: At the consumer's request, 
the mover must provide a written nonbinding estimate of charges after a 
visual inspection of the goods. The estimate must contain language 
stating that the estimate is not a guarantee that the actual charges 
will not exceed the estimated amount; 
Maximum fines that can be imposed per violation: $5,000; 
Provision in state law for hostage goods situations: No state 
provision. 

Source: GAO analysis of state household goods mover laws: 

[A] Moves of one room that are less than 400 square feet do not have to 
have a written estimate. 

[End of table] 

All six states have laws that require moving companies to obtain a 
license to operate. Additionally, all six states require moving 
companies to obtain some level of insurance to provide cargo liability 
in case of loss or damage to household goods. For example, Georgia 
requires intrastate movers to maintain cargo insurance of $10,000 while 
California requires cargo insurance of $20,000. Virginia requires 
movers to carry $50,000 cargo liability insurance coverage to cover 
lost or damaged goods. According to a Florida state official, lack of 
adequate insurance is the primary reason for denial of a license. 

While all six states have some similar requirements for an intrastate 
mover to obtain a license, four states have additional requirements. 
For example, three of these states perform background checks of 
household goods mover applicants. In California, the state requires 
applicants to be fingerprinted and performs criminal background checks 
through the FBI and the state Department of Justice. Additionally, 
these states have other requirements for intrastate movers to obtain a 
license. For example, California and New York require applicants to 
meet certain requirements pertaining to financial fitness and industry 
knowledge in order to receive a license. In New York, applicants must 
submit evidence of (1) at least 2 years experience in the household 
goods moving industry, (2) equipment suitable for transporting 
household goods, and (3) sufficient moneys or funds to meet start-up 
costs. Table 4 provides information on some of the requirements for 
obtaining an intrastate mover license in states that we visited. 

Table 4: Selected State Licensing Requirements for Intrastate Household 
Goods Movers: 

State: California; 
Proof of cargo insurance: X; 
Background checks: X; 
Evidence of financial fitness: X; 
Evidence of industry knowledge: X. 

State: Florida; 
Proof of cargo insurance: X; 
Background checks: [Empty]; 
Evidence of financial fitness: [Empty]; 
Evidence of industry knowledge: [Empty]. 

State: Georgia; 
Proof of cargo insurance: X; 
Background checks: [Empty]; 
Evidence of financial fitness: X; 
Evidence of industry knowledge: [Empty]. 

State: New York; 
Proof of cargo insurance: X; 
Background checks: X; 
Evidence of financial fitness: X; 
Evidence of industry knowledge: X. 

State: Texas; 
Proof of cargo insurance: X; 
Background checks: [Empty]; 
Evidence of financial fitness: [Empty]; 
Evidence of industry knowledge: [Empty]. 

State: Virginia; 
Proof of cargo insurance: X; 
Background checks: X; 
Evidence of financial fitness: X; 
Evidence of industry knowledge: [empty]. 

Source: GAO analysis of state household goods mover licensing 
requirements. 

Note: Florida allows companies with two or fewer trucks to provide a 
$25,000 bond in lieu of carrying cargo insurance. Virginia requires a 
newly certificated intrastate mover to carry a $50,000 bond for the 
first 5 years of operation to protect the consumer against fraud by the 
mover. 

[End of table] 

According to a number of state and moving industry officials, these 
additional licensing requirements did not adversely impact legitimate 
movers and effectively screened out undesirable illegitimate movers. 
Additionally, officials from one state told us that when their state 
was not adequately screening movers, illegitimate movers were entering 
the marketplace. These officials also stated that one of the traits of 
illegitimate movers is that they do not pay the same costs as 
legitimate movers (e.g., liability insurance, workman's compensation 
etc.) According to a moving industry official, the low rates which 
illegitimate movers use to lure customers make it necessary for 
legitimate movers to lower their rates, but legitimate movers still 
have all the attendant costs of insurance for vehicles, personnel, 
workmen's compensation, and decent wages. Some of these officials 
stated that illegitimate movers may pay none of these costs, thus 
driving out the legitimate, quality movers. 

