Article Website: https://norton.house.gov/media/press-releases/norton-ezell-introduce-bipartisan-bill-strengthen-consumer-protections-against

NORTON, EZELL INTRODUCE BIPARTISAN BILL TO STRENGTHEN CONSUMER PROTECTIONS AGAINST FRAUD INVOLVING RESIDENTIAL MOVING COMPANIES

May 22, 2024

Press Release

WASHINGTON, D.C. – Congresswoman Eleanor Holmes Norton (D-DC) and Congressman Mike Ezell (R-MS) today introduced a bipartisan bill to equip the Federal Motor Carrier Safety Administration (FMCSA) with the necessary tools protect consumers from fraud perpetrated by scammers in the interstate transportation of household goods. The bill was written to address a growing type of fraud involving entities that charge an up-front fee, pack and hold consumers’ household goods, then demand more funds to deliver or release the items. The companies involved have launched websites with fake 5-star reviews, and when negative reviews are submitted, the scammers simply close down the existing companies and open new ones, repeating the original scheme under a new FMCSA license.

The bill has been endorsed by the Transportation Intermediaries Association (TIA), American Trucking Associations’ Moving & Storage Conference (ATA-MSC), Owner-Operator Independent Driver Association (OOIDA), the National Association of Small Trucking Companies (NASTC), Commercial Vehicle Safety Alliance (CVSA), Institute for Safer Trucking (IST) and Road Safe America.

“FMCSA receives thousands of complaints every year from Americans who are the victims of fraud in the shipment of household goods by licensed entities,” Norton said. “This bill would provide FMCSA with explicit authority to assess civil penalties for violations of commercial regulations, and crucially, to withhold registration from applicants failing to provide verification details demonstrating they intend to operate legitimate businesses. Americans moving across state lines need to be able to have confidence in FMCSA-licensed companies transporting their physical belongings, and I’m proud to introduce this bill with Rep. Ezell to strengthen protections.”

“The Household Goods Shipping Consumer Protection Act works to address illegal practices in the shipping and moving industry that ultimately undermine consumer trust and harm our nation’s supply chain,” Congressman Ezell said. “Holding these fraudulent actors in the transportation sector accountable will not only protect individuals but also benefit trustworthy companies and their employees. I am glad to co-author this critical initiative to stop fraud and establish greater law and order in our economy.”

“TIA applauds Congresswoman Norton and Congressman Ezell for introducing the Household Goods Shipping Consumer Protection Act,” said Anne Reinke, President and CEO of the Transportation Intermediaries Association (TIA). Combating fraud through effective legislation is imperative for the protection of brokers, motor carriers, shippers, consumers, and the integrity of the economic system. Fraudulent activities not only cause significant financial losses but also undermine public trust in institutions and markets. By implementing strong anti-fraud laws, governments can ensure a more stable and predictable economic environment, which is essential for sustainable growth and investment. This legislation achieves these goals by implementing several key provisions to reinforce the federal government’s role in combating fraud,” stated Anne Reinke, President and CEO of the Transportation Intermediaries Association (TIA).

“We commend Congresswoman Eleanor Holmes Norton and Congressman Mike Ezell for taking this step to help combat moving fraud and protect consumers from becoming victims of scams,” said American Trucking Associations’ Moving and Storage Conference Executive Director Ryan Bowley. “Their legislation would provide FMCSA and other enforcement officials with additional tools to act against scam companies. By rooting out unscrupulous bad actors, Americans will be able to have greater confidence that the moving professionals they entrust with their valuable possessions are experienced, honest, and reliable.”

“Freight fraud committed by criminals and scam artists has been devastating to many small business truckers simply trying to make a living in a tough freight market”; Todd Spencer, President of the Owner-Operator Independent Drivers Association said. “OOIDA and the 150,000 small business truckers we represent applaud Representative Holmes Norton and Representative Ezell for their bipartisan leadership to provide FMCSA better tools to root out fraudulent actors, which are also harmful to consumers and highway safety. Because of the broad industry support for these commonsense reforms, we hope this bipartisan legislation will move through the Transportation and Infrastructure Committee without delay.”

“The National Association of Small Trucking Companies commends the Household Goods Shipping Consumer Protection Act, and we thank Representatives Norton and Ezell for their leadership on the freight fraud issue,” David Owen, President, National Association of Small Trucking Companies said. “This bedeviling epidemic continues to plague the trucking industry. Therefore, NASTC is happy to support this legislation. It takes steps to ensure that fraudulent brokering by criminals and criminal enterprises gets caught and held accountable. This bill requires a tangible place of business to register, which should help disrupt the many frauds who exploit the ability to run and constantly shift their brokering fraud schemes solely online. NASTC looks forward to working with these lawmakers to move this bill forward.”

This week, FMCSA launched the “Operation Protect Your Move” initiative to address complaints about scams involving interstate household goods movers and brokers.

Norton’s introductory statement follows.

Statement of Congresswoman Eleanor Holmes Norton on the Introduction of the Household Goods Shipping Consumer Protection Act

May 22, 2024

Today, I introduce the Household Goods Shipping Consumer Protection Act. This bill would give the Federal Motor Carrier Safety Administration (FMCSA) more authority to protect consumers from fraud in the interstate transportation of household goods. Specifically, this bill would give FMCSA the authority to assess civil penalties against unregistered shippers and against entities that hold consumers’ personal goods hostage, give FMCSA the express authority to reimburse states for enforcing federal consumer protection laws related to the transportation of household goods, and establish requirements to ensure that motor carriers, brokers and freight forwarders that seek registration are operating legitimate businesses. Representative Mike Ezell is co-leading this bill with me.

FMCSA receives thousands of complaints every year from Americans who are the victims of fraud in the shipment of household goods. Fraudsters have launched moving companies with fake 5-star online reviews to draw in customers, intending to overcharge customers or hold their personal goods hostage until an additional fee is paid. After receiving negative reviews, fraudsters would open a new moving company under a new name and a new FMCSA license. FMCSA lacks the authority to prevent and punish these types of fraud. In 2019, a Department of Transportation Administrative Law Judge (ALJ) ruled that FMCSA lacks authority to assess civil penalties for violations of commercial regulations and registration requirements, including unauthorized brokerage and for failure to return household goods to consumers. Under current law, as interpreted by the ALJ’s decision and final agency order, FMCSA may not assess civil penalties for violations of commercial regulations. Instead, the Department of Justice must initiate an action in federal court. This bill would reverse the ALJ’s decision and provide explicit authority for FMCSA to adjudicate and assess civil penalties for unfair business practices and consumer protection violations, as well as give FMCSA authority to enforce roadway safety regulations against fraudsters.

This bill would also provide explicit authority to FMCSA to withhold registration from any applicant that fails to provide a valid principal place of business or disclose common ownership with any other registered entities at the time of registration. Household goods carriers, brokers and freight forwarders have registered with addresses where no legitimate operations take place, often designating their official address as a retail
package store, vacant parking lot or business address unrelated to the registered entity. FMCSA already requires motor carriers to designate a principal place of business and disclose common ownership. However, FMCSA may only take enforcement action after the entity is already registered and refuses to cooperate with investigations at the designated address.

This bill would also permit states to use Motor Carrier Safety Assistance Program and High Priority program funding to conduct commercial regulatory and consumer protection standard reviews and enforcement actions against household goods motor carriers, brokers and freight forwarders. It would also clarify that states may retain the penalties and fines imposed in proceedings relating to violations of household goods statutes and regulations. These provisions would support states in their efforts to protect the American people from predatory practices.    

I urge my colleagues to support this bill.

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