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entitled 'Household Goods Moving Industry: Progress Has Been Made in
Enforcement, but Increased Focus on Consumer Protection Is Needed'
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
October 2009:
Household Goods Moving Industry:
Progress Has Been Made in Enforcement, but Increased Focus on Consumer
Protection Is Needed:
GAO-10-38:
GAO Highlights:
Highlights of GAO-10-38, a report to congressional committees.
Why GAO Did This Study:
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.
What GAO Found:
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.
What GAO Recommends:
DOT should evaluate whether to move the household goods program to OST
and address problems with FMCSA’s consumer protection efforts. DOT and
FTC agreed with the information in this report, and DOT agreed to
consider the recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-10-38] or key
components. For more information, contact Susan Fleming at (202) 512-
2834 or flemings@gao.gov.
[End of section]
Contents:
Letter:
Background:
States Have Not Brought an Action Against Any Interstate Household
Goods Mover Using SAFETEA-LU Authority and Cited Several Challenges to
Doing So:
While FMCSA Has Made Some Progress in Its Consumer Protection Efforts,
the Effectiveness of These Efforts Is Unknown and Implementation Has
Been Slow:
Three Options to Enhance Consumer Protections in the Interstate
Household Goods Moving Industry Have Potential Advantages and
Disadvantages:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: Number and Type of Consumer Complaints about Household
Goods Movers Received by FMCSA, by Category, Fiscal Years 2001 through
2008:
Appendix III: Results from GAO Surveys of State Regulatory Agencies and
State Attorneys General:
Appendix IV: Comparison of Consumer Protection Efforts in Three
Organizations Reviewed by GAO:
Appendix V: Types of Consumer Protection Activities:
Appendix VI: Comments from the Federal Trade Commission:
Appendix VII: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Challenges to Using SAFETEA-LU Authority Cited by State
Regulatory Agencies in Responding to Our Survey:
Table 2: Challenges to Using SAFETEA-LU Authority Cited by State
Attorneys General in Responding to Our Survey:
Table 3: FMCSA's Reviews and Enforcement Actions for Household Goods
Movers, Fiscal Years 2001 through 2008:
Table 4: Length of Time It Has Taken FMCSA to Implement Our
Recommendations and the Mandates Enacted in SAFETEA-LU:
Table 5: Organizations Whose Officials Were Interviewed:
Table 6: State Attorneys General and State Regulatory Agencies We
Surveyed to Determine Use of SAFETEA-LU Provisions:
Figures:
Figure 1: Number of Consumer Complaints for 2008 and Location of
FMCSA's Household Goods Specialists:
Figure 2: Selected Steps in the Household Goods Consumer Complaint
Processes of Four Organizations:
Abbreviations:
ACPD: Aviation Consumer Protection Division:
AMSA: American Moving and Storage Association:
BBB: Better Business Bureau:
DOT: Department of Transportation:
FAA: Federal Aviation Administration:
FMCSA: Federal Motor Carrier Safety Administration:
FMCSR: Federal Motor Carrier Safety Regulations:
FTC: Federal Trade Commission:
ICC: Interstate Commerce Commission:
NCCDB: National Consumer Complaint Database:
OAEP: Office of Aviation Enforcement and Proceedings:
OST: Office of the Secretary of Transportation:
SAFETEA-LU: Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users:
STB: Surface Transportation Board:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
October 30, 2009:
The Honorable John D. Rockefeller IV: Chairman:
The Honorable Kay Bailey Hutchison:
Ranking Member:
Committee on Commerce, Science, and Transportation:
United States Senate:
The Honorable Frank R. Lautenberg:
Chairman:
The Honorable John Thune:
Ranking Member:
Subcommittee on Surface Transportation and Merchant Marine
Infrastructure, Safety, and Security:
Committee on Commerce, Science, and Transportation:
United States Senate:
Consumer protection in the interstate household goods moving industry--
a small but unique industry governed by complex federal laws and
regulations--has been of significant interest to Congress since the
breakup of the Interstate Commerce Commission (ICC) in 1995. Consumers
who hire interstate household goods movers must rely primarily on
federal oversight and enforcement of the household goods moving
industry for consumer protection because it is one of the few
industries in which states are limited in their role to protect
consumers using state consumer protection laws and other state laws.
Furthermore, the household goods moving industry is one where the
Federal Trade Commission (FTC), the nation's consumer protection
agency, does not have authority to protect consumers against unfair or
deceptive acts or practices or unfair methods of competition.[Footnote
1] For the last decade, the Federal Motor Carrier Safety Administration
(FMCSA) within the Department of Transportation (DOT) has had
responsibility for protecting consumers involved in interstate
household goods moves. It exercises this responsibility by issuing
regulations, conducting oversight activities, and taking enforcement
actions.[Footnote 2]
We and Congress have raised concerns over the years about the adequacy
of FMCSA's oversight of the interstate household goods moving industry,
including FMCSA's efforts to collect and track complaint information
and conduct education and outreach activities that would effectively
protect consumers. Since 2001, we have reported that although some
progress has been made, FMCSA has 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.[Footnote 3] In 2005, a number of provisions in
the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU)[Footnote 4] were enacted, in part, to
address some of these concerns. In particular, two SAFETEA-LU
provisions gave states (state regulatory agencies and state attorneys
general) the authority to enforce DOT-delineated federal household
goods consumer protection laws and regulations against interstate
household goods movers.[Footnote 5] By using this authority, states can
assist FMCSA in carrying out its consumer protection enforcement
efforts. In light of continuing interest, this report addresses the
following:
* the extent to which states have used the SAFETEA-LU provisions that
allow states to enforce federal household goods consumer protection
laws and regulations, and any challenges to using the provisions;
* the extent and timeliness of progress made by FMCSA in its consumer
protection efforts; and:
* options for enhancing consumer protection in the federal oversight of
the household goods moving industry, and the advantages and
disadvantages of those options.
To address these issues, we analyzed federal and state laws and
regulations related to the household goods moving industry, reviewed
pertinent documentation and interviewed a wide array of officials from
federal and state agencies, the moving industry, and consumer
protection organizations. To determine the extent to which states are
using two SAFETEA-LU provisions that provided them with authority to
enforce federal household goods consumer protection laws and
regulations, we surveyed state regulatory agencies[Footnote 6] in the
42 states and the District of Columbia that regulate intrastate
household goods movers and state attorneys general in each of the 50
states and the District of Columbia.[Footnote 7] To better understand
FMCSA's household goods consumer protection efforts, we contacted or
met with officials in FMCSA's headquarters and six field offices
located in California, Colorado, Florida, Illinois, New Jersey, and
Texas. We chose the six field offices based on the volume of complaints
against movers in those states, the presence of household goods
specialists in those offices, and recommendations from FMCSA
headquarters staff. Finally, to understand potential options for
enhancing consumer protection in the household goods moving industry,
we reviewed two models of consumer protection: FTC's Bureau of Consumer
Protection and DOT's Office of Aviation Enforcement and Proceedings
within the Office of the Secretary of Transportation (OST). These
models were chosen because of the relevance of their consumer
protection activities.
We conducted this performance audit from November 2008 through October
2009 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives. (See
appendix I for further details about our scope and methodology.)
Background:
According to FMCSA, approximately 4,800 interstate moving companies
transport the household goods of 1.6 million Americans who move across
state lines each year. While the total number of companies is
substantial, they constitute a small percentage of the approximately
720,000 interstate commercial carriers engaged in all aspects of
interstate commerce.
FMCSA's mission is focused on reducing crashes, injuries, and
fatalities involving large trucks and buses; however, in 1999 the
agency was also given oversight responsibility for consumer protections
involving interstate household goods movers. FMCSA's oversight
activities for interstate household goods movers include collecting
complaint data, enforcing compliance with economic and consumer
protection laws and regulations, and providing consumer education and
outreach.
According to its fiscal year 2010 budget request, FMCSA applies less
than 1 percent of its budgetary resources (including a small number of
staff) toward oversight of the interstate household goods moving
industry. Overall, FMCSA has approximately 1,100 full-time employees
located in its headquarters facilities in Washington, D.C., and within
its field office structure. The field office structure consists of 4
service centers and 52 division offices--1 in each state, Puerto Rico,
and the District of Columbia. Across this nationwide organizational
structure, FMCSA has assigned 14 of its 1,100 staff to oversee the
interstate household goods moving industry--5 staff in headquarters and
9 staff in field offices. Among the 9 field staff, 8 are household
goods specialists who investigate household goods consumer complaints.
Of the existing 8 household goods specialists, only 1 specialist
dedicates 100 percent of his time to household goods enforcement, while
the remaining 7 are also responsible for enforcing safety regulations
on interstate motor carriers. Additionally, 128 of the 255 safety
investigators in FMCSA's field offices throughout the country have
taken household goods training and can assist in household goods
enforcement. Figure 1 shows the distribution of consumer complaints
received by FMCSA against interstate household goods movers, juxtaposed
with the location of FMCSA's household goods specialists in fiscal year
2008. As the figure shows, for the most part, FMCSA has household goods
specialists located in the states with the highest number of
complaints.
Figure 1: Number of Consumer Complaints for 2008 and Location of
FMCSA's Household Goods Specialists:
[Refer to PDF for image: U.S. map and data]
Alabama: 24;
Alaska: 2;
Arizona: 82;
Arkansas: 18;
California: 452 (location of FMCSA's Household Goods Specialists: 2);
Colorado: 36;
Connecticut: 49;
Delaware: 9;
District of Columbia: 19;
Florida: 358 (location of FMCSA's Household Goods Specialist);
Georgia: 106;
Hawaii: 6;
Idaho: 12;
Illinois: 101;
Indiana: 23;
Iowa: 9;
Kansas: 14;
Kentucky: 15;
Louisiana: 13;
Maine: 12;
Maryland: 7;
Massachusetts: 68;
Michigan: 74;
Minnesota: 20;
Mississippi: 7;
Missouri: 23;
Montana: 4;
Nebraska: 9;
Nevada: 66;
New Hampshire: 12;
New Jersey: 114 (location of FMCSA's Household Goods Specialists: 2);
New Mexico: 19;
New York: 221 (location of FMCSA's Household Goods Specialist);
North Carolina: 89;
North Dakota: 3;
Ohio: 71;
Oklahoma: 20;
Oregon: 30;
Pennsylvania: 84;
Rhode Island: 5;
South Carolina: 38;
South Dakota: 1;
Tennessee: 22;
Texas: 165 (location of FMCSA's Household Goods Specialist);
Utah: 24;
Vermont: 5;
Virginia: 77 (location of FMCSA's Household Goods Specialist);
Washington: 78;
West Virginia: 8;
Wisconsin: 25;
Wyoming: 1.