Oversight of intrastate household goods movers varied in the six states 
we visited. Three of the states (California, Florida and New York) had 
increased the amount of oversight and enforcement due, in part, to the 
severity of the problem with intrastate household goods movers. For 
example, California officials stated that they had increased the number 
of their investigators from 4 to 8 due to the rising problems with 
intrastate movers. Florida has 11 investigators it uses for household 
goods oversight and other programs. Conversely, Virginia officials 
stated that they have no full time staff dedicated specifically to 
overseeing household goods movers because intrastate movers have not 
been viewed as a problem, in terms of the number of complaints. In 
Georgia, the state official responsible for household goods oversight 
stated that changes in state agency jurisdiction for household goods 
oversight led to a reduction in the number of investigators and 
subsequently, increased problems with movers in the state. 

Officials in all six states told us that they also receive consumer 
complaints on intrastate movers and attempt to resolve them. In 
addition, Texas and Virginia have more formal mediation programs 
available to consumers to resolve their complaints. Two states we 
visited (Georgia and Virginia) make complaint information available to 
the public via the Internet. In Virginia, consumers can search moving 
companies by name to see if a complaint has been logged against a 
company and whether the complaint was resolved favorably or 
unfavorably. Consumers in Georgia can view a list of licensed 
intrastate movers to determine if a mover has had a complaint filed 
against the company. The other four states we visited stated that 
consumers can call to inquire if a complaint has been made against a 
specific moving company. State officials also told us that many of the 
complaints that consumers have are related to small and illegitimate 
movers who often advertise on the Internet. 

Enforcement activity against intrastate movers in the six states we 
visited also varied. According to Florida officials who regulate 
intrastate household goods movers, since 2002, over 360 investigations 
have been conducted, and over $270,000 in fines have been assessed 
against movers. Additionally, the Florida Attorney General's Office has 
pursued 22 cases against movers under their consumer protection laws 
resulting in civil penalties against movers. Since 2003, California has 
performed 541 investigations and fined intrastate movers over $350,000. 
An official with the California Office of Attorney General told us that 
the office has successfully prosecuted movers under state consumer 
protection laws, resulting in companies being put out of service and 
deportation. On the other hand, officials with Virginia's Office of 
Attorney General stated that they did not remember any enforcement 
action brought against intrastate movers in the last 17 years. 

States That Took Actions to Improve Consumer Protections Told Us that 
These Actions Had a Positive Effect on Both Consumers and Legitimate 
Movers: 

Officials in three states we visited stated that after the state took 
actions to improve protections of consumers of intrastate moves, 
problems with intrastate movers decreased, and the situation for 
consumers and legitimate intrastate movers had improved. For example, 
California and New York state officials said that their additional 
licensing requirements of background checks and proof of financial 
fitness have helped to screen out illegitimate movers. California state 
officials told us that they were surprised by the number of former 
criminals applying for licenses to operate as an intrastate mover when 
they began performing background checks. New York officials also stated 
that disconnecting the telephone lines of moving companies that violate 
state laws had been effective in reducing the ability of illegitimate 
movers to continue to operate and that complaints against intrastate 
movers have gone down as a result of increased compliance efforts and 
the additional licensing requirements. In fact, information provided by 
New York State officials indicates that consumer complaints against 
intrastate movers have declined from a high of 553 complaints in 1997 
to 203 complaints in 2005.[Footnote 31] Florida officials stated that 
the new enforcement measures, which allow law enforcement authorities 
the right to force movers to release hostage goods have reduced the 
number of hostage goods situations. Additionally, a California official 
stated that the additional laws pertaining to intrastate movers have 
not adversely affected legitimate movers. In fact, the official stated 
that legitimate movers were happy to have the additional laws because 
legitimate businesses are being hurt by illegal operators. Officials 
representing the state's moving association also stated that the moving 
industry supports the additional state laws California has enacted to 
remove illegitimate movers from the industry. Officials representing 
New York's moving association stated that their state requirements help 
screen out illegitimate movers and help educate movers that receive a 
license about what it takes to operate as a legitimate mover. 

