AMSA ASKS DOT TO HELP CONSUMERS BY REQUIRING INTERNET HHG BROKER DISCLOSURES

ALEXANDRIA, VA - In an effort to educate and help consumers, the American Moving and Storage Association (AMSA) asked the Department of Transportation to impose requirements on household goods transportation brokers that use the Internet to market interstate moving services.

Applauding DOT's participation in the investigation that led to criminal indictments issued against
40 Florida-based scam movers, AMSA President Joe Harrison wrote to Transportation Secretary Norman Y. Mineta, urging him to strike another blow at one of the roots of the problem-questionable practices of many Internet brokers of household goods transportation services.

"Some of the movers named in the recent indictments also operate Internet websites to broker consumers' shipments," Harrison told Mineta. "Increased use of the Internet by consumers has seriously exacerbated the problems rogue movers and brokers are creating. The ever increasing number of "moving-related" websites hosted by brokers, with or without FMCSA permits, and their questionable practices, including the use of rogue movers, has resulted in countless complaints from consumers who use the Internet to locate movers."

Under the rules proposed by AMSA, all Internet HHG brokers would have to abide by the same federal regulations that apply to all other freight transportation brokers, as well as others devised to meet the unique challenges posed by the explosive growth of broker websites on the Internet medium.

The primary concept underlying the proposed regulations is disclosure, AMSA noted. "Based upon the many complaints that AMSA routinely receives, much of the present problem stems from inadequate information, lack of explanation, and/or deliberate deception and concealment. Because Internet transactions are typically covered by the cloak of anonymity, consumers often do not know with whom they are dealing, in what capacity, or how to communicate with an actual person representing the Internet broker."

The association added: "This environment is undoubtedly fostered by the lack of regulations requiring brokers to furnish the same information that movers are required to give to consumers. By hiding behind this regulatory void, brokers are able to engage in all sorts of deceptive practices so long as they meet the minimal requirements of the existing regulations."

The regulations proposed by AMSA are designed to fill the existing regulatory gap. The current regulations are passive while the proposed regulations would require brokers to act affirmatively by making specified disclosures to consumers. Importantly, AMSA emphasized, the regulations would apply regardless of the medium through which services are held out and therefore ensure that the Internet is not used as a device to avoid regulation.

Among the changes proposed by AMSA:

• The broker would be required to disclose its federal license, the capacity in which it holds itself out, and reveal its locations and a telephone number so that customers can communicate with a person. This is designed to remove the cloak of anonymity.
• Brokers could only refer shipments to federally licensed interstate movers.
• Brokers would provide information concerning the consumer's rights and responsibilities, explain carrier liability options for loss or damage, and the availability of a dispute settlement program.
• Because the vast majority of scam mover abuses involve deceptive cost estimates, brokers would have to provide a full written explanation of all charges and how they might change in the course of a move.
• A common practice of scam brokers is to demand a deposit in advance of the move, a practice that is not followed by legitimate movers. Under the AMSA proposal, the terms governing deposits and forfeitures would be fully disclosed before a deposit could be demanded.
• Because it is common for scam brokers to close down and disappear, brokers would be required to maintain a bond or trust agreement and to disclose to consumers that this is a potential avenue for recourse.
• Brokers would be responsible for reporting mover abuses and violations of the consumer protection regulations that are brought to their attention by their customers to the Federal Motor Carrier Safety Administration.

Because of the scope of the problem, the association asked Mineta to act as quickly as possible. "AMSA, Congress, and consumer groups all agree that consumer education is an important component of the overall effort to steer consumers away from utilizing rogue movers and brokers," Harrison told the DOT secretary.