Sources: FMCSA; GAO; and Map Resources (base map).
[End of figure]
FMCSA receives about 3,000 complaints against interstate household
goods movers per year,[Footnote 8] including complaints about estimates
and final charges, problems with the pickup and delivery of goods, and
loss and damage of goods (see appendix II for further details on the
number and type of complaints received from fiscal year 2001 through
fiscal year 2008). Complaint data are received and managed in FMCSA's
National Consumer Complaint Database (NCCDB). Consumers primarily file
complaints through FMCSA's "Protect Your Move" Web site and its toll-
free hotline.
There are some organizations with which complaints against interstate
household goods movers can be lodged and possibly resolved without ever
being filed directly with FMCSA. For example, organizations such as
MoveRescue, the Better Business Bureau (BBB), and the American Moving
and Storage Association (AMSA) receive consumer complaints about
interstate household goods movers and attempt to resolve them by
working directly with the moving companies and consumers or through an
arbitration program. BBB, for example, received nearly 9,000 complaints
against both interstate and intrastate household goods movers in 2008,
and AMSA received 300 complaints against interstate movers in
2008.[Footnote 9] BBB and AMSA both have arbitration programs to help
consumers resolve complaints, while MoveRescue provides information on
consumers' rights and responsibilities and attempts to intervene
directly on behalf of consumers in recovering goods. Figure 2 depicts
the processes by which a consumer complaint may be filed and resolved.
Consumers may file complaints concurrently with any of these entities
and the information may or may not be shared directly with FMCSA. For
example, BBB does not share complaint information directly with FMCSA,
AMSA notifies FMCSA when it is removing a carrier from its membership,
and MoveRescue may ask FMCSA to intervene if a mover is unwilling to
negotiate the return of a consumer's goods being held "hostage."
[Footnote 10]
Figure 2: Selected Steps in the Household Goods Consumer Complaint
Processes of Four Organizations:
[Refer to PDF for image: illustration]
Federal Motor Carrier Safety Administration (FMCSA):
* Consumer files complaint with FMCSA against a mover via its Web site
or hotline.
* If FMCSA determines the complaint is valid and within its purview,a a
letter is sent to the carrier explaining the complaint.
* Complaint could trigger one of two federal enforcement investigations
against the mover.
* FMCSA may perform a household goods review on the mover.
* FMCSA may perform a safety compliance review on the mover.
* FMCSA may close the case with or without enforcement.
American Moving and Storage Association (AMSA):
* AMSA receives complaint via phone, e-mail, or letter and forwards to
mover. Mover has 15 days to respond to the complaint.
* If complaint is not resolved, AMSA helps start arbitration.
* If a carrier has a pattern of consumer abuse or fails to observe the
requirement to enter into arbitration or to pay an arbitration award,
AMSA removes the carrier from its membership and its ProMover program
and notifies FMCSA of the action it has taken.
* Mover may opt to resolve complaint with consumer to avoid going
through arbitration.
Better Business Bureau (BBB):
* After BBB receives a complaint, staff have 2 weeks to obtain response
from household goods mover and respond to the consumer.
* Local BBB offers the parties its dispute resolution services. Some
household goods movers may decline to use the BBB process and instead
use the AMSA program.
* Parties agree to BBB-sponsored mediation and/or arbitration.
* The BBB process may take up to 60 days to address and resolve the
complaint.
MoveRescue:
* After MoveRescue receives complaint, consumer must share moving
paperwork with MoveRescue for review.
* MoveRescue contacts mover.
* If mover is responsive and willing, a solution is achieved and
consumer’s household goods are returned.
* MoveRescue will try to mediate if dispute continues.
* If mover is unresponsive or unwilling to negotiate, MoveRescue will
ask FMCSA to intervene (see FMCSA process).
* If mover is an AMSA member, complaint is turned over to AMSA (see
AMSA process).
Source: GAO analysis of organizations’ complaint processes.
[A] FMCSA refers any household goods rate or overcharge complaints to
the Surface Transportation Board, which has jurisdiction over certain
trucking company rate matters.
[End of figure]
Among the consumer complaints lodged against interstate household goods
movers, some of the most egregious and traumatic involve complaints
about goods held hostage.[Footnote 11] In 2008, FMCSA received nearly
3,000 complaints, of which 730 involved goods being held hostage. As we
reported in 2007, movers that hold goods hostage are often illegitimate
operators or "rogue movers"; they may be in business only for a short
time under any given name; and they may shut down their business and
set up operations under a new name.[Footnote 12] Consumers have little
access to assistance in these situations, and when the move is
interstate, the only federal agency with oversight responsibility is
FMCSA. If it can locate the company, FMCSA may seek a temporary
restraining order or injunctive relief (i.e., a court order to prevent
a carrier from engaging in a specific action) against a carrier that is
suspected of operating illegally. Additionally, if a consumer's goods
are being held hostage at the time the consumer calls FMCSA for
assistance, it is possible an investigator will attempt to get those
goods released, though this is done at the discretion of the
investigator.[Footnote 13] FMCSA does not intervene on behalf of an
individual consumer, because the agency was directed by Congress when
enacting the ICC Termination Act of 1995 not to intervene in resolving
individual complaints.[Footnote 14] Instead, FMCSA's enforcement
approach is to review complaint data to identify moving companies with
a pattern of complaints and target them for investigation.
FMCSA's primary enforcement tool for ensuring consumer protection
involving interstate household goods movers is commonly known as a
household goods review of economic and consumer protection regulatory
requirements. These reviews address, among other things, a mover's
liability, tariffs, advertising, and arbitration program, as well as
documentation it provides to consumers--including publications, moving
estimates, and bills of lading.[Footnote 15] Historically, household
goods reviews have usually been conducted when a carrier receives more
than 10 complaints.[Footnote 16]
They are also conducted during strike forces, which occur for a period
of 2 weeks once a year.[Footnote 17] In addition, FMCSA may conduct
safety compliance reviews[Footnote 18] on interstate motor carriers,
including interstate household goods movers, to assess compliance with
safety regulations that address areas such as testing drivers for
alcohol and drugs, insurance coverage, crashes, driver qualifications,
driver hours of service, vehicle maintenance and inspections, and
transportation of hazardous materials. Not all commercial motor
carriers receive safety compliance reviews. FMCSA is only able to
conduct safety compliance reviews on a very small percentage of
carriers because of the size of the motor carrier industry and the
available resources to conduct reviews. Interstate household goods
movers can receive a household goods review, a safety compliance
review, or both and these reviews can be completed by one of the
household goods specialists. In 2008, FMCSA conducted 630 household
goods reviews and 387 safety compliance reviews on interstate household
goods movers.[Footnote 19] If a mover is found to be noncompliant,
FMCSA has a variety of actions it may take, including issuing orders to
compel compliance, imposing civil monetary penalties, or suspending or
revoking a mover's operating authority. As a regulatory agency, FMCSA
does not have authority to arrest movers that violate the criminal
provisions applicable to household goods moves, such as holding goods
hostage;[Footnote 20] it refers appropriate cases to the DOT Office of
Inspector General, which conducts additional investigation before
referring cases to the U.S. Attorneys' Office for potential
prosecution.
Since 2001, we have raised concerns about FMCSA's oversight of the
interstate household goods moving industry and made recommendations
that FMCSA, for example, enhance its education and outreach by reaching
out to consumer and industry groups as well as state governments,
collect and monitor data on consumer complaints, and develop a
strategy, with performance goals and measures, that delineates how
FMCSA's oversight and enforcement activities related to household goods
movers will improve consumer protection. To address the concerns we and
others have raised, a number of provisions were enacted in SAFETEA-LU
in 2005 to enhance protections for consumers who hire interstate
movers.[Footnote 21] Two of these provisions provided states with the
authority to enforce federal household goods consumer protection laws
and regulations (as designated by DOT) against interstate household
goods carriers, as follows[Footnote 22]:
* The first provision gives state regulatory agencies the authority to
bring federal consumer protection actions against interstate household
goods carriers in either state or federal court and specifically allows
the state to retain any fines or penalties imposed on a carrier (see 49
U.S.C. § 14710).
* The second provision gives state attorneys general, acting "on behalf
of the state's residents," the authority to bring federal consumer
protection actions against interstate household goods carriers in
federal court only. The provision is silent as to whether the state may
retain penalties imposed on a carrier (see 49 U.S.C. § 14711).
The statutory authority contained in the two SAFETEA-LU provisions
[Footnote 23] was designed to augment federal resources[Footnote 24]
and provides states with a federal enforcement tool, as states are
preempted by the Carmack Amendment from bringing their own actions
against interstate household goods movers in state court using state
laws.[Footnote 25] The Carmack Amendment, a federal civil liability
statute enacted in 1906, which sets limitations on carrier liability,
[Footnote 26] broadly covers a variety of industries, including the
household goods moving industry.
States Have Not Brought an Action Against Any Interstate Household
Goods Mover Using SAFETEA-LU Authority and Cited Several Challenges to
Doing So:
States have not used the 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,[Footnote 27] according to federal agency information and results
from our survey. First, for any action initiated by a state under these
SAFETEA-LU provisions, the state must serve written notice to either
DOT or the Surface Transportation Board (STB).[Footnote 28] Officials
from both these agencies told us that they had not received notice of
any state filing such an action, as required by law. Second, none of
the 40 state regulatory agencies or the 39 state attorneys general
responding to our survey indicated that they had used these two SAFETEA-
LU provisions.[Footnote 29]
The state officials we surveyed identified a variety of challenges to
bringing federal consumer protection actions using the SAFETEA-LU
authority,[Footnote 30] including resource constraints and a preference
for using state courts, among other challenges[Footnote 31] (see
appendix III for the complete results of our surveys of state
regulatory agencies and state attorneys general). About two out of
every five of those state regulatory agencies responding noted
insufficient resources as a challenge to using SAFETEA-LU, whether they
file the action in state or federal court[Footnote 32] (see table 1).
This was something that officials we interviewed from the four
regulatory agencies also underscored.[Footnote 33] As a result, using
limited state resources to bring federal consumer protection actions
against interstate movers may not be a top priority for some state
regulatory agencies, particularly in the current economy. In addition,
a lack of clarity on how to apply SAFETEA-LU and a lack of awareness of
this SAFETEA-LU authority were among the most frequent challenges to
bringing an action cited by state regulatory agencies.[Footnote 34]
Table 1: Challenges to Using SAFETEA-LU Authority Cited by State
Regulatory Agencies in Responding to Our Survey:
Challenge: Insufficient resources to prosecute the case(s) in federal
court;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in federal court: 15;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in state court: 16.