Applying State Consumer Protection Laws to Interstate Movers May Aid 
Consumers and Could Increase Movers' Costs, but Such Action Is Unlikely 
to Allow States to Regulate Rates of Interstate Movers: 

Applying state consumer protection laws to interstate household goods 
movers could enhance protections for consumers but may increase movers' 
and consumers' costs and may be ineffective in providing relief to 
consumers who pursue legal action against illegitimate movers. Such 
application would allow consumers to sue interstate household goods 
movers in state court and consumers could recover greater damages than 
current federal law allows. However, such application may not improve 
protection for consumers hiring illegitimate interstate movers. 
Industry representatives we contacted opposed such application, stating 
that subjecting interstate movers to states' consumer protection laws 
would increase their costs and potentially drive them out of business. 
Economic reasoning suggests that if increased regulation raises costs, 
rates charged to consumers will increase. However, some state officials 
we interviewed did not think that legitimate movers, who are already 
complying with states' consumer protection laws, would incur increased 
costs due to regulation. Finally, if state consumer protection laws 
were applied to interstate movers, it is likely that the responsibility 
for overseeing interstate movers' rates would remain with the federal 
government because all rate regulation for interstate movers is the 
responsibility of the federal government. 

Applying State Consumer Protection Laws to Interstate Movers Might 
Benefit Consumers, but Not Protect Them from Illegitimate Movers: 

Applying state consumer protection laws to interstate household goods 
movers has the potential to enhance protections for consumers. Federal 
law currently provides consumers with the options of pursuing civil 
litigation in federal court or seeking recourse through participation 
in the movers' arbitration program to resolve disputes with interstate 
household goods movers. Courts have consistently held that the Carmack 
Amendment preempts recovery in state courts against interstate movers; 
i.e., that the only remedies available for consumers are at the federal 
level, and these remedies are limited to a maximum of the replacement 
value of the goods.[Footnote 32] Applying state consumer protection 
laws to interstate movers would give consumers an alternative to the 
current options for resolving their disputes. In the six states we 
visited, state consumer protection laws allow consumers to sue 
intrastate household goods movers for unfair and deceptive trade 
practices and, in some cases, to recover compensation beyond the 
replacement value of their goods. Although general consumer protection 
laws and the standards for proving their violation vary from state to 
state, plaintiffs can often recover other compensatory or punitive 
damages in excess of the value of their goods. Officials from four of 
the six state attorneys general offices commented on the application of 
state consumer protection laws to interstate movers and told us that 
such an application would not be problematic. 

Several industry officials stated that since illegitimate movers 
operate outside of the law, the application of state consumer 
protection laws to interstate household goods movers would not 
alleviate the problem of illegitimate movers or improve consumers' 
options for recourse. According to these officials, illegitimate movers 
would not appear in court or would not have assets with which to 
compensate the consumer. We highlighted in a previous report similar 
situations in which consumers won judgments, but could not collect 
damages from illegitimate movers.[Footnote 33] 

Applying State Consumer Protection Laws to Interstate Movers Could 
Increase Movers' Costs and Increase Rates Charged to Consumers: 

A complete evaluation of a regulation should take into account benefits 
and costs to all affected parties, even if some of the effects are 
unintended. Although some consumers may benefit from increased 
protection, applying state consumer protection laws to interstate 
movers may also have some adverse consequences. In particular, moving 
companies may experience an increase in costs due to increased 
regulation. As a consequence, if movers' costs increase, then some of 
those costs may be passed on to consumers in the form of higher rates. 
While the sizes of these effects are unclear, they should be considered 
in evaluating proposals to increase consumer protection. 

Moving company and state officials expressed varied opinions about the 
cost effects of applying state consumer protection laws to interstate 
movers. Industry officials we contacted expressed concerns that 
applying state consumer protection laws to interstate movers could 
increase mover's costs. Specifically, five of the eight interstate 
moving company representatives with whom we spoke believed that it 
would be difficult to adhere to all states' consumer protection laws 
without incurring additional costs. Several moving company officials 
told us that costs associated with increased regulation could drive 
some legitimate moving companies out of business. A few industry 
officials said that such regulation may disproportionately affect 
smaller moving companies due to increased costs. In contrast, some 
state officials told us that legitimate movers would not incur 
additional expenses due to regulation. These officials stated that 
legitimate movers are already complying with the law and would, 
therefore, not face increased costs. 

Basic economic reasoning suggests that, to the extent they occur, some 
of the increased costs from increased regulation would be passed on to 
consumers. As regulations increase the cost of compliance, the 
willingness of moving companies to move household goods at the existing 
rates is likely to decrease. In addition, an increase in the costs 
movers face may decrease entry into the moving industries, and thus 
decrease the number of movers. Both of these factors would diminish 
supply and increase the prices paid by consumers for moving services. 

