Household Goods Moving Industry
Progress Has Been Made in Enforcement, but Increased Focus on Consumer Protection Is Needed
GAO-10-38, 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.
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Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
- In Process
- Open
- Closed - implemented
- Closed - not implemented
Recommendations for Executive Action
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
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 capabilties 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, 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
Status: Open
Comments: GAO recommended DOT review Federal Trade Commission's(FTC) 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. FMCSA is planning to meet with representatives from the FTC's Bureau of Consumer Protection (BCP) to discuss its approach to consumer protection. FMCSA will also review BCP's approach to consumer protection law enforcement including targeted federal, state, and local task forces and its consumer education programs and outreach efforts, including reaching consumers of limited English proficiency. FMCSA will review BCP's approach to partnering with other agencies, such as state attorney's general, as well as the structure and use of the Consumer Sentinel complaints database by BCP and member law enforcement agencies. FMCSA's Office of Enforcement and Compliance will report to the FMCSA Administrator by June 2010 on any proposed changes based on this review that could potentially strengthen the Department's interstate household goods consumer protection program within existing resources.
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
Status: Open
Comments: GAO recommeded DOT 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. FMCSA concurs and is planning to develop metrics and milestones for the household goods consumer protection program by June 2010. The agency plans to work with the Household Goods Technical Assistance Group (TAG) to evaluate and strengthen stategies to improve the program. The agency anticipates completing this task by September 2010.
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
Status: Open
Comments: GAO recommended that once baseline metrics have been established for current education and outreach efforts to consumers, FMCSA should continue to assess education and outreach efforts by forming a task force made up of communication, industry and consumer protection experts to contine to monitor and make changes as appropriate to the communications strategy. DOT concurs in part. The agency will assess its education and outreach to consumers by leveraging the TAG, which is comprised of communication, industry, and consumer protection experts, rather than use limited resources to form a new task force. The agency believes that the TAG has the general subject matter expertise on household goods and consumer protection matters. Further, since its inception, the TAG has acquired significant experience in these areas. These actions will be conducted as neccessary.
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
Status: Open
Comments: GAO recommeded that DOT ensure that performance measures for the 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. DOT concurred and FMCSA has developed and implemented a performance measure for household goods, which is linked to its full range of consumer protection responsibilities. The agency now computes the household goods commercial intervention improvement rate for household goods commercial reviews conducted during the fiscal year. For example, during FY2008, FMCSA received 873 complaints in the period of 12 months before the commercial reciews were conducted. This compares to 585 complaints that were received involving those same compaines during the 12 months after the reviews were conducted. This equates to a 33 percent improvement. This performance measure tracks not only the improvement in carrier adherence to commercial regulations, but also the overall effectiveness of the household goods commercial review conducted by the agency and its partners. The agency's goal is to continue to reduce household goods complaints and improve responsiveness to household goods complaints through partnerships, education, outreach and enforcement. In 2007, the FMCSA improved the methodology it uses to manage and retrieve complaint data to better link complaints to specific carriers. Consequently, a larger number of linkages were identified. The agency established performance targets beginning in FY2010 that set a steady improvement rate to track the effectivness of household activities. FMCSA intends to increase inspections of carriers with poor safety records and poor complaint histories to help meet these targets. By coupling this risk-based approach with consistent enforcement activity, national household goods stricke forces, effective outreach, and education initiatives, overall effectivness should continue to improve. These actions fulfill the recommendation's intent.