Challenge: Lack of clarity on how to apply the SAFETEA-LU authority;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in federal court: 13;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in state court: 15.
Challenge: Lack of awareness of SAFETEA-LU authority;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in federal court: 9;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in state court: 10.
Challenge: Lack of familiarity with the federal court system;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in federal court: 8;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in state court: Not applicable.
Challenge: State regulatory agency prefers to bring action in state
courts;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in federal court: 6;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in state court: Not applicable.
Challenge: State consumer protection laws provide stronger penalties;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in federal court: 1;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in state court: 1.
Challenge: Other;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in federal court: 10;
Number of state regulatory agency respondents who cited challenge:
Challenges to using provision in state court: 8.
Source: GAO survey of state regulatory agencies.
Notes: Forty of the 43 state regulatory agencies that have
responsibility for oversight of intrastate household goods movers
responded to our survey.
State regulatory agencies responding to our survey were able to choose
more than one response to the survey questions.
Other challenges cited by respondents included limited resources and
issues regarding the state authority granted to the state regulatory
agency.
[End of table]
State attorneys general cited a different set of challenges to bringing
a federal household goods consumer protection action under SAFETEA-LU
(see table 2). Unlike state regulatory agencies, state attorneys
general are authorized by SAFETEA-LU to bring these actions in federal
court only.[Footnote 35] Just over half of the state attorneys general
responding to our survey identified a challenge to bringing actions
under SAFETEA-LU that is related to this statutory constraint--a
preference of state attorneys general for bringing actions in state
courts. In addition, the same number of state attorneys general cited
two additional obstacles: that the fines and penalties imposed on a
carrier only benefit the federal government, not the states,[Footnote
36] and that state consumer protection laws provided stronger penalties
than those available under SAFETEA-LU.
Table 2: Challenges to Using SAFETEA-LU Authority Cited by State
Attorneys General in Responding to Our Survey:
Challenge: State attorneys general office prefers to bring action in
state courts;
Number of state attorneys general respondents who cited challenge: 20.
Challenge: State consumer protection laws provide stronger penalties;
Number of state attorneys general respondents who cited challenge: 20.
Challenge: Financial remedies under SAFETEA-LU benefit the federal
government, not the state;
Number of state attorneys general respondents who cited challenge: 20.
Challenge: Lack of awareness of the SAFETEA-LU authority;
Number of state attorneys general respondents who cited challenge: 10.
Challenge: Insufficient resources to prosecute the case(s) in federal
court;
Number of state attorneys general respondents who cited challenge: 7.
Challenge: Lack of clarity on how to apply the SAFETEA-LU authority;
Number of state attorneys general respondents who cited challenge: 7.
Challenge: Other challenge;
Number of state attorneys general respondents who cited challenge: 3.
Source: GAO survey of state attorneys general.
Notes: Thirty-nine of the 51 state attorneys general responded to our
survey.
State attorneys general responding to our survey were able to choose
more than one response to the survey questions.
Other challenges cited by respondents included stronger penalties under
state law, potential for expedited relief using state law, and the
inability of the state to retain fines and penalties.
[End of table]
Our survey results indicate that many state attorneys general would
prefer to bring actions against interstate household goods movers in
their own state courts using state laws--a position they have
previously expressed. In 2004, 48 state attorneys general signed a
letter to Congress that indicated support for a proposed bill that
would have amended the Carmack Amendment to provide states with the
authority to enforce their own consumer protection laws and regulations
against interstate household goods carriers in state courts, among
other things.[Footnote 37] State attorneys general prefer their own
state consumer protection laws, which provide, for example, consumer
restitution, injunctive relief, and penalties against businesses that
engage in deceptive practices--remedies not available to them under
federal law. The National Association of Attorneys General also noted
during our interviews that state attorneys general preferred to bring
cases in a familiar court system.
However, as we noted earlier in this report, states are constrained
from enforcing state consumer protection laws against interstate
household goods carriers by the broad scope of federal preemption under
the Carmack Amendment, which courts have ruled preempts bringing an
action in state court under state consumer protection laws, among other
state laws.[Footnote 38] Because preemption is a judicial determination
made in different jurisdictions throughout the country, courts
interpret the reach of the Carmack Amendment differently. Nonetheless,
courts have consistently interpreted the Carmack Amendment very broadly
in this context to preempt most, if not all, state civil actions.
[Footnote 39] Although the reach of the Carmack Amendment is a judicial
determination, the scope of the law is a construction of Congress and
can be amended or repealed; however, amendment or repeal of the law
would likely cause consequences in the moving industry and may cause a
rippling effect in a number of other industries covered by the long-
standing Carmack Amendment.[Footnote 40]
As a result of the broad scope of preemption under the Carmack
Amendment, the only option states have to take an action against an
interstate household goods mover is under the authority provided in
SAFETEA-LU. However, no state has used this authority since SAFETEA-
LU's enactment in 2005. The wide variety of challenges state regulatory
agencies and state attorneys general cited to using the SAFETEA-LU
provisions raises questions about whether states will use this
authority moving forward to help augment, as Congress desired, federal
enforcement against interstate household goods carriers. With the
states playing little, if any role, enforcement of consumer protection
laws related to the interstate household goods moving industry rests
solely with FMCSA.
While FMCSA Has Made Some Progress in Its Consumer Protection Efforts,
the Effectiveness of These Efforts Is Unknown and Implementation Has
Been Slow:
FMCSA Has Made Some Progress in Enhancing Consumer Protection; However,
the Effectiveness of These Efforts Remains Unknown:
Since we issued our 2001 report,[Footnote 41] FMCSA has taken several
steps to enhance consumer protection in the household goods moving
industry, making some progress in each of four categories of consumer
protection: (1) enforcement, (2) establishing and maintaining
partnerships, (3) education and outreach, and (4) collecting data on,
monitoring, and reporting on consumer complaints.[Footnote 42] In
particular, FMCSA has increased its oversight and enforcement
activities against illegitimate interstate movers. However, much of the
agency's progress in all four areas of consumer protection has been
made at the behest of Congress or us, rather than through the agency's
own initiative or as a result of its own assessments of ongoing
efforts. Furthermore, even when the agency implemented mandates and
some of our recommendations, the success of these efforts has varied,
and although FMCSA performed a onetime assessment of its enforcement
activities in 2004, the effectiveness of many of the efforts is
generally unknown, as discussed below.
Enforcement: Much of FMCSA's progress in its consumer protection
efforts has been through enhancing its enforcement of interstate
household goods movers. For example:
* In response to our 2001 report, FMCSA reviewed its enforcement
process and conducted a onetime assessment of its interstate household
goods enforcement program in 2004 to help determine staffing needs.
FMCSA increased its resources for household goods enforcement from 5
staff and approximately $300,000 in 2001 to 14 staff and $3.1 million
requested for fiscal year 2010. In addition, since 2004 the agency has
trained 128 safety specialists in household goods investigation
techniques, and these specialists may be called upon to assist in
household goods reviews.
* FMCSA has also enhanced its enforcement of interstate household goods
movers through the use of strike forces, which focus on states that
have reported a high number of complaints about household goods movers.
Strike forces bring together FMCSA and state law enforcement officials
to make site visits to the carriers that have generated the greatest
number of complaints. As we reported in 2007, approximately 90 percent
of complaints were generated in six states--Florida, New York, New
Jersey, California, Texas, and Illinois--and FMCSA has targeted strike
force activity in these problem states.
* In 2005, the agency began setting goals for completing household
goods reviews,[Footnote 43] and it has surpassed these goals each year.
FMCSA has also steadily increased the number of enforcement actions
against household goods movers and the number of movers that it has put
out of service, as shown in table 3.
Table 3: FMCSA's Reviews and Enforcement Actions for Household Goods
Movers, Fiscal Years 2001 through 2008:
FMCSA actions: Household goods review[A,B];
2001: 13;
2002: 20;
2003: 30;
2004: 52;
2005: 386;
2006: 570;
2007: 499;
2008: 630.
FMCSA actions: Safety compliance review[B,C];
2001: 13;
2002: 20;
2003: 30;
2004: 52;
2005: 381;
2006: 562;
2007: 412;
2008: 387.
FMCSA actions: Enforcement actions;
2001: 5;
2002: 11;
2003: 6;
2004: 12;
2005: 46;
2006: 72;
2007: 94;
2008: 105.
FMCSA actions: Amount fined;
2001: $78,000;
2002: $481,000;
2003: $396,180;
2004: $150,360;
2005: $312,120;
2006: $467,905;
2007: $931,944;
2008: $743,663.
FMCSA actions: Amount collected;
2001: $61,500;
2002: $226,000;
2003: $40,180;
2004: $56,910;
2005: $245,420;
2006: $323,775;
2007: $334,830;
2008: $230,541.
FMCSA actions: Household goods carriers put out of service[D];
2001: 1;
2002: 5;
2003: 1;
2004: 3;
2005: 11;
2006: 7;
2007: 203;
2008: 241.
Source: GAO analysis of FMCSA's household goods reviews, safety
compliance reviews, and enforcement actions.
[A] Household goods reviews are regulatory reviews of household goods
carriers using the five commercial parts of the Federal Motor Carrier
Safety Regulations (FMCSR)--49 C.F.R. Parts 366 (Designation of process
agent), 370 (Principles and practices for the investigation and
voluntary disposition of loss and damage claims and processing
salvage), 371 (Brokers of property), 375 (Transportation of household
goods in interstate commerce; consumer protection regulations), and 377
(Payment of transportation charges). Unlike safety compliance reviews,
household goods reviews do not result in the carrier receiving a rating
of satisfactory, unsatisfactory, or conditional.
[B] According to FMCSA, matching review numbers for fiscal years 2001
through 2004 may indicate that the only household goods reviews that
were completed during this period were in conjunction with
comprehensive safety compliance reviews.
[C] Safety compliance reviews are performed on household goods carriers
to assess their compliance with the safety-related regulations in the
FMCSR. This type of review can result in a carrier's receiving a rating
of satisfactory, unsatisfactory, or conditional.
[D] Household goods carriers can only be put out of service for failing
a safety compliance review or for not paying fines.