However, the size of the resulting rate change from the proposed 
regulation in the household goods moving industry is unclear. For one 
reason, as discussed above, it is unclear how much costs will actually 
increase. In addition, consumers may have other options for moving 
goods across state lines, which makes it difficult for movers to always 
increase rates in response to higher costs. For example, some consumers 
with smaller loads of household goods may be able to rent vans to move 
furniture themselves, or send boxes through the U.S. Postal Service or 
private companies. To the extent that these services are substitutes 
for moving services, moving companies may lose business to these other 
services if they raise rates, which constrains their ability to pass 
along costs to consumers. 

State Consumer Protection Laws Would Likely Not Regulate the Rates of 
Interstate Movers: 

It is unlikely that the application of state consumer protection laws 
to interstate movers would allow states to regulate their rates. In the 
six states we visited, laws pertaining to rates of intrastate household 
goods movers are separate from state consumer protection laws. In 
general, state consumer protection laws prohibit deceptive trade 
practices. These laws do not grant the states authority to regulate 
rates of household goods movers. Furthermore, none of the officials in 
the state attorneys general offices that responded believed such 
application would allow them to regulate the rates of interstate 
movers. A few of these officials told us that they did not desire the 
authority to regulate the rates of interstate movers. 

Conclusions: 

While FMCSA has increased its enforcement and other oversight 
activities related to interstate household goods movers, the 
effectiveness of its actions remains unclear. FMCSA's enforcement 
efforts have been taken largely in response to consumer complaints and 
have included identifying problem movers by volume of consumers' 
complaints, then investigating these movers, and issuing fines and/or 
revoking licenses as necessary. According to FMCSA, these actions have 
resulted in removing or bringing into compliance some problem movers. 
However, under this approach, the agency has focused on measuring the 
quantity of its outputs, not on the resulting outcomes, and as a 
result, has no information on the overall effectiveness of its 
enforcement actions. Without such information, FMCSA does not know 
whether or to what extent its actions are improving industry compliance 
and reducing the number of illegitimate movers. Thus, it lacks the 
information needed to determine whether it should change its 
enforcement policies to improve their effectiveness. 

FMCSA has done little to prevent illegitimate movers from entering the 
marketplace and injuring consumers, expressing concern about creating 
barriers for companies entering the marketplace. Some states, however, 
have decided that additional licensing and registration requirements 
are necessary to improve the chances of screening out illegitimate 
intrastate movers. 

With regard to aiding consumers in making informed choices, FMCSA has 
developed a Web site that provides a lot of information for consumers. 
Consumers are increasingly choosing movers over the Internet, based on 
price alone, with no knowledge of the quality of service provided. If 
consumers become aware of the information available on FMCSA's Web site 
while researching moving companies over the Internet, they may make a 
more informed choice and avoid being a victim of an illegitimate mover. 

Currently, consumers who are victimized by illegitimate movers have few 
options for redress. The effectiveness of the authority SAFETEA-LU 
granted to the states in August 2005 is unknown because states have not 
yet exercised it. It is possible that with the expiration in September 
2006, of the amendment limiting state actions, states may make use of 
this authority in the near future. If consumers were allowed to pursue 
interstate movers under state consumer protection laws, they would have 
the option to sue the interstate mover in state court. However, our 
research indicates that consumers might not materially benefit as these 
movers might not show up in court or, if the consumer should win his/ 
her case, some of these movers would not have the assets to pay the 
penalties. What seems apparent is that once a consumer has been 
victimized by an illegitimate mover, it is very difficult to repair the 
damage done both financially and psychologically. Thus, consumers would 
clearly benefit if illegitimate movers were prevented from ever 
entering the marketplace. In states that have made the holding of goods 
hostage a felony, consumers who become victims of illegitimate movers 
and have their goods held hostage can call on local law enforcement to 
come to their immediate aid. Now that SAFETEA-LU has authorized all 
states to enforce the federal provision making it a felony to hold 
goods hostage, all states could benefit from federal guidance on how to 
use this new authority. 

