Moving Companies To See Tighter Regulations In 2014

By Mitch Lipka

(Reuters) - Jody Phillips thought she had found the perfect mover for her relocation from Tennessee to Utah. The company's slick site, boasting of its awards for service and photos of its sharp-looking moving truck helped clinch the deal. She then paid them an initial fee of nearly $1,200.

But when it came time to move, a different company showed up, demanding another $1,200 - payment she had expected to be due on delivery. She paid. Later, with all her household goods on board, the movers called from the road and tried to get her to pay to fuel the truck. Phillips, 65, a retired Navy veteran, knew she had made a mistake.

The problem of rogue movers, which ramped up after the disbanding of the federal Interstate Commerce Commission in 1995, has remained so persistent that the U.S. Senate's Commerce Committee has been engaged in a months-long investigation to try to determine what can be done to address the problem of interstate movers who pile on charges, miss deadlines, break things and hold goods hostage.

In the interim, a bill signed into law this summer gives the federal government tools it hasn't had - offering hope for the first time that the momentum could be swinging in favor of consumers in the battle to stop rogue movers. The Federal Motor Carrier Safety Administration (FMCSA), which has but a handful of investigators nationwide who focus on policing the moving industry, will in 2014 raise the bar for those who want to get into the moving industry and will give the Department of Transportation the authority to order the release of a consumers' goods being held and to assess fines.

It has been hard to quantify the problem because there hasn't been a central place to complain. Consumers go anywhere from the federal government to local police (who generally have no jurisdiction to do anything) to complaint websites, the Better Business Bureau, consumer affairs offices or the moving industry's trade association.

The federal government estimates that of the 40 million households that relocate each year, about 600,000 of the moves involve contracting a moving company to cross state lines. And the FMCSA reports receiving 2,851 complaints about movers in 2011, an increase from the 2,440 recorded in 2010. The top categories of complaints: goods being held hostage; lost, damaged or delayed shipments; unauthorized movers; deceptive practices including overcharges and add-ons.

Legitimate movers have been lobbying to get the federal government to increase its involvement and help rid what has been a stain on the industry's reputation.

"We need to put in more roadblocks to get rid of these rogues," says Paul Oakley, senior vice president of the American Moving & Storage Association. "We need to catch more of them that are actually operating." As for the new legislation: "It's a good start."

Oakley says he'd love to see more enforcement staff and a larger commitment to consumer education than the current requirement to provide a pamphlet to those who are moving across state lines. "What we do know is more of an information dump than providing an education."

It is clear, he says, that the federal government is doing more now to try to control the problem than it has. And while complaints haven't declined, he says, he expects it takes time and the commitment will eventually pay off.

"It's a relatively small percentage of consumers that are victimized," adds Mayflower spokeswoman Melissa Sullivan. "But for those that are victims, it's so devastating."

The legal department of moving company Mayflower Transit (part of UniGroup Inc) runs an organization called MoveRescue, which provides free assistance to consumers whose goods are being held hostage. As of the end of July, MoveRescue had received 288 complaints this year - about one-third of which involved goods being held hostage.

MoveRescue, for instance, intervened for Phillips after she endured a couple of more shakedown attempts, and her things, and those of another family, were dropped off at a suburban Chicago storage facility. That was in May. This month, most of her goods were finally delivered, although she is still struggling to locate some of her things.

Phillips' case provides many examples of what consumers need to watch out for when planning an interstate move. It's easy on the internet to make something appear to be something that it isn't.

Here are some tips from MoveRescue to consider:

- Always get an in-home estimate for an interstate move. A phone or internet estimate of the cost of a move is not sufficient.

- Do not pay a deposit - particularly if a significant percentage of the total cost is demanded. It is rare that an interstate mover will request a deposit and when that does happen it's usually a nominal amount, like $100-$200.

- Take extra precautions when dealing with a moving broker, checking on their legitimacy, the terms you're agreeing to and being clear about which mover is actually handling your relocation.

Tim Walker, 42, who started the website 11 years ago after he was ripped off on a move from Virginia to Nevada, is stunned there's still a need for what he does: help warn of the dangers of rogue movers. His site collected more than 1,200 complaints in 2008 and is once again seeing that level of consumer problems.

It's about time, he says, that the federal government gets more power to help intervene on hostage moves. "It's great that they're doing something, and we've been asking for this for a long time." Still, he wants to see results before considering it a victory. "I'm just waiting for them to take action. It will be great if it happens."

(Follow us @ReutersMoney or at Editing by Beth Pinsker Gladstone and Phil Berlowitz)