[End of table]
While FMCSA has focused much of its efforts on enforcement--by
increasing household goods reviews and assessing penalties on household
goods movers--it is unknown if the enforcement tools are effective in
protecting consumers or are a sufficient deterrent to illegal
operators. For instance, household goods reviews may not identify some
of the most egregious violators--illegitimate movers, sometimes called
rogue movers--that intend to operate illegally and often do not have
actual physical locations or file the appropriate paperwork. Officials
told us that these moving companies can be the most difficult to target
because a household goods review cannot be conducted if the specialist
is unable to locate the company or its principals. Thus, these illegal
moving companies continue to operate and take advantage of consumers
without consequences. Furthermore, while FMCSA may assess civil
monetary penalties for violations of household goods regulations found
during household goods reviews, the agency has not used other legal
options, such as seeking court orders to stop regulatory violations
(injunctions). According to FMCSA officials, the agency relies on
financial penalties over other options. Officials also explained that
another more severe penalty--putting a household goods mover out of
service--is only available to them for safety violations or when a
carrier does not pay its fines. For some moving companies operating
illegally, the fine may not be a sufficient threat. Some FMCSA
officials that we spoke with told us that because the agency is not a
law enforcement agency and does not have arrest authority or the
ability to take custody of a consumer's goods in hostage goods
situations, it relies on the threat of a substantial federal fine.
Field officials we interviewed indicated that relying on civil
penalties can be limiting if companies are intent on holding goods
hostage or operating illegally. For example, one official told us that
the agency had imposed a fine on a carrier for holding a consumer's
goods hostage, but instead of paying the fine the company went out of
business and reconstituted itself under a different name.[Footnote 44]
FMCSA has taken a number of additional steps to improve its
enforcement, but it is too soon to know their impact and too early to
understand whether they will be effective in enhancing consumer
protections. They include the following:
* October 2008: FMCSA created the Household Goods Technical Assistance
Group--made up of the 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. Since its
formation in 2008, the Household Goods Technical Assistance Group has
only met once.
* April 2009: FMCSA added household goods moving companies to its New
Applicant Screening (NAS) process for newly registered motor carriers
that is aimed at identifying "chameleon" carriers--those movers that
are potentially evading FMCSA enforcement and continuing to operate
under a different registration. The NAS uses a tool, known as the
Evasion Detection Algorithm, for identifying potential chameleon
carriers from records in other FMCSA databases, including the Motor
Carrier Management Information System (MCMIS).[Footnote 45]
* June 2009: FMCSA created a "Top 100 List" that prioritizes interstate
household goods movers to target for investigation. This process rates
carriers based on their safety profiles in MCMIS. As part of the new
Top 100 List strategy, FMCSA officials also issued a policy memorandum
to division administrators on how to use the list to target their
investigations.
Establishing and maintaining partnerships: FMCSA's coordination with
federal, state, and local stakeholders has included one major
initiative launched in 2006--establishing the Household Goods Working
Group--which was required under SAFETEA-LU.[Footnote 46] The working
group is made up of representatives from state regulatory agencies and
state attorneys general and a representative from the National
Association of Attorneys General. The attendance from states is
voluntary with, on average, 2 to 3 states represented at each meeting,
and as many as 10 states participating in one meeting. The working
group has two mandated objectives: (1) develop practices and procedures
to enhance federal-state partnerships and (2) make legislative and
regulatory recommendations to the Secretary of Transportation
concerning enforcement efforts. The working group has received mixed
reviews--based on our interviews with FMCSA officials and working group
participants. Some said that having direct contact between states and
FMCSA was beneficial in facilitating the exchange of information on
investigations, enforcement actions, and states' efforts to intervene
on behalf of consumers; others said that the group was not inclusive
and its participants had different objectives depending on their role,
which made it difficult to keep all parties interested and focused on
working group objectives. Consequently, the group experienced dwindling
participation, did not complete work on its second objective, and has
no plans to do so in the future.
To address its first objective, the working group developed a plan to
enhance federal-state partnerships that FMCSA issued in May 2009--the
Enforcement Assistance Outreach Plan. The plan includes a number of
actions to enhance FMCSA's enforcement through partnering with the
states. In particular, the plan notes that FMCSA will (1) make its own
enforcement information more widely available, (2) work with states to
encourage increased consumer reporting to FMCSA's NCCDB so that the
database contains all relevant complaints against household goods
movers, (3) develop procedures to begin the sharing of federal and
state enforcement information, and (4) provide additional training on
how to use its various databases and publish instructions on how to
access its database containing information on household goods carriers'
enforcement and compliance history, licenses, and insurance. While this
plan seeks to enhance enforcement and improve consumer protections
through strengthening partnerships, the plan lacks details and, apart
from an overall 2-year completion time frame, lacks specific timelines
for completing action items. Also, the plan has yet to be implemented,
and it is therefore too early to know the effectiveness of these
efforts. Finally, although the working group also attempted to address
the second objective to make legislative and regulatory recommendations
to Congress, it encountered a number of obstacles. According to some
working group members, participants representing state regulatory
authorities did not feel that they had the authority or the legal
expertise to discuss legislative changes on behalf of their states.
Furthermore, because of interest on the part of state attorneys
general, the working group attempted to develop proposed changes to
SAFETEA-LU, but could not reach consensus on the language, so efforts
to propose legislative changes were tabled. FMCSA officials
acknowledged that efforts to propose legislative and regulatory changes
slowed the momentum of the working group.
Education and outreach: Following our 2001 report, FMCSA took a number
of steps to educate and conduct outreach to consumers--providing
information to state consumer and law enforcement agencies and national
consumer organizations identifying the agency as the entity responsible
for interstate household goods enforcement and providing general
information to consumers. The agency provided online access to Your
Rights and Responsibilities When You Move, a publication that moving
companies were required by regulation to provide to consumers before
executing orders for a shipment of household goods,[Footnote 47] and
created a Web site, "Protect Your Move," to provide information to
consumers. The Web site is also available in Spanish. According to
FMCSA, since its launch, the Web site has had more than 15 million
visits, with an average of about 11,600 hits a day and an average visit
lasting 12 minutes. The agency also created a toll-free complaint
hotline and a portal on FMCSA Web site through which consumers can file
complaints against interstate household goods movers and obtain public
results of the department's enforcement cases through press releases.
While these efforts were initial steps in educating and reaching out to
consumers, more recently stakeholders have criticized the usefulness of
these tools. For example, AMSA developed a position paper calling for
better education and better technologies to deliver information to
consumers. Additionally, AMSA noted that because of the volume of
documents and complexity of the information consumers need when hiring
a moving company--such as contracts, insurance requirements, and
regulations--FMCSA should make the information easier for consumers to
digest. In addition, some of the stakeholders we interviewed indicated
that the "Protect Your Move" Web site was not adequately accessible nor
was it easy to search for particular information. Furthermore,
participants in the household goods working group acknowledged that the
Web site in general was poorly laid out. FMCSA officials told us that
they have recently completed a baseline assessment of their outreach
efforts to consumers, focusing on processes and organizational
improvements as well as effectiveness in reaching target audiences.
Those officials said that they plan to release a report on their
findings once the report has been internally reviewed and approved for
public release. FMCSA is also developing a Household Goods
Communication Plan to educate the public about household goods moving
fraud. According to agency officials, the goals of this plan are to
educate consumers about the typical moving practices in the household
goods moving industry and their rights and responsibilities in a
household goods moving situation, and to develop internal and external
partnerships for educating consumers. FMCSA officials told us that they
intend to complete the plan and anticipate implementing it in fiscal
year 2010.
Collecting data on, monitoring, and reporting on complaints: In late
2002, FMCSA implemented what it considers one of its major consumer
protection enhancements when it began collecting information on
consumer complaints and centralizing it within the NCCDB. FMCSA
considers the database an important consumer protection tool to help
identify patterns of complaints against movers and to obtain additional
information for investigations. The database information is shared
across division offices and headquarters and is also available to the
public in limited form. While the database is used internally by FMCSA
staff, it is still not being actively used by states to assist in
enforcement efforts. According to FMCSA, only seven states have asked
for and gained secure access[Footnote 48] to the database, and very few
use it regularly for their own investigations. State users of the
database we spoke with said that part of the challenge to states making
regular use of the database is their lack of access to underlying
complaint records and backup documents, such as mover licensing
applications and log books. Furthermore, many states we surveyed
reported that the volume of complaints in their states was too low to
warrant filing suit using their SAFETEA-LU authority,[Footnote 49]
although if state regulatory authorities and attorneys general are not
accessing the database, it is unclear if states have full information
about the number of consumer complaints. Finally, the database captures
complaints that come directly to FMCSA, but not necessarily complaints
lodged with other entities.
FMCSA Has Been Slow to Implement Recommended and Mandated Consumer
Protection Improvements:
Within the last year, FMCSA has initiated a number of activities,
including the Household Goods Technical Assistance Group, aimed at
bolstering its consumer protection efforts. In addition to the
activities FMCSA initiated, we have made 12 recommendations since 2001
and six mandates were enacted as part of SAFETEA-LU in 2005 to help the
agency strengthen its household goods consumer protection efforts (see
table 4). When FMCSA's actions were completed within a year, they
usually involved a onetime effort on the part of FMCSA--such as its
2001 household goods symposium--or were relatively simple to undertake-
-such as publicizing results of its enforcement efforts. However, FMCSA
was slow to implement the recommendations and mandates, and in eight of
those actions, FMCSA either has taken more than 5 years to implement
them or has not yet fully implemented the actions. In one particularly
striking example--involving both a legislative requirement and a
subsequent recommendation we made that FMCSA complete a study of
arbitration, which household goods movers, as a condition of
registration, are required to offer consumers as a means of settling a
dispute--FMCSA completed the report 11 years after its legislative
deadline elapsed and more than 7 years after we recommended that the
agency complete the report.[Footnote 50] In addition, in 2001 we
recommended that FMCSA make publicly available information on the
number and general nature of complaints made against individual
carriers. Despite completing a centralized complaint database in 2002,
FMCSA did not make its NCCDB available to the public until April 2007--
6 years after we made our recommendation. Furthermore, because the
database has gone through changes over the last 7 years (e.g., the
current database contains more detailed categories of information), it
is difficult to reliably discern any trends in the consumer complaint
information at this time.
Table 4: Length of Time It Has Taken FMCSA to Implement Our
Recommendations and the Mandates Enacted in SAFETEA-LU:
March 2001 report recommendation:
Recommendation/mandate: Ensure division offices consistently collect,
maintain, and share consumer complaint information;
Time to implementation: More than 1 year to 3 years.
Recommendation/mandate: Publicize information on number and nature of
complaints against individual carriers;
Time to implementation: More than 5 years.
Recommendation/mandate: Reach out to consumers, consumer and industry
groups, and state governments using Internet postings and other means;
Time to implementation: One year or less: [Check].
Recommendation/mandate: Publicize results of FMCSA enforcement cases;
Time to implementation: One year or less: [Check].
Recommendation/mandate: Notify state consumer and law enforcement
agencies and national consumer organizations of FMCSA's authority in
the interstate household goods moving industry;
Time to implementation: One year or less.
Recommendation/mandate: Assess whether household goods carrier
enforcement activities are effective and sufficient;
if not, increase enforcement actions as outlined in FMCSA's plan;
Time to implementation: More than 3 years to 5 years.
