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What Consumers Need to Know About HR-2928
October 16th, 2003
By Tim Walker
MovingScam.com
How can the Moving and Storage industry, already protected from being held liable for things such as fraud, extortion (hostage-freight), breach of insurance contract, breach of contract of carriage, intentional misrepresentation, negligence and more, get a better deal than it already has? It's simple, and it's called HR-2928.
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Many consumers may be aware that there are two competing bills in Congress right now (HR-1070, and HR-2928), both claiming to provide protections for consumers needing the services of a moving company, or a broker. What we've uncovered may surprise you about at least one of these bills.
We're asking for everyone to write their representatives, however we'd like consumers in the following states to pay particularly close attention because your representatives are already backing what we believe to be the wrong solution to the current problems (hold your mouse over your representative's name for contact information):
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- CA (Juanita Millender-McDonald (D), Zoe Lofgren (D), Mike Thompson (D), and Bob Filner (D))
- CT (Rob Simmons (R))
- DC (Eleanor Holmes Norton (D))
- FL (Mario Diaz-Balart (R), Alcee L. Hastings (D))
- IA (Leonard L. Boswell (D))
- IL (Timothy V Johnson(R), Jerry F. Costello (D))
- IN (Julia Carson (D), and Chris Chocola (R))
- KS (Jerry Moran (R))
- MD (Elijah E. Cummings (D))
- ME (Michael H. Michaud (D))
- MI (Peter Hoekstra (R))
- NC (Howard Coble (R), Walter B Jones, Jr (R), and Robin Hayes (R))
- NE (Doug Bereuter (R))
- NJ (Bill Pascrell Jr (D))
- NV (John Porter (R) and Shelley Berkley (D))
- NY (Sherwood Boehlert (R), Sue W Kelly (R), Charles B. Rangel(D),
Nydia M. Velazquez (D), Gary L. Ackerman (D), Jack Quinn (R), Anthony D. Weiner (D), and Timothy H. Bishop (D))
- OK (John Sullivan (R), and Earnest J Istook, Jr (R))
- OR (Peter A DeFazio (D))
- PA (Bill Shuster (R), Tim Holden (D) and Jim Gerlach (R))
- SC (James E. Clyburn (D) and Jim DeMint(R))
- TN (John Duncan (R))
- UT (Jim Matheson (D))
- VA (Jo Ann Davis (R))
- WA (Rick Larsen (D))
- WV (Shelley Moore Capito (R))
These representatives are co-sponsoring HR-2928, titled the "Consumer's Relocation Protection Act of 2003", but what this bill fails to do is to protect consumers, and in fact diminishes the limited consumer protections currently in place. How? Well, there are several flaws in the bill, but there are two major failures that render the bill ineffective.
One major problem with HR 2928 involves the issue of who can enforce what laws against the moving company. If HR-2928 passes, the moving industry will still enjoy a luxury that almost no other industry enjoys; the lack of authority for consumers and state officials, including State Attorneys General, to prosecute interstate movers under state consumer protection, fraud, and deceptive trade practices statutes. What this means for the consumer is that the consumer won't be able to sue, even in the worst cases of abuse, and recover damages beyond the "declared value" of his goods and/or the overcharge (ransom) amount. That is, consumers won't be able to collect punitive damages. Without even the mere threat of punitive damages to keep the moving industry honest, the current scams will continue to flourish.
Another major failure that HR-2928 introduces is in the amount that a consumer is liable for prior to their belonging being unloaded from the moving truck.
Two times HR-2928 provides a definition for "Holding Household Goods Hostage", and this is where the bill fails consumers. The definition is as follows:
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"the term 'holding household goods hostage' means the knowing and willful refusal to relinquish possession of a shipment of household goods described in section 13102(A)(10) upon payment of no more than 100 percent of a binding estimate (or, in the case of a nonbinding estimate, not more than 110 percent of the estimated charges for such shipment) plus the charges for additional services that were performed at origin, en route, or at destination as authorized by the shipper as required by section 13702".