Recommendations: 

To enhance FMCSA's effectiveness in protecting consumers of interstate 
moves, we recommend that the Secretary of Transportation direct the 
Administrator of FMCSA to take the following three actions: 

1. Develop a strategy with performance goals and measures that 
delineates how its oversight and enforcement activities related to 
household goods movers will improve consumer protection. The strategy 
and performance goals and measures should delineate a method for 
monitoring and evaluating FMCSA's performance against set goals and 
timelines to improve consumer protection. 

2. In developing its strategy, FMCSA should assess the potential 
advantages and disadvantages, including the cost-effectiveness, for 
consumers and movers of the following: 

* Determining whether implementing additional licensing and 
registration requirements would be effective in reducing the number of 
illegitimate movers performing interstate moves, and: 

* Determining whether interstate movers should be required to place a 
Web address link to FMCSA's "Protect your Move" Web site in all their 
online advertising and place the Web address in all print advertising 
to aid consumers in making more informed decisions about choosing and 
contracting with a mover. 

3. In developing and implementing an outreach plan to enhance 
coordination and effective enforcement of federal laws and regulations 
between and among federal and state law enforcement and consumer 
protection authorities, FMCSA should include guidance to state 
officials on what is required to enable them to enforce the federal 
laws in this area, including laws regarding holding goods hostage in 
their state. 

Agency Comments: 

We sent a draft of this report to DOT and to the Federal Maritime 
Commission. DOT generally agreed with the information provided in the 
report, and both agencies provided technical clarifications, which we 
have incorporated as appropriate. DOT agreed to consider our 
recommendations. 

We are sending copies of this report to the appropriate congressional 
committees and to the Secretary of Transportation. We will also make 
copies available to others upon request. In addition, this report will 
be available at no charge on the GAO Web site at http://www.gao.gov. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-2834 or heckerj@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff that made key contributions to 
this report are listed in appendix III. 

Signed by: 

JayEtta Z. Hecker: 
Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

To determine the protections provided to consumers by federal 
regulation of interstate household goods movers, we reviewed key 
federal legislation and regulations, including the Interstate Commerce 
Commission (ICC) Termination Act of 1995, the Motor Carrier Safety 
Improvement Act of 1999, the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act--A Legacy for Users (SAFETEA-LU) legislation 
of 2005, the amendment to the 2006 transportation appropriations law, 
and the Carmack Amendment set forth in 49 U.S.C. 14706. To understand 
the Department of Transportation's (DOT) role with respect to the 
household goods industry, as delegated to Federal Motor Carrier Safety 
Administration (FMCSA), as well as the role of other federal agencies, 
including the Surface Transportation Board (STB) and the Federal Trade 
Commission (FTC), we reviewed applicable federal regulations, program 
guidance, and information provided to consumers through those agencies' 
Web sites. We also conducted semistructured interviews with 
representatives from DOT and other pertinent federal agencies, state 
regulatory and enforcement agencies, consumer groups, interstate 
movers, and mover associations--and analyzed pertinent documentation-- 
to understand how consumer protection for this industry is provided and 
to learn how well FMCSA is providing oversight and enforcement of its 
rules and regulations. To report the number of consumer complaints 
against carriers that FMCSA received, we obtained their Household Goods 
Consumer Complaint (HHGCC) database and assessed its reliability by 
interviewing knowledgeable agency officials about data collection 
processes and performing electronic testing of the data. We determined 
the HHGCC database was sufficiently reliable for the purpose of 
reporting the number of annual complaints since 2004. 

To determine the protections states provide to consumers of household 
goods moves, describe their effects on consumers and intrastate movers, 
and assess the implications of applying state consumer protections laws 
to interstate household goods movers including the potential to 
regulate rates, we made site visits to six states (California, Florida, 
Georgia, New York, Texas and Virginia). The six states that were 
selected were among the top 10 states in terms of the total number of 
complaints for calendar years 2004, 2005, and 2006. In addition, four 
of these states were reported to have had problems with interstate 
household goods movers, according to FMCSA and industry officials and/ 
or they had enacted recent legislative changes to address problems with 
household goods movers. During the site visits to the states, we 
analyzed consumer protection laws and regulations pertaining to 
household goods movers, and interviewed state agency officials, 
intrastate household goods movers, movers' associations, and local 
Better Business Bureaus to obtain their views on the potential effects 
of applying state consumer protection laws to interstate household 
goods movers and learn their processes for investigating and resolving 
complaints and conducting enforcement activities. We also interviewed 
state officials about the new authorities granted to the states by 
SAFETEA-LU. 