Recommendation/mandate: Undertake and complete congressionally mandated
study of alternative dispute mechanisms (particularly arbitration).[A];
Time to implementation: More than 5 years.
Recommendation/mandate: Determine if legislative changes are needed to
supplement FMCSA's efforts, including authorizing states to enforce
federal statutes and regulations and changing the federal statute
limiting carriers' liability;
Time to implementation: More than 3 years to 5 years.
SAFETEA-LU mandate (2005):
Recommendation/mandate: Form a working group to develop a plan to
enhance federal-state partnerships and to make legislative or
regulatory recommendations to the Secretary of Transportation.[B];
Time to implementation: More than 1 year to 3 years.
Recommendation/mandate: Develop a procedure to forward complaint
information to appropriate state authorities[C];
Time to implementation: Not fully implemented: [Empty].
Recommendation/mandate: Establish a database and provide for public
access[C,D];
Time to implementation: More than 1 year to 3 years.
Recommendation/mandate: Establish regulations to require movers to
submit quarterly reports on the number of shipments during the
reporting period, the number and type of complaints registered with the
company, and specific information on claims[C];
Time to implementation: Not fully implemented: [Empty].
Recommendation/mandate: Place Your Rights and Responsibilities When You
Move handbook on DOT's Web site[C];
Time to implementation: One year or less.
Recommendation/mandate: Modify broker regulations requiring the broker
to provide the shipper with the broker's DOT number, FMCSA's handbook,
and a list of carriers used by the broker and a statement that the
broker is not a motor carrier[C];
Time to implementation: Not fully implemented: [Empty].
May 2007 report recommendation:
Recommendation/mandate: In developing and implementing an outreach plan
to enhance coordination and enforcement of federal laws and regulations
between federal and state law enforcement and consumer protection
authorities, include guidance to state officials on what is required to
enable them to enforce the federal laws;
Time to implementation: More than 1 year to 3 years.
Recommendation/mandate: Determine whether FMCSA's "Protect Your Move"
Web site link must be included in all interstate movers' online
advertising;
Time to implementation: Not fully implemented: [Empty].
Recommendation/mandate: Determine whether additional licensing and
registration requirements would help reduce number of illegitimate
interstate household goods carriers;
Time to implementation: Not fully implemented: [Empty].
Recommendation/mandate: Develop strategy with performance goals and
measures delineating how oversight and enforcement activities will
improve consumer protection, including a method for monitoring and
evaluating performance against set goals and timelines;
Time to implementation: Not fully implemented: [Empty].
Source: GAO analysis of information in its recommendation follow-up
system and in FMCSA documents.
[A] While we made this recommendation in 2001, the study was originally
mandated by the ICC Termination Act of 1995.
[B] SAFETEA-LU mandated that this action be taken within 90 days of
enactment.
[C] SAFETEA-LU mandated that this action be taken within 1 year.
[D] This was also a recommendation made in our 2001 report.
[End of table]
Among the recommended actions that were partially completed or not
completed at all are the following:
* FMCSA has not implemented the requirement in the 2005 SAFETEA-LU
legislation that it develop a procedure for forwarding complaint
information to appropriate state authorities within 1 year of SAFETEA-
LU's enactment.
* FMCSA has three proposed rules at various stages in the rulemaking
process that would address recommendations or mandates--require movers
to submit quarterly reports, strengthen broker regulations, and provide
additional licensing requirements--but these rules have languished
within FMCSA. Comment periods have been closed for more than a year on
two of the rules, and the deadline for publishing one for comment has
slipped by approximately 6 months. In addition, to address whether a
link to FMCSA's "Protect Your Move" Web site must be included in all
interstate movers' online advertising, FMCSA plans to propose a rule to
its Senior Rulemaking Committee. While these efforts could strengthen
consumer protection efforts, FMCSA officials told us that addressing
household goods rulemaking was a lower priority relative to the
agency's rulemaking priorities as a whole.
In summary, while FMCSA has taken some steps to improve consumer
protection, primarily in the enforcement area, the effectiveness of
these efforts remains unknown, as the agency has not conducted any
ongoing assessment of its programs. While FMCSA has primarily
concentrated its efforts on improving enforcement, it has not
adequately addressed the other elements of consumer protection. In
addition, the time frames under which FMCSA has chosen to act on
recommendations made by us and on mandates contained in SAFETEA-LU have
been very slow, raising questions about the priority of those efforts
within the agency.
Three Options to Enhance Consumer Protections in the Interstate
Household Goods Moving Industry Have Potential Advantages and
Disadvantages:
To identify potential options for enhancing consumer protections in the
interstate household goods moving industry, we reviewed a range of
models.[Footnote 51] Based on our preliminary review of those models
and input from consumer and industry stakeholders, we narrowed our
final review to three options with varying approaches:
* Retain oversight of the interstate household goods moving industry
with FMCSA through its existing household goods program. The program
would remain with FMCSA, with DOT and FMCSA making a stronger
commitment to enhancing consumer protection.
* Create a separate office within the Office of the Secretary of
Transportation (OST) similar to the Office of Aviation Enforcement and
Proceedings (OAEP). This option would entail creating an office similar
to OAEP, but focused on interstate household goods consumer protection.
* Relocate oversight of the household goods moving industry to FTC.
Under this option, FTC would oversee the interstate household goods
moving industry in addition to the other industries for which it
provides consumer protection.
Each of these three options involves different approaches and has the
potential to enhance oversight of the household goods moving industry
(see appendix IV for a more detailed comparison of the three
organizations we reviewed in developing the options). However,
regardless of the approach, the problems with the current program that
were previously discussed will need to be addressed.
FMCSA Could Retain Oversight Responsibility, but Concerns about the
Existing Program Raise Questions about the Agency's Level of Commitment
to Consumer Protection:
Retaining oversight of the interstate household goods moving industry
with FMCSA provides some advantages since the agency currently has
oversight authority, experience, and an extensive field presence. Since
assuming responsibility for oversight of the interstate household goods
moving industry, FMCSA has devoted some efforts to and invested some
resources in administering the program. As discussed earlier in this
report, the agency has committed staff in both headquarters and the
field and provided training and resources to conduct enforcement
activities. It has also made strides in enhancing enforcement efforts
and some progress in the other consumer protection areas. Furthermore,
as noted earlier, FMCSA has recently taken additional actions to
further improve interstate household goods enforcement.
Another potential advantage to keeping the household goods program with
FMCSA is that FMCSA has other program responsibilities that may provide
the agency with some efficiencies in overseeing the interstate
household goods moving industry. For example, FMCSA establishes
requirements and standards for commercial motor vehicles and their
drivers involved in interstate transportation, giving the agency some
expertise and systems that may help support efforts in overseeing the
household goods moving industry. In particular, FMCSA is responsible
for licensing and registering commercial motor vehicles with a DOT
number.[Footnote 52] A DOT registration number serves as a unique
identifier when collecting and monitoring a company's safety
information acquired during audits, compliance reviews, crash
investigations, and inspections--providing FMCSA access to information
that could have bearing on the moving company's fitness to operate as
an interstate carrier. Furthermore, FMCSA's New Entrant Safety
Assurance Process--which is designed to inform newly registered motor
carriers (new entrants) about motor carrier safety standards and
regulations to help them comply with FMCSA requirements--may provide an
additional opportunity for FMCSA to reinforce its consumer protection
requirements with interstate household goods moving companies. FMCSA
visits new carriers within their first 18 months of operations to
explain safety requirements and review documentation as part of a
"safety audit."[Footnote 53] Finally, FMCSA's network of safety data
systems provides additional useful information on a motor carrier's
safety record that may be helpful for consumer protection enforcement
purposes. Though the data are safety driven, they provide important
links to interstate household goods moving companies that may be
violating commercial motor vehicle regulations and possibly consumer
protection regulations. For example, MCMIS captures information on
inspections, crashes, safety compliance reviews, safety audits, and
registration data from other FMCSA data systems.
FMCSA's efforts to date, however, also highlight some major
disadvantages to having the agency retain responsibility for protecting
consumers in the interstate household goods moving industry. As noted
in the previous section of this report, FMCSA has been slow to improve
its oversight of the interstate household goods moving industry, and
the effectiveness of many of its efforts is unknown. The agency's
slowness in improving oversight and limited progress in some areas of
consumer protection may stem from the agency's focus on safety--
something we heard from several senior FMCSA officials during our audit
work.
FMCSA's agencywide focus on safety is reflected in both the attitudes
and actions of many of FMCSA's senior headquarters and field staff who
have responsibility for ensuring consumer protections involving the
interstate household goods moving industry. Many of FMCSA headquarters
officials we interviewed told us that while the agency was obligated to
provide oversight of the household goods moving industry, safety is the
agency's priority (as Congress intended),[Footnote 54] not consumer
protection--giving the impression that they viewed their latter
responsibilities as less of a priority. One of those officials noted
that even though some draft household goods regulations were
languishing, given the backlog of rulemaking for safety efforts,
finalizing household goods regulations would be secondary to finalizing
safety-related rules. In our interviews with field staff who carry out
FMCSA's household goods enforcement activities, both division
administrators and the household goods specialists we interviewed said
that although FMCSA was tasked with enforcing interstate household
goods regulations, they viewed its primary responsibility as ensuring
commercial vehicle safety and their priority in focusing their
enforcement resources was safety, not consumer protection. Many of the
field staff indicated that household goods enforcement activities are
very time-and resource-intensive. Household goods specialists we
interviewed indicated that investigating complaints against rogue
movers or dealing with hostage goods situations can often take weeks.
For example, according to one household goods specialist, household
goods investigations can be in depth and include building a case and
gathering evidence against a company. While some of the field staff we
spoke with said that they had no problem balancing their enforcement
efforts involving household goods consumer protection activities with
their safety activities, some felt that stronger FMCSA leadership was
needed to make clear that the agency valued the time spent on consumer
protection. For example, some field staff commented that FMCSA
headquarters officials had not provided them with sufficient guidance
and direction to pursue household goods enforcement efforts, and those
field staff observed reluctance on the part of the agency to focus on
interstate household goods consumer protection efforts.
