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: Published: May 16, 2007. Publicly Released: May 16, 2007.

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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.

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.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To enhance FMCSA's effectiveness in protecting consumers of interstate moves, the Secretary of Transportation should direct the Administrator of FMCSA to 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.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: In 2007, we reported the Federal Motor Carrier Safety Administration (FMCSA) had not established a comprehensive strategy to fully measure the overall effectiveness of the agency's household goods enforcement and oversight efforts. We recommended that FMCSA develop a strategy with performance goals and measures that delineate 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. In response, FMCSA's FY2011 budget included a strategy, measures and performance goals to address FMCSA's household goods consumer protection responsibility. FMCSA's strategy is to address the highest risk carriers for which complaints have been received; and in addition to this risk-based approach, conduct consistent enforcement activities, national household goods strike forces, and effective outreach and education initiatives. To measure this effort, FMCSA has created a new Household Goods Commercial Review (HHG CR) Improvement Rate with specific annual goals. For example, for 2010 and 2011 the goals and timelines were to achieve an 18 percent and 20 percent improvement rate respectively. The HHG CR compares the average number of complaints received on household goods companies 12 months leading up to the time they receive a commercial review to the average number of complaints received on those same household goods companies 12 months after the same review. The performance measure represents an improvement rate in customer complaints for household goods companies that FMCSA reviewed in a given year. This new consumer protection performance measure correlates the improvement of carrier adherence to commercial regulations to the incidence of consumer complaints. FMCSA measures success in terms of fewer consumer complaints against household carriers following a commercial review intervention. As a result, the agency will be better able to measure its overall effectiveness in household goods enforcement.

    Recommendation: To enhance FMCSA's effectiveness in protecting consumers of interstate moves, the Secretary of Transportation should direct the Administrator of FMCSA to, in developing its strategy, assess the potential advantages and disadvantages, including the cost-effectiveness, for consumers and movers of (1) determining whether implementing additional licensing and registration requirements would be effective in reducing the number of illegitimate movers performing interstate moves, and (2) 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.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: Federal Motor Carrier Safety Administration (FMCSA) has developed a Web site, "Protect Your Move," that provides information to consumers on choosing a mover. In 2007 we reported that if consumers were aware of the information available on FMCSA's "Protect your Move" Web site while researching moving companies over the internet, they could improve their knowledge about how to conduct a successful move, make more informed choices and potentially avoid being a victim of an illegitimate mover. We recommended that FMCSA develop a strategy that included 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 and print advertising to aid consumers in making more informed decisions about choosing and contracting with a mover. In November 2010, FMCSA determined it has the authority to require interstate movers to place a Web address link on their online and print advertising directing consumers to the "Protect your Move" website. FMCSA plans to address the requirement through the rulemaking process. As a result of these efforts, FMCSA will enhance its effectiveness in protecting consumers by aiding them in making more informed decisions about choosing and contracting with a mover.

    Recommendation: To enhance FMCSA's effectiveness in protecting consumers of interstate moves, the Secretary of Transportation should direct the Administrator of FMCSA to, 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, 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 Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: In 2005, The Safe, Accountable, Flexible, Efficient, Transportation Equity Act-A Legacy for Users (SAFETEA-LU) mandated that the Department of Transportation develop and implement an outreach plan to enhance cooperation and enforcement of federal consumer protection laws between federal and state law enforcement and consumer protection authorities. In 2007, although the Federal Motor Carrier Safety Administration (FMCSA) hired a contractor, we reported that the agency had yet to develop the plan. We recommended the Secretary of Transportation direct the Administrator of FMCSA that in developing and implementing an outreach plan, the agency should include information such as 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. In response, FMCSA issued the "Household Goods Enforcement Assistance Outreach Plan, Report to Congress" in May 2009. In October 2009, we reported that FMCSA had begun implementing some of the action items in the plan. FMCSA had initiated work on some action items, including guidance to states on statutory and regulatory provisions that states may enforce. In addition, in October 2010 FMCSA noted that they were continuing to implement additional action items in the outreach plan. As a result of developing and implementing the outreach plan, FMCSA will be better able to enlist states and other stakeholders in the enforcement of household goods movers. .

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