With respect to the information contained in appendix II, we compared 
information on FMCSA's protections for consumers of interstate 
household goods moves to the consumer protections provided by federal 
regulation of two other transportation modes, aviation and maritime. We 
chose these modes because the two federal organizations involved 
provide consumer protections involving transport of personal or 
household goods, including (1) DOT's Office of Aviation Analysis (OAA) 
and the Office of Aviation Enforcement and Proceedings (OAEP), which 
are responsible for the only other DOT transportation mode that 
promulgates extensive consumer protections and (2) the Federal Maritime 
Commission (FMC), which oversees the transport of household goods 
across oceans. We interviewed officials at these agencies and reviewed 
pertinent documentation to understand each organization's processes for 
protecting consumers, including (1) licensing and registration of 
carriers, (2) complaint investigation and resolution, and (3) 
enforcement activities. We then compared the consumer protection 
processes in OAA/OAEP and FMC with the processes used by FMCSA in 
protecting consumers of interstate household goods moves. 

Organizations Contacted: 

Federal Agencies: 

Department of Transportation: 
Federal Motor Carrier Safety Administration Headquarters: 
FMCSA Southern Service Center (Georgia): 
FMCSA Division Offices (California, Florida, Georgia, New York, Texas, 
and Virginia): 
Office of Aviation Analysis: 
Office of Aviation Enforcement and Proceedings: 
Office of Inspector General: 
Surface Transportation Board: 
Federal Maritime Commission: 

State Agencies: 

California: 
Office of the Attorney General: 
Public Utility Commission: 

Florida: 
Office of the Attorney General: 
Department of Agriculture and Consumer Services: 

Georgia: 
Office of the Attorney General: 
Public Service Commission: 

New York: 
Office of the Attorney General: 
Department of Transportation: 

Texas: 
Office of the Attorney General: 
Department of Transportation: 

Virginia: 
Office of the Attorney General: 
Department of Motor Vehicles: 

Industry Associations: 

American Moving and Storage Association: 
California Moving and Storage Association: 
Florida Movers and Warehousemen's Association: 
New York Movers' and Warehousemen's Association: 
Southwest Movers Association: 
Virginia Movers and Warehousemen's Association: 

Law Enforcement and Consumer Associations: 

National Association of Attorneys General: 
Council of Better Business Bureaus: 
The Better Business Bureau of Metro Atlanta, Athens, and Northeast 
Georgia: 
The Better Business Bureau of Metropolitan Dallas, Inc. 
The Better Business Bureau of Metropolitan New York, 
The Better Business Bureau of Northeast Florida: 
The Better Business Bureau of Northern California: 
The Better Business Bureau of Central Virginia: 

Alternative Dispute Resolution Association: 

National Arbitration Forum: 

Moving Companies: 

Adams Transfer and Storage Company:
Arnoff Moving and Storage: 
Atlantic Relocation Systems: 
Clark Moving and Storage, Inc. 
Crown Moving and Storage: 
Gabriel's Moving: 
Hilldrup Moving and Storage: 
Northstar Moving and Storage: 
Texas Moving Company, Inc. 
UniGroup, Inc. 

[End of section] 

Appendix II: Consumers of Airline Travel and Household Goods Moves 
Overseas Have Added Protections: 

In two areas, licensing requirements and resolving individual consumer 
complaints, other federal entities provide additional protections to 
airline travelers and/or consumers of household goods moves overseas, 
compared with those provided by DOT's FMCSA. Two offices within DOT-- 
OAA and OAEP--have responsibility for airline consumer protections. OAA 
is responsible for, among other things, licensing airline carriers, and 
OAEP handles consumer complaints against airline carriers. FMC is 
responsible for, among other things, licensing nonvessel-operating 
common carrier (NVOCC) overseas movers that are used to transport 
household goods and resolving consumer complaints. 