Another disadvantage to retaining the household goods program in FMCSA
is that FMCSA's written mission statement and supporting documentation,
along with Congress's intent for the agency, may not adequately address
its responsibilities for consumer protection involving the interstate
household goods moving industry. FMCSA's primary mission is safety--to
reduce crashes, injuries, and fatalities involving large trucks and
buses--a valid and important mission that carries out the will of
Congress. Most of the agency's staff, initiatives, programs, and
training revolve around meeting the agency's safety mission, with the
agency spending about 92 percent of its budgetary resources on reducing
crashes resulting in injuries and fatalities.[Footnote 55] DOT
officials told us that they believe their budget requests and
activities involving the household goods moving industry are consistent
with expectations, given the relative proportion of those activities to
FMCSA's broader programs on safety. Furthermore, officials said that
while FMCSA's household goods activities have increased over the years,
the agency's responsibility to meet its safety mission and goals has
also increased. According to a senior FMCSA official, even if the
agency were provided with additional resources, the resources would be
used to support its safety mission, not household goods consumer
protection activities.[Footnote 56]
FMCSA's fiscal year 2010 budget request and associated strategic
planning documents also indicate that the agency has not adequately
built its consumer protection responsibility into its mission going
forward. Although the budget request identifies five agency strategic
goals in support of its mission--Safety, Productivity, Security, Global
Connectivity, and Organizational Excellence[Footnote 57]--consumer
protection is not one of them, and none of the stated goals are clearly
or directly tied to FMCSA's consumer protection responsibilities for
the interstate household goods moving industry. To the extent that
oversight of the household goods moving industry is reflected in
FMCSA's strategic goals, it is included along with reducing traffic
congestion, under the Productivity strategic goal as an objective "to
improve responsiveness to household goods complaints." In our view,
this is a much narrower objective than warranted by FMCSA's actual
responsibilities for overseeing consumer protection in the industry,
which include responsibility for all four categories of consumer
protection.[Footnote 58] Moreover, while the Productivity goal contains
some elements of consumer protection in terms of a defined strategy and
performance elements, it does not identify related consumer protection
performance measures.[Footnote 59] According to the fiscal year 2010
budget, the only performance measure listed under this goal--number of
total crashes involving large trucks and buses per 100 million vehicle
miles traveled--is indirectly related to its household goods
responsibilities because it contributes to the efficiency of the motor
carrier industry, including household goods moving companies. FMCSA
officials told us that the agency has recently developed a performance
measure of household goods effectiveness that as of September 2009, is
under review by the Office of Management and Budget (OMB) for inclusion
in FMCSA's fiscal year 2011 budget and updated strategic plan.
According to FMCSA officials, this new performance measure, if approved
by OMB, will provide information on the extent to which household goods
carriers have improved as a result of FMCSA's interventions in response
to consumer complaints. FMCSA officials did not provide us with the
details of the measure (e.g., how "improvements" will be defined and
measured) since it is still under review by OMB, and we were thus
unable to assess its appropriateness. In our view, any performance
measures in this area will 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.
As discussed earlier in this report, FMCSA has not made a practice of
assessing its consumer protection activities, and the performance
measure in its fiscal year 2010 budget request suggests that it may not
be in a position to do so in the near future. Combining household goods
and congestion performance elements under the Productivity goal further
highlights the mismatch of FMCSA's household goods consumer protection
efforts with its safety mission and, consequently, the agency's
narrowly focused efforts in meeting its consumer protection
responsibilities. Given FMCSA's focus on its safety mission in its
budget request and associated strategic planning documents--and in the
actions of FMCSA officials as discussed above--the agency will likely
continue to provide minimal attention to its consumer protection
responsibilities involving the interstate household goods moving
industry.
While there are some advantages to retaining responsibility for
consumer protection involving the interstate household goods moving
industry with FMCSA, the agency's actions reflect a much greater focus
and priority on FMCSA's safety mandate. To adequately address the
continuing problems in FMCSA's oversight of the interstate household
goods moving industry, FMCSA and DOT senior management would need to
focus more attention on this area and make a stronger and timelier
commitment to implementing all the outstanding mandates and GAO
recommendations. Furthermore, FMCSA and DOT would need to adequately
address any additional recommendations we make to DOT in this report.
Creating a Separate Office in OST Could Increase Focus on Consumer
Protection, but Would Require Additional DOT Resources and Commitment:
Another option to enhance consumer protection efforts in the interstate
household goods moving industry is to create a separate office within
DOT's OST--similar to OAEP--that is focused on ensuring consumer
protection in the interstate household goods moving industry. OAEP's
Aviation Consumer Protection Division (ACPD), which is located within
the Office of the General Counsel in OST, is responsible for consumer
protection activities involving the aviation industry. The office's
authority was modeled after FTC's Telemarketing and Consumer Fraud and
Abuse Prevention Act (Telemarketing Act), which deals with deceptive or
abusive acts or practices in an effort to protect consumers.[Footnote
60] OAEP's ACPD undertakes a wide variety of tasks, such as handling
consumer complaints about air travel, responding to congressional
inquiries, and conducting investigations of airlines for violations of
DOT rules.[Footnote 61]
There are two benefits to placing OAEP in the Office of the General
Counsel within OST. First, creating an office focused solely on
economic regulation[Footnote 62] (including consumer protection)
ensures that efforts are targeted and the goal of consumer protection
remains the priority. OST officials also told us that when DOT was
considering where to put responsibility for its consumer protection
efforts involving the aviation industry, it considered placing
oversight with the Federal Aviation Administration (FAA). However,
because FAA handles safety regulation and operates in support of a
safety mission, DOT officials realized that there was the potential for
consumer protection efforts to be lost in FAA's safety mission, so they
created OAEP within OST and assigned it responsibility for handling
consumer protection for airline service, among other things. By
separating the economic (including consumer protection) and safety
regulatory responsibilities, DOT officials sought to avoid any conflict
in missions, goals, and objectives. In addition, OAEP staff would be
able to easily coordinate and work with the General Counsel's staff in
addressing consumer complaints, which often involve complex legal
issues.
OAEP's function within OST is similar in some ways to FMCSA's household
goods enforcement responsibilities and thus may provide a sound model
for creating a separate office to administer consumer protection
efforts for the interstate household goods moving industry. For
example, both OAEP and FMCSA are responsible for consumer protection in
a transportation industry and both industries deal with similar legal
issues, such as preemption.[Footnote 63] Also, for both regulatory
bodies, consumer complaint information is the foundation for
identifying violators and enforcing consumer protections. Finally,
consumer protection activities under both OAEP and FMCSA's interstate
household goods consumer protection program have similar budgets.
There are some distinct differences, however, in the scope and nature
of the consumer protection problems that are being addressed in each of
these two industries as well as in their ability to conduct oversight.
(See appendix IV for additional information.) For example, the size of
each industry is different--the airline industry has about 7 million
enplanements[Footnote 64] a year and it receives over 10,000 complaints
annually from consumers. By comparison, the interstate household goods
moving industry includes about 1.6 million moves a year and, according
to FMCSA's database, receives about 3,000 complaints annually.
Additionally, while both programs deal with consumer complaints, the
nature of the complaints is different. For the airline industry,
complaints are driven by on-time performance,[Footnote 65] whereas for
the interstate household goods moving industry, complaints are driven
primarily by estimates and final charges, pickup and delivery of goods,
and loss and damage of goods. Furthermore, egregious violators in the
interstate household goods moving industry--such as companies that hold
goods hostage and rogue movers--are not likely to exist in the airline
industry. Finally, OST does not have a field office presence and only
the federal government has the authority to enforce aviation consumer
protection rules. In comparison, FMCSA uses its field organization to
carry out investigations and implement the household goods consumer
protection program. Further, states are able to assist in enforcement
through authority provided under SAFETEA-LU. However, as we noted
earlier in this report, no states have used the SAFETEA-LU authority to
enforce interstate household goods consumer protections.
There are a number of advantages to creating a new household goods
consumer protection office and modeling it after OAEP, including better
focusing household goods consumer protection efforts and creating more
independence to ensure that those efforts are given an appropriate
priority within the department. Separating consumer protection and
safety responsibilities could help address the concerns we have raised
in this report about FMCSA's lack of focus on consumer protection for
the interstate household goods moving industry by eliminating the
competition between FMCSA's current priorities for carrying out both
its safety mission and its household goods consumer protection
responsibilities. Additionally, creating a departmental shift in
responsibilities--as opposed to moving responsibility for interstate
household goods enforcement out of DOT--allows for a greater focus on
interstate household goods consumer protection while still retaining
transportation expertise. Furthermore, an interstate household goods
office within OST would be able to leverage its relationships with
other OST offices, including OAEP and the Office of the General
Counsel, to draw upon their expertise and familiarity with related
consumer protection and legal issues, such as preemption. Relationships
with the General Counsel's staff would be particularly useful given the
legal complexities of the household goods moving industry and perhaps
provide better opportunities to enhance enforcement tools, beyond
assessing financial penalties. Finally, because DOT has already created
a program for consumer protection in aviation and modeled it after
FTC's efforts, the department has insights into establishing an office
that would reflect a consumer protection focus.
While there are advantages to moving the household goods consumer
protection function to OST, there are some key drawbacks. First, some
important efficiencies could be lost in transferring consumer
protection responsibility from FMCSA to OST. Since FMCSA has
responsibility for commercial motor carrier enforcement efforts, such
as licensing and registration, a newly created separate office for
consumer protection would need to exert strong coordination with these
FMCSA programs. Second, unlike FMCSA, OST does not have a field
operations organization in place, so requiring OST to take on consumer
protection efforts for the interstate household goods moving industry
would be a significant change for it on many levels and require careful
consideration of organizational, legal, resource, and budgetary issues.
Since OST does not have field staff, it would have to quickly adapt by
acquiring field staff or by using headquarters staff for its early
efforts to carry out consumer protection responsibilities. Among the
legal issues that would need to be considered is the need to obtain
legislative authority to restructure and re-delegate legal authority
and responsibility from FMCSA to OST.
With respect to resource issues, we did not conduct a cost-benefit
analysis, as it was not part of the scope of our work; however, DOT
officials told us that with the transfer of functions, current FMCSA
resources, such as full-time staff and funding for the existing
interstate household goods program function, would also need to be
transferred. In considering such a transfer, DOT officials would need
to analyze the program's requirements and determine what personnel,
staffing levels, and funding would be needed to soundly administer the
new program. Also, DOT officials told us that depending on the cost of
restructuring the program, any movement of funds from FMCSA to OST
would best be done during the appropriations cycle.
In weighing the advantages and disadvantages of transferring oversight
of the interstate household goods moving industry from FMCSA to OST,
several officials commented that there would need to be a compelling
rationale and desire to make the move, requiring that a strong case be
made about the need for the move. While modeling the new office after
OAEP would provide DOT with an opportunity to better focus on consumer
protection, the move itself would not automatically address the
problems inherent in the existing program that we discuss throughout
this report. DOT would need to fully commit to implementing outstanding
mandates and GAO recommendations and also commit to implementing these
recommendations and mandates in a timely manner. Furthermore, the
agency would need to address any new recommendations we make in this
report. However, by eliminating the competing priorities related to
FMCSA's safety mission, the new office may be in a better position to
address consumer protection issues going forward.
