Household Goods Moving Industry:

Progress Has Been Made in Enforcement, but Increased Focus on Consumer Protection Is Needed

GAO-10-38: Published: Oct 30, 2009. Publicly Released: Nov 30, 2009.

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Each year, the Federal Motor Carrier Safety Administration (FMCSA) within the Department of Transportation (DOT) receives about 3,000 consumer complaints regarding interstate moving companies: some involve egregious offenses, such as holding goods hostage. Over the years, Congress and GAO have raised concerns about the adequacy of FMCSA's oversight of the industry. As requested, GAO reviewed the (1) extent to which states have used authority in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) to take federal enforcement action against interstate movers and challenges in using that authority; (2) extent and timeliness of FMCSA's progress in its consumer protection efforts; and (3) advantages and disadvantages of options for enhancing consumer protection in the industry. GAO analyzed applicable laws and regulations; interviewed government, moving industry, and consumer protection officials; surveyed state regulatory agencies and state attorneys general; and analyzed consumer protection models.

States have not used two SAFETEA-LU provisions that permit state regulatory agencies and state attorneys general to bring a federal consumer protection action against an interstate household goods mover. The state officials GAO surveyed cited several challenges to using the provisions; for example, state regulatory agencies cited concerns about a lack of resources to bring an action and insufficient awareness of and clarity on how to use the provisions. State attorneys general reported a strong preference for wanting to use their own state laws and their own state courts to pursue interstate carriers; however, the Carmack Amendment--a statute limiting carrier liability--preempts them from doing so. FMCSA has made progress in its household goods consumer protection efforts; however, the effectiveness of these efforts is unknown and the progress has been slow. FMCSA has focused most of its efforts on improving enforcement, such as increasing the number of household goods compliance reviews, and has made limited progress in other areas of consumer protection, including consumer education and outreach, partnering with key stakeholders, and reporting and using consumer complaints data. FMCSA has been slow to implement improvements in consumer protection recommended by GAO or required by law. For example, the agency completed a study of alternative dispute mechanisms 11 years after its legislative deadline elapsed. Recent steps FMCSA has undertaken in an effort to improve its household goods program are too new for their impact to be determined. Several policy options exist for enhancing consumer protection in the interstate household goods moving industry and each has potential advantages and disadvantages. First, FMCSA could retain oversight responsibility, given that it has already invested time and resources into the effort and has recently implemented actions to improve enforcement. However, FMCSA's primary mission is safety, and the limitations in the agency's consumer protection efforts to date raise questions about its commitment to enhancing consumer protection. A second option is to create a separate office within the Office of the Secretary of Transportation (OST) similar to the Office of Aviation Enforcement and Proceedings (OAEP). OAEP focuses on consumer protection for the aviation industry, leaving safety the purview of the Federal Aviation Administration (FAA). This could be an effective model for resolving concerns about how FMCSA addresses consumer protection for the interstate household goods moving industry within its safety mission. However, given OST's structure, creating a new office would require careful consideration of organizational, legal, budgetary, and resource issues. A third option is to move this function to the Federal Trade Commission (FTC). As the nation's consumer protection agency, the FTC has the expertise to protect consumers. However, FTC has no experience or expertise with the interstate household goods industry and is currently legally prohibited from regulating common carriers, including moving companies.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In 2009, we reported that the Federal Motor Carrier Safety Administration (FMCSA) efforts to educate and provide information on household goods movers to consumers needed improvement. Many of the users of the education materials indicated that better information and technologies were needed to deliver information more effectively. Therefore we recommended FMCSA continue to assess education and outreach efforts by forming a task force made up of communication, industry, and consumer protection experts to monitor and make changes as appropriate to the communications strategy once baseline metrics have been established for its current education and outreach efforts to consumers. FMCSA updated the objectives and goals for the Household Goods Outreach and Education performance element in the agency's Fiscal Year 2011 Budget to support the new baseline metric "Household Goods Commercial Intervention Improvement Rate." FMCSA measures success in terms of fewer consumer complaints against household goods carriers following a commercial review intervention. In addition, rather than using limited resources to form a new task force, the agency leveraged the existing Household Goods Working Group to include communication, industry and consumer protection experts to assess, monitor and make appropriate changes to its communication strategy. The Household Goods Technical Assistance Group also provides support to the Household Goods Working Group in the form of recommendations and more subject matter expertise from the field. In addition, FMCSA has development a performance measure, program goal and logic model for the household goods program that clearly articulates the agency's goal for consumer protection. By articulating this goal and continuing to monitor, assess and make appropriate changes to its education and outreach efforts, FMCSA will improve its performance of its outreach and education efforts and its ability to ensure consumer protection.