First, OAA and FMC require applicants to meet greater licensing 
requirements as compared with FMCSA. For example, both of these 
agencies require proof of financial fitness as part of the licensing 
process: airline carriers must generally submit information to OAA 
demonstrating financial fitness, while FMC requires a surety bond and 
evidence that an applicant is in good standing as a business. As 
another licensing requirement, the agencies require applicants to prove 
that management personnel possess industry experience before they 
receive a license. For example, OAA ensures that management personnel 
have an adequate background to oversee an airline before issuing a 
license, while FMC requires a minimum of 3 years experience in ocean 
transportation of goods to obtain a license. In contrast, FMCSA does 
not require applicants to meet financial fitness or management 
competency standards. The following table compares selected licensing 
requirements of FMCSA, FMC, and OAA. 

Table 5: Selected licensing requirements of FMCSA, FMC, and OAA: 

Federal agency: FMCSA; 
Requires evidence of industry experience: [Empty]; 
Requires evidence of financial fitness: [Empty]; 
Requires proof of insurance: X; 
Requires filing/publication of tariff: X. 

Federal agency: FMC; 
Requires evidence of industry experience: X; 
Requires evidence of financial fitness: X; 
Requires proof of insurance: X; 
Requires filing/publication of tariff: X. 

Federal agency: OAA; 
Requires evidence of industry experience: X; 
Requires evidence of financial fitness: X; 
Requires proof of insurance: X; 
Requires filing/publication of tariff: X. 

Source: GAO analysis of DOT and FMC laws and regulations. 

[End of table] 

Assistance in resolving individual complaints is another area in which 
additional protections are provided to consumers. For example, FMC 
responds to every consumer complaint against NVOCC overseas movers. The 
office receives 300 to 500 consumer complaints each year that require 
staff assistance. Furthermore, FMC invites consumers using its Web site 
to contact FMC with any problem the consumers might have. For consumers 
of airline services, OAEP will contact an airline carrier on behalf of 
consumers to help resolve legitimate complaints. OAEP also invites 
consumers on their Web site to file complaints by e-mail. Finally, it 
publishes monthly an Air Travel Consumer Report that lists, by carrier, 
complaints it has received; on-time performance; lost, damaged, or 
delayed baggage; and oversales[Footnote 34] information. In comparison 
to FMC and OAEP, FMCSA aids individual consumers only in hostage goods 
situations, and this aid is limited since FMCSA is unable to enforce 
the release of goods held hostage. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

JayEtta Z. Hecker, 202 512-2834 or heckerj@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Rita Grieco, Assistant 
Director; Amy Abramowitz; Ashley Alley; Benjamin Bolitzer; Jay Cherlow; 
Andy Clinton; Colin Fallon; N'Kenge Gibson; Sara Ann Moessbauer; 
Beverly Ross; Laura Shumway; and Nancy Zearfoss made key contributions 
to this report. 

FOOTNOTES 

[1] GAO, Consumer Protection: Federal Actions Are Needed to Improve 
Oversight of the Household Goods Moving Industry, GAO-01-318 
(Washington, D.C.: Mar. 5, 2001). 

[2] SAFETEA-LU, Pub. L. No. 109-59, Title IV, Sec. 4201-4305, 119 Stat. 
1751 (Aug. 10, 2005). 

[3] GAO-01-318. 

[4] SAFETEA-LU does not allow a consumer to sue an interstate carrier 
in state court nor does it allow the consumer to sue for an amount 
greater than the declared value of the transported goods, even if the 
consumer's goods are damaged or lost and the mover is at fault. 

[5] While the Congress provided DOT with the authority to regulate the 
interstate household goods moving industry, a House Committee report 
accompanying the Interstate Commerce Commission (ICC) Termination Act 
of 1995 directed DOT not to intervene and help resolve individual 
disputes. A DOT official told us that when it undertakes enforcement 
actions, it focuses on patterns of behavior (e.g., multiple complaints) 
by a carrier. 

[6] As of March 2007, this draft plan has not yet been finalized, even 
though it covers a year (2006) that is already completed. FMCSA 
officials told us that they have not yet set a date for issuing a final 
plan. 

[7] Throughout this report, we use the term "illegitimate" mover to 
include movers that are unlicensed, unregistered, or operating in an 
illegal manner. 

[8] Of the three states, only New York provided data showing a 
reduction in problems with intrastate movers subsequent to increased 
enforcement actions by the state. We did not perform any analysis of 
this data. 

[9] Council of BBB officials told us that they do not differentiate 
between interstate and intrastate movers. 

[10] The Carmack Amendment is set forth in section 14706 of title 49, 
U.S. Code. 