Relocating Oversight to FTC Could Increase Focus on Consumer
Protection, but FTC Lacks Expertise and Legal Authority to Oversee the
Interstate Household Goods Moving Industry:
As the nation's consumer protection agency,[Footnote 66] FTC provides
insights as a model and could also be an option for overseeing the
interstate household goods moving industry. FTC's overarching mission
and one of its strategic goals is specifically to provide consumer
protection by preventing fraud, deception, and unfair business
practices in the marketplace--and it has experience and expertise in
enforcing consumer protection laws in a variety of industries.[Footnote
67] In turn, FTC's strategic objectives, performance measures, and
implementing strategies are aligned to support its strategic goal in
four categories of consumer protection: (1) enforcement; (2)
establishing and maintaining partnerships; (3) conducting education and
outreach; and (4) collecting, monitoring, and reporting complaints (see
appendix V for a detailed description of the type of activities
expected in each of the four consumer protection categories). FTC's
Strategic Plan offers a number of strategies to carry out its consumer
protection goal, and it identifies year-by-year implementation plans,
performance measures, and program evaluations to help ensure that it
effectively achieves that goal.[Footnote 68]
Given FTC's history and expertise in providing consumer protection in a
variety of industries, there are advantages to placing the
responsibility for interstate household goods enforcement and consumer
protection with FTC. FTC could leverage its considerable existing
resources and expertise--in education, outreach, consumer complaint
data, and intergovernmental partnerships--to enhance consumer
protection in the interstate household goods moving industry. For
instance, FTC has a robust database--Consumer Sentinel--that tracks
consumer complaint information from various consumer protection
entities and law enforcement agencies. Law enforcement agencies also
have secure access to the database, which they can use in developing
cases against violators. FTC also has an extensive program for consumer
education and outreach that includes using the Web, news releases,
coordination with local consumer protection organizations, and other
tools, and the agency has established formal and informal relationships
with other state and federal entities that it could use to assist in
protecting household goods moving industry consumers.
While there would be a number of opportunities to strengthen consumer
protection in the interstate household goods moving industry within
FTC, there are important obstacles and drawbacks to moving this
responsibility to FTC. First and foremost, FTC is currently legally
prohibited from regulating certain common carriers, which include
moving companies,[Footnote 69] a restriction in place since FTC's
inception in 1914.[Footnote 70] This particular legal obstacle would
require a legislative change that could have a broad impact on a number
of industries that fall under this restriction. Likewise, FTC does not
have experience or expertise with the interstate household goods moving
industry[Footnote 71] nor does it have the personnel to conduct such
investigations. FTC officials told us that FTC is a law enforcement
agency and has no regulatory expertise involving the interstate
household goods moving industry.[Footnote 72] Another potential
drawback is that FTC already has responsibility for numerous consumer
protection programs in a variety of industries, and making it
responsible for overseeing the interstate household goods industry
(which is relatively small and unique) may create a risk that the
household goods efforts would be lost among the larger, more
established FTC efforts.
Conclusions:
The interstate household goods moving industry--a comparatively small
subset of the commercial motor carrier industry--presents some unique
consumer protection issues. Consumers must navigate contracts,
insurance requirements, and regulations and may encounter egregious
problems, such as hostage goods situation. Since 2001, FMCSA has made
progress in increasing staff, training, and resources and generally
enhancing its enforcement efforts in the interstate household goods
moving industry. The agency, however, has made more limited progress in
educating consumers; collecting, monitoring, and reporting data; and
developing and managing partnerships with states and others. We found
that FMCSA continues to fall short in ensuring strong consumer
protection in the industry, in large part because its efforts to meet
its primary safety mission (as intended by Congress) dwarf its consumer
protection efforts. FMCSA officials repeatedly pointed out to us that
FMCSA is a safety agency, not a consumer protection agency, and that
their first priority is ensuring safety. Moreover, a senior FMCSA
official told us that even if the agency were provided with additional
resources, it would still apply them to safety--not consumer
protection--activities.
Although SAFETEA-LU made it possible for state regulatory agencies and
attorneys general to enforce federal household goods consumer
protection laws and regulations against interstate household goods
movers, no state has done so. We are not recommending additional
revisions in the next reauthorization, because they likely would not
lead to increased action by these entities. In our survey of the state
attorneys general, they indicated their desire to use their own
consumer protection laws in their own state courts to pursue interstate
carriers; however, states are preempted from enforcing state consumer
protection laws, among others, against interstate household goods
carriers under the long-standing Carmack Amendment. Amending or
repealing that law would likely cause consequences in the moving
industry and may cause a rippling effect in a number of other
industries. We did not assess repealing or amending the Carmack
Amendment as it is beyond the scope of this report. These limitations
in the states' involvement in ensuring consumer protections for those
who hire interstate household goods movers underscore the need to have
strong and targeted leadership at the federal level. The two consumer
protection models we reviewed as alternatives to retaining FMCSA as the
entity responsible for household goods consumer protection--FTC and
OST/OAEP models--offer some lessons about how to address the problems
in the interstate household goods moving industry. Although FTC has
expertise in consumer protection, its lack of expertise in and
jurisdiction over the interstate household goods moving industry,
combined with the breadth of its other established consumer protection
responsibilities, suggests that it may not be the best agency to have
responsibility for consumer protection in this particular area. OST's
OAEP's authority is modeled after FTC's Telemarketing Act, and offers
the advantage of being housed within DOT. Moving the oversight
responsibility for household goods consumer protection into a DOT
office, modeled after OAEP and housed within OST, could provide an
opportunity for DOT to focus exclusively on consumer protection in the
interstate household goods moving industry without the distraction of a
safety mission, but would entail costs, which we have not evaluated in
this report. Regardless of which option DOT chooses for its oversight
of household goods movers, the responsible entity--whether FMCSA, OST,
or some other entity--will need to make a more concerted effort to
raise the priority and focus on all four areas of consumer protection.
In doing so, that entity can build upon FTC's consumer protection
strategies as a starting point and learn from FTC's approach--as well
as ensure that the consumer protection efforts undertaken are evaluated
and refined to achieve results.
Recommendations for Executive Action:
To improve DOT's focus on consumer protection involving household goods
movers, we recommend that the Secretary of Transportation take the
following actions:
1. 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.
2. 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 take the following actions to improve the performance of
the program:
* 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.
* 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.
* Once baseline metrics have been established for its current education
and outreach efforts to consumers, 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.
* 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 Comments:
We provided copies of a draft of this report to DOT and FTC for their
review and comment. Both agencies agreed with the information contained
in the report and provided technical comments, which we incorporated as
appropriate. DOT agreed to consider the recommendations we made to it
in the report and provided technical comments via e-mail. FTC provided
written comments, which are reprinted in appendix VI.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of this report
to the appropriate congressional committees, the Secretary of
Transportation, the Administrator of FMCSA, and the Chairman of the
Federal Trade Commission. The report also will be available at no
charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-2834 or flemings@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Staff who made key contributions to
this report are listed in appendix VII.
Signed by:
Susan A. Fleming:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Scope and Methodology:
Our overall approach to addressing the objectives of this report
included analyzing federal laws, regulations, and guidance; surveying
states on their use of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) provisions
that provided authority to enforce federal household goods consumer
protection laws and regulations against interstate household goods
movers; and interviewing a wide range of government and other
officials, including the following (see table 5 for a complete list of
interviewees):
* Officials in the Department of Transportation (DOT), Federal Motor
Carrier Safety Administration (FMCSA) headquarters and six of its field
locations in California, Colorado, Florida, Illinois, New Jersey, and
Texas (selected based on the volume of complaints against movers in
those states, the presence of household goods specialists in those
offices, and recommendations from FMCSA headquarters staff); the
Surface Transportation Board (STB); the Office of the Secretary of
Transportation (OST); and the Office of the Inspector General.
* Federal Trade Commission (FTC), Bureau of Consumer Protection.
* State officials in the offices of selected state regulatory agencies
and attorneys general, including those in Arizona, California, Florida,
Illinois, Maryland, and Washington.
* Representatives from the interstate household goods moving industry--
including the American Moving and Storage Association, the
International Association of Movers, the California Movers and Storage
Association, and the National Council of Moving Associations--and
consumer protection groups--including the Better Business Bureau and
MoveRescue.
Table 5: Organizations Whose Officials Were Interviewed:
Type of organization: Federal agency;
Name of organization:
Department of Transportation;
- Federal Motor Carrier Safety Administration Headquarters Division
offices (California, Colorado, Florida, Illinois, New Jersey, and
Texas);
- Office of Aviation Enforcement and Proceedings;
- Office of the Inspector General;
- Office of the Secretary of Transportation;
- Surface Transportation Board;
- John A. Volpe National Transportation Systems Center;
Federal Trade Commission.
Type of organization: State agency;
Name of organization:
Arizona Department of Weights and Measures;
California Office of the Attorney General;
California Public Utilities Commission;
Florida Department of Agriculture and Commerce Services;
Illinois Commerce Commission;
Maryland Office of the Attorney General;
Washington (state) Utilities and Transportation Commission.
Type of organization: Industry association;
Name of organization:
American Moving and Storage Association;
California Moving and Storage Association;
International Association of Movers;
National Council of Moving Associations.
Type of organization: Consumer group;
Name of organization:
Council of Better Business Bureaus;
MoveRescue;
National Association of Consumer Agency Administrators[A].
Type of organization: Other association;
Name of organization:
National Association of Attorneys General.
Source: GAO.
[A] Our interviews included a former executive director of this
association.
[End of table]
To determine the extent to which states have used the SAFETEA-LU
provisions that allow them to enforce federal household goods consumer
protection laws and regulations, and any challenges to using the
provisions, we first analyzed relevant federal laws and regulations
related to the interstate household goods moving industry, including
SAFETEA-LU,[Footnote 73] the Carmack Amendment,[Footnote 74] and
FMCSA's regulations related to interstate household goods oversight.
[Footnote 75] To better understand the congressional intent behind the
federal laws, we also reviewed the relevant legislative history. Our
primary method for addressing this objective was to survey the state
regulatory agencies in the 42 states and the District of Columbia (for
a total of 43 state regulatory agencies) that regulate intrastate
household goods movers and the state attorneys general in the 50 states
and the District of Columbia.[Footnote 76] The survey for the state
regulatory agencies was pretested with the Washington (state) Utilities
and Transportation Commission and the Illinois Commerce Commission. We
determined which states had an agency that regulated intrastate
household goods by researching state statutes and contacting state
officials. The survey for the state attorneys general was pretested
with the National Association of Attorneys General and a representative
from the Maryland attorney's general office. We received responses from
40 of the 43 state regulatory agencies and 39 of the 51 state attorneys
general offices (see table 6 for a complete list of states that
received and responded to the survey). We also interviewed FMCSA and
Surface Transportation Board (STB) officials to determine if they had
received notice of a state taking an action under the SAFETEA-LU
provisions, as required by law.