    Recommendation: To improve DOT's focus on consumer protection involving household goods movers, the Secretary of Transportation should, if responsibility for the household goods program remains with FMCSA, direct the Administrator of FMCSA (or any future administrator in the department who is made responsible for the household goods program) to continue to assess education and outreach efforts by forming a task force made up of communication, industry, and consumer protection experts to continue to monitor and make changes as appropriate to the communications strategy once baseline metrics have been established for its current education and outreach efforts to consumers.

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: In 2009, we reported that the Federal Motor Carrier Administration (FMCSA) had taken a number of additional steps to improve its enforcement including establishing in 2008 a Household Goods Technical Assistance Group made up of eight household goods specialists and a field administrator as the group leader to increase coordination among its household goods specialists and to share best practices. The agency also established a "Top 100 List" in 2009 that prioritizes interstate household goods movers to target for investigation. However, because these efforts were recently implemented, it was too soon to know their impact and too early to understand whether they would be effective in enhancing consumer protections. Therefore we recommended FMCSA develop metrics and milestones for these consumer protection activities, including conducting an evaluation of the new strategy that uses the "Top 100 List" and leveraging the newly formed Household Goods Technical Assistance Group. The Department of Transportation Fiscal Year 2011 budget included the performance measure of household goods commercial review improvement rate with a target of reaching 20 percent in 2011. This metric and milestone includes Household Goods Technical Assistance Group efforts as outlined in FMCSA's household goods program goal and logic model. In 2012 FMCSA provided an evaluation of the use of the "Top 100 List" in enforcement. The evaluation included the number of carriers that were added to the list, received compliance reviews and were subject to enforcement actions from FY 2009 through FY 2011. Establishing metrics and milestones that include the Household Goods Technical Assistance Group and evaluating the "Top 100 List" will allow FMCSA to more effectively track and monitor the performance of its consumer protection activities.

    Recommendation: To improve DOT's focus on consumer protection involving household goods movers, the Secretary of Transportation should, if responsibility for the household goods program remains with FMCSA, direct the Administrator of FMCSA (or any future administrator in the department who is made responsible for the household goods program) to develop metrics and milestones for its consumer protection activities, including conducting a thorough evaluation of the new strategy based on the "Top 100 List" and leveraging the newly formed Household Goods Technical Assistance Group.

    Agency Affected: Department of Transportation

  3. Status: Closed - Implemented

    Comments: In 2009 we found the Federal Motor Carrier Safety Administration's (FMCSA) priority was the agency's safety mandate and more focus was needed to address consumer protections in the agency's household goods program. The Federal Trade Commission is a model for consumer protection efforts and could provide FMCSA with insights into overseeing the interstate household goods moving industry. Therefore we recommended FMCSA review the Federal Trade Commission's approach to consumer protection and make changes to its interstate household goods efforts. In response, FMCSA met with Federal Trade Commission officials and reviewed the Bureau of Consumer Protection's (BCP) approach to consumer protection law enforcement, including targeted federal, state, and local task forces and its consumer education programs and outreach efforts. Officials from FMCSA began meeting with Federal Trade Commission officials in June 2010 and issued a memo outlining the results of their review in October 2011. As a result of FMCSA's review, the agency applied and was accepted as a member of the Federal Trade Commission's Consumer Sentinel Network that gives FMCSA access to a consumer protection information sharing network that includes a complaint database, a directory of legal and investigative contacts, and a network that allows communications among members on specific investigations. In addition, officials from FMCSA learned and applied some of the Federal Trade Commission's investigative techniques. By applying methods learned from the Federal Trade Commission's approach to consumer protection, FMCSA will increase its ability to ensure consumer protections and improve the performance of its household goods program.