[11] The laws are contained in Title 49 of the U.S. Code. 

[12] In 2003, at the direction of Congress, FMCSA implemented the New 
Entrant (NE) Program. Under this program, the agency established 
partnerships with the states (allowing safety audits to be conducted by 
either a state or federal auditor) to ensure that all NE carriers 
understand their safety responsibilities and demonstrate acceptable 
safety performance before receiving permanent operating authority. U.S. 
DOT, FMCSA, Report to Congress on the New Entrant Program 
Implementation Plan, (Washington, D.C.: December 2004, p. 3). 

[13] An estimate is binding if it guarantees the total cost of the 
move. An estimate is nonbinding if the final charges are based upon the 
actual weight of the individual consumer's goods and the carrier's 
lawful tariff charges. 

[14] FMCSA published a Notice of Proposed Rulemaking on these broker 
regulations in the Federal Register in February 2007, 72 Fed. Reg. 5947 
(Feb. 8, 2007). 

[15] Pub. L. No. 109-115, Title I, § 173, 119 Stat. 2426 (Nov. 30, 
2005). 

[16] 49 U.S.C. § 14711 (2005). 

[17] Pub. L. No. 109-115, Title I, § 173, 119 Stat. 2426 (Nov. 30, 
2005). 

[18] The Surface Transportation Board (STB) was created in the ICC 
Termination Act of 1995 and is the successor agency to the Interstate 
Commerce Commission. The STB serves as both an adjudicatory and 
regulatory body and has jurisdiction over certain trucking company rate 
matters, among other duties. 

[19] GAO-01-318. 

[20] FMCSA funds and oversees this program through its Motor Carrier 
Safety Assistance Program. It is designed primarily to carry out 
enforcement activities at the state level related to truck safety. 

[21] FMCSA officials told us that currently, the Uniform Fine 
Assessment Tool, which has been used to make uniform across the states 
fines levied against trucking companies for safety violations, is not 
being used to assess fines against interstate movers. FMCSA is 
developing a uniform fine assessment tool to be applied to household 
goods movers and expects to have it completed in 2007. 

[22] FCMSA officials noted that since 2004, consumer complaints to 
FMCSA about household goods movers have declined by about 9 percent, 
from 3,631 in 2004 to 3,333 in 2006. 

[23] This Web site is www.protectyourmove.gov. 

[24] A FMCSA official told us that FMCSA's strategic plan is in final 
concurrence and a draft copy is available on the agency's Web site. 

[25] GAO, Results-Oriented Government: GPRA Has Established a Solid 
Foundation for Achieving Greater Results, GAO-04-38 (Washington, D.C.: 
Mar. 10, 2004). 

[26] GAO, Federal Motor Carrier Safety Administration: Education and 
Outreach Programs Target Safety and Consumer Issues, but Gaps in 
Planning and Evaluation Remain, GAO-06-103 (Washington, D.C.: Dec. 19, 
2005), p. 7. 

[27] FMCSA actually conducted 562 compliance reviews in fiscal year 
2006. 

[28] Statement of Todd J. Zinser, Acting Inspector General, U.S. 
Department of Transportation before the Committee on Commerce, Science, 
and Transportation, Subcommittee on Surface Transportation and Merchant 
Marine, United States Senate, May 4, 2006, Household Goods Moving Fraud 
CC-2006-044, p. 3. 

[29] On the nongovernmental side, consumers can contact the Move Rescue 
program, a nationwide network of volunteer attorneys that provides help 
with securing court orders and providing volunteer moving agents that 
send crews to pick up goods held hostage and deliver them to consumers. 
This program is endorsed by two of the large interstate moving 
companies. 

[30] CC-2006-044, p. 8. 

[31] Of the three states that told us their actions had led to improved 
conditions for consumers and legitimate movers, only New York provided 
data to substantiate this claim. We did not perform any analysis of the 
data provided by New York state. 

[32] For plaintiffs suing in federal court, the court does have the 
discretion to award reasonable attorney's fees and costs to the 
prevailing party. 

[33] Consumers have complained that, in some instances, even when they 
have won judgments against carriers in court, they have been unable to 
collect damages because the carrier has hidden its assets. GAO-01-318, 
p. 9. 

[34] Oversales occur when flights are overbooked, e.g. with boarding 
priority rules and issuing travel vouchers. 

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