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But wait you say... if the shipper has agreed to the additional charges, shouldn't the motor carrier be entitled to the amount? Absolutely, but not prior to delivery. Under current regulation, consumers are liable for additional charges that they authorize, but the consumer has an additional 30 days to pay for those services, and the motor carrier is required to unload the shippers belongings for no more that 110 percent of non-binding estimates.
Under HR-2928, consumers lose even that small privilege and the 110 percent rule is in effect removed. Also, considering the business practices that HR-2928 pretends to be protecting consumers from, it will be much easier for the scam companies to get consumers to "authorize" additional services performed "at origin, en route, or at destination" once everything the consumer owns is loaded onto the truck. Consumers are simply not in a position to "withhold authorization" for additional services once their belongings are on the truck. In essence, this definition of holding household goods hostage will have the effect of legalizing hostage freight situations, not deterring them.
HR-2928 also has other flaws, some of which are simply in its Findings section where it states why the bill is needed. Take part (4) for instance; It states that the FBI recently concluded a 2-year investigation into the practices of Florida-based unlawful operators that resulted in the indictments of 42 rogue movers, and 74 individuals involved in their operations. It goes on to state that this is agressive Federal Enforcement. Let me just clarify these misleading statements... First of all, those 42 companies that they refer to are actually only eight companies using multiple corporate aliases. And although press releases stated 74 individuals were indicted, if you actually count the names it's only 69. Of those 69, only 26 were ever detained in a U.S. Prison Facility, and at last count only 10 of those 26 are still being detained. No matter how you look at it, this is not effective enforcement.
The Findings statement goes on to say in part (5) that "Under existing Federal law, consumers have an adequate remedy to compensate them for the loss, damage, or delay of their property". It fails to mention what remedies they are talking about, and in the two years that I have been hosting this web site I haven't heard of any adequate remedies.
Getting back to what this bill actually does, I'd like to point out that HR-2928 does address criminal charges, but before any criminal charges may be filed, a carrier must be convicted on civil charges. Keep in mind that there is a huge difference between civil and criminal charges, and one should not be dependent on the other.
In regards to arbitration, this bill does clarify that a carrier must participate in an arbitration program, however it discourages consumers from utilizing this option. First of all, as a consumer you have to pay to file for arbitration. If you are unable to prove that the carrier unjustly charged you, then you (the consumer) will be liable for the attorneys fees of the carrier. From my experience, by the time that a scam company gets done with consumers, the consumer rarely has the financial ability to pay for arbitration and the fear of losing and having to pay additional fees for the moving company would simply shut down that option. What the bill also fails to address is that if a consumer is given a reward in arbitration but the company refuses to pay, how is a consumer expected to be able to collect? What penalties will the mover face for not following through on its obligations?
One last thing that I would like to point out is that this bill is backed by the very powerful moving industry lobbying organizations, and all but a few of the representatives listed above have received contributions from AMPAC, the political action committee for the American Moving and Storage Association. One of the provisions of this bill is that within 90 days of being passed, the Secretary of Transportation must set up a working group of State Attorneys General, State consumer protection administrators, and Federal and local law enforcement officials (basically for making additional recommendations). The next part states that in addition, the working group will include representatives of industries involved in the transportation of household goods. I'll give you two guesses as to who that might be. There should be no involvement by any industry representatives in a consumer protection group until they have proven that they are capable of actually looking out for the interests of consumers.
While this bill does do a good job at addressing the problems with brokers, and adding additional licensing restrictions, the bill completely fails consumers and essentially only allows the Federal, State, and Local authorities the ability to enforce licensing, and insurance problems. This falls much too short to be called anything close to a "Consumer's Relocation Protection Act". This is essentially a bill protecting moving industry carriers, and leaving consumers worse off than we currently are.
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