    Recommendation: To improve DOT's focus on consumer protection involving household goods movers, the Secretary of Transportation should, if responsibility for the household goods program remains with FMCSA, direct the Administrator of FMCSA (or any future administrator in the department who is made responsible for the household goods program) to review FTC's approach to consumer protection and make changes in the department's interstate household goods consumer protection efforts, where applicable, to clearly articulate the department's goal of ensuring consumer protection within its mission.

    Agency Affected: Department of Transportation

  4. Status: Closed - Not Implemented

    Comments: The U.S. Department of Transportation does not concur with the recommendation to evaluate whether to move FMCSA's interstate household goods program to a separate office within the Office of the Secretary (OST). With few exceptions, OST is primarily a policy oriented body dedicated to advising the Secretary and managing the Department and its programs. OST lacks programmatic operational capabilities and the field office staff and structure that would be necessary to effectively implement the household goods consumer protection program. While FMCSA is dedicated to motor carrier safety, it offers national programming and field office structure and staff and the regulatory leverage that is necessary to effectively address household goods industry oversight. As a result, FMCSA offers the best available location within the Department's existing organizational structure to address the consumer protection function.

    Recommendation: To improve DOT's focus on consumer protection involving household goods movers, the Secretary of Transportation should evaluate whether to move the interstate household goods program to a separate office within OST, and if a decision is made to move the program, request all necessary authority and resources from Congress to do so.

    Agency Affected: Department of Transportation

  5. Status: Closed - Implemented

    Comments: In 2009, we reported that the Federal Motor Carrier Safety Administration (FMCSA) had fallen short in its consumer protection efforts by not establishing a comprehensive strategy or adequate performance measures and by not implementing adequate outreach to or coordination with federal and state law enforcement and regulatory officials. FMCSA officials told us that the agency had recently developed a performance measure of household goods effectiveness that as of September 2009, was under review by the Office of Management and Budget (OMB) for inclusion in FMCSA's fiscal year 2011 budget and updated strategic plan. FMCSA officials did not provide us with the details of the measure (e.g., how "improvements" would be defined and measured) since it was still under review by OMB, and we were thus unable to assess its appropriateness. In our view, any performance measures in this area would need to be clearly linked to FMCSA's full range of consumer protection responsibilities involving the household goods moving industry--including enforcement; education and outreach; establishing and maintaining partnerships; and collecting, monitoring, and reporting complaints. Therefore we recommended DOT ensure performance measures for household goods efforts are clearly linked to FMCSA's full range of consumer protection responsibilities involving the household goods moving industry including enforcement, establishing and maintaining partnerships, education and outreach, and collecting data and reporting on consumer complaints. In response, DOT updated their household goods performance measures in the FY 2011 budget to include a household goods commercial review improvement rate with a target of reaching 20 percent in 2011. In 2012, the agency documented how the performance measure linked to the full range of its household goods moving industry consumer protection responsibilities--including enforcement, establishing and maintaining partnerships, education and outreach, and collecting data and reporting on consumer complaints--by creating a household goods program goal to "contain and prevent deceptive practices in the interstate household goods industry protecting the consumer." The agency linked the goal to the range of consumer responsibilities through a logic model that identified resources, activities, outputs, outcomes and impacts that would contribute to the household goods program goal and performance measures. The development of performance measures, program goal and logic model for the household goods program that clearly outlines how FMCSA's addresses household goods consumer protection responsibilities will allow the agency to better track and monitor the effectiveness of its consumer protection efforts.

    Recommendation: To improve DOT's focus on consumer protection involving household goods movers, the Secretary of Transportation should, if responsibility for the household goods program remains with FMCSA, direct the Administrator of FMCSA (or any future administrator in the department who is made responsible for the household goods program) to ensure that performance measures for household goods efforts are clearly linked to FMCSA's full range of consumer protection responsibilities involving the household goods moving industry--including enforcement, establishing and maintaining partnerships, education and outreach, and collecting data and reporting on consumer complaints.

    Agency Affected: Department of Transportation

 

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