Table 6: State Attorneys General and State Regulatory Agencies We
Surveyed to Determine Use of SAFETEA-LU Provisions:
State attorneys general surveyed and responded: Alaska;
Arizona;
Arkansas;
California;
Colorado;
Connecticut;
Delaware;
District of Columbia;
Florida;
Georgia;
Hawaii;
Illinois;
Indiana;
Iowa;
Kansas;
Maryland;
Massachusetts;
Michigan;
Mississippi;
Montana;
Nevada;
New Hampshire;
New Jersey;
New Mexico;
New York;
North Carolina;
North Dakota;
Ohio;
Oklahoma;
Pennsylvania;
Rhode Island;
South Carolina;
Tennessee;
Texas;
Utah;
Virginia;
Washington;
West Virginia;
Wisconsin.
State attorneys general surveyed, no response:
Alabama;
Idaho;
Kentucky;
Louisiana;
Maine;
Minnesota;
Missouri;
Nebraska;
Oregon;
South Dakota;
Vermont;
Wyoming.
State regulatory agencies surveyed and responded:
Alabama;
Arkansas;
California;
Colorado;
Connecticut;
District of Columbia;
Florida;
Georgia;
Hawaii;
Illinois;
Indiana;
Iowa;
Kansas;
Kentucky;
Louisiana;
Massachusetts;
Michigan;
Missouri;
Montana;
Nebraska;
Nevada;
New Hampshire;
New Jersey;
New Mexico;
New York;
North Carolina;
North Dakota;
Ohio;
Oklahoma;
Oregon;
Pennsylvania;
Rhode Island;
South Carolina;
South Dakota;
Tennessee;
Texas;
Utah;
Virginia;
West Virginia;
Wyoming.
State regulatory agencies surveyed, no response:
Minnesota;
Mississippi;
Washington.
Source: GAO surveys of state regulatory agencies and state attorneys
general.
[End of table]
To determine the extent and timeliness of progress made by FMCSA in its
consumer protection efforts, we reviewed documentation--and interviewed
pertinent agency officials--on actions taken by FMCSA to address
recommendations contained in prior GAO reports[Footnote 77] and in
SAFETEA-LU mandates. This included a review of the information
contained in FMCSA's consumer complaint database. To assess the
reliability of the complaint database, we interviewed agency officials
and performed basic electronic testing on the fields of interest. We
determined that the data were sufficiently reliable to be used for
reporting basic complaint information.
Finally, to understand potential options for enhancing consumer
protections in the interstate household goods moving industry, we
analyzed a variety of consumer protection models for lessons learned
that might be applied to oversight of the interstate household goods
moving industry and to understand the advantages and disadvantages of
each of those models. As part of our preliminary work, we considered
FTC's Bureau of Consumer Protection; DOT's Office of Aviation
Enforcement and Proceedings (OAEP), Consumer Product Safety Commission,
and STB, FTC's implementation of the Magnuson-Moss Warranty Act,
[Footnote 78] FMCSA's Motor Carrier Safety Assistance Program, and
Canadian and selected state models. These models were not pursued
because our preliminary review indicated that they were not
appropriately comparable to the interstate household goods moving
industry. For final consideration, we reviewed two models--FTC and
DOT's OAEP within OST--which we used to develop two options for
restructuring oversight of consumer protection involving the interstate
household goods moving industry. These were chosen because of the
relevance of their consumer protection activities and also because FTC
is considered the "national consumer protection" agency and OAEP's
authority for aviation consumer protection is based on FTC's
Telemarketing and Consumer Fraud and Abuse Prevent Act. To understand
how they undertake consumer protection efforts, we interviewed
officials from both entities and analyzed relevant documentation about
their missions, budgets, and consumer protection activities. In
addition to the two options we developed based on these two models, we
also developed a "baseline" option of retaining FMCSA as the agency
responsible for oversight of the interstate household goods moving
industry.
We conducted this performance audit from November 2008 through October
2009 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Number and Type of Consumer Complaints about Household
Goods Movers Received by FMCSA, by Category, Fiscal Years 2001 through
2008:
Complaint type: Unauthorized operations;
2001: 47;
2002: 35;
2003: 60;
2004: 66;
2005: 56;
2006: 38;
2007: 489;
2008: 352;
All years: 1,143.
Complaint type: Shipment documents;
2001: 27;
2002: 766;
2003: 525;
2004: 730;
2005: 525;
2006: 397;
2007: 1,006;
2008: 946;
All years: 4,922.
Complaint type: Estimates and final charges;
2001: 0;
2002: 1;
2003: 14;
2004: 15;
2005: 20;
2006: 15;
2007: 1,090;
2008: 1,387;
All years: 2,542.
Complaint type: Weighing;
2001: 141;
2002: 276;
2003: 226;
2004: 289;
2005: 268;
2006: 397;
2007: 630;
2008: 644;
All years: 2,871.
Complaint type: Hostage;
2001: 355;
2002: 560;
2003: 708;
2004: 708;
2005: 682;
2006: 482;
2007: 717;
2008: 730;
All years: 4,942.
Complaint type: Pickup/delivery;
2001: 212;
2002: 227;
2003: 254;
2004: 390;
2005: 395;
2006: 310;
2007: 1,147;
2008: 1,330;
All years: 4,265.
Complaint type: Loss/damage;
2001: 763;
2002: 693;
2003: 1,395;
2004: 1,832;
2005: 1,803;
2006: 1,725;
2007: 1,348;
2008: 1,190;
All years: 10,749.
Complaint type: Claim settlement;
2001: 12;
2002: 13;
2003: 42;
2004: 63;
2005: 54;
2006: 59;
2007: 872;
2008: 1,097;
All years: 2,212.
Complaint type: Other commercial complaints;
2001: 251;
2002: 234;
2003: 452;
2004: 511;
2005: 466;
2006: 395;
2007: 482;
2008: 513;
All years: 3,304.
Complaint type: No reason for complaint reported;
2001: 506;
2002: 340;
2003: 491;
2004: 686;
2005: 738;
2006: 618;
2007: 116;
2008: 6;
All years: 3,501.
Complaint type: Number of complaints for the year;
2001: 1,858;
2002: 1,995;
2003: 2,825;
2004: 3,597;
2005: 3,569;
2006: 3,159;
2007: 2,960;
2008: 2,917;
All years: 22,880.
Source: GAO analysis of FMCSA complaint data.
Note: Any one complaint may have multiple reason codes; thus the column
totals do not sum to the number of complaints for each year.
[End of table]
[End of section]
Appendix III: Results from GAO Surveys of State Regulatory Agencies and
State Attorneys General:
Introduction:
State Regulatory Agency Survey:
The U.S. Government Accountability Office (GAO) has been requested by
Congress to review the authority contained in the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy For Users
(SAFETEA-LU), Pub. L. No. 109-59, Section 4206, 119 Stat. 1755 (2005)
(codified at 49 U.S.C. § 14710). This authority permits a state
regulatory agency to enforce federal consumer protection laws and
regulations against interstate movers in federal and state courts.
Hereinafter, we refer to this authority as "SAFETEA-LU authority."
As part of this study, GAO is conducting a survey of all responsible
state regulatory agencies to determine whether states are using this
authority and if not, why. We will be using this data in the aggregate
to report to the Congress and to select states for further case study
in order to more comprehensively understand this issue.
SAFETEA-LU Authority:
1. Has your state regulatory agency ever used the authority granted to
it under SAFETEA-LU by bringing an action against INTERSTATE household
goods movers in federal court or state court under 49 U.S.C. § 14710?
Yes: 0;
No: 30;
Don't know: 10.
2. If yes, please describe the type of action.
3. Has your state regulatory agency not used the SAFETEA-LU authority
(49 U.S.C. § 14710) against Interstate household goods movers for any
of the following reasons?
b. Unclear on how to apply SAFETEA-LU's authority;
Yes: 17;
No: 16;
Don't Know: 5;
Not Checked: 2;
Total: 40.
f. Prefer the State Attorney General's office to bring civil actions;
Yes: 14;
No: 12;
Don't Know: 12;
Not Checked: 2;
Total: 40.
i. Volume of consumer complaints against Interstate household goods
movers is low;
Yes: 13;
No: 11;
Don't Know: 13;
Not Checked: 3;
Total: 40.
a. Unaware of the SAFETEA-LU authority;
Yes: 11;
No: 24;
Don't Know: 3;
Not Checked: 2;
Total: 40.
c. State law prohibits us from bringing any such action;
Yes: 5;
No: 13;
Don't Know: 19;
Not Checked: 3;
Total: 40.
e. There is another state or local agency responsible for bringing
actions against Interstate household goods movers;
Yes: 5;
No: 22;
Don't Know: 11;
Not Checked: 2;
Total: 40.
g. Want to establish a pattern of behavior before using authority, and
pattern has not emerged;
Yes: 4;
No: 22;
Don't Know: 12;
Not Checked: 2;
Total: 40.
d. Elected to prosecute relevant cases under state laws;
Yes: 3;
No: 27;
Don't Know: 8;
Not Checked: 2;
Total: 40.
h. Penalties are insufficient under SAFETEA-LU;
Yes: 0;
No: 17;
Don't Know: 20;
Not Checked: 3;
Total: 40.
j. Other;
Yes: 10;
No: 7;
Don't Know: 5;
Not Checked: 18;
Total: 40.
4. Which of the following, if any, are challenges to bringing actions
against Interstate household goods movers in FEDERAL court using
SAFETEA-LU's authority?
c. Insufficient resources to prosecute the case(s) in federal court;
Yes: 15;
No: 9;
Don't Know: 13;
Not Checked: 3;
Total: 40.
f. Lack of clarity on how to apply the SAFETEA-LU authority;
Yes: 13;
No: 14;
Don't Know: 10;
Not Checked: 3;
Total: 40.
e. Lack of awareness of SAFETEA-LUs authority;
Yes: 9;
No: 18;
Don't Know: 9;
Not Checked: 4;
Total: 40.
d. Lack of familiarity with the federal court system;
Yes: 8;
No: 16;
Don't Know: 13;
Not Checked: 3;
Total: 40.
a. Our state regulatory agency prefers to bring action in state courts;
Yes: 6;
No: 18;
Don't Know: 13;
Not Checked: 3;
Total: 40.
b. State consumer protection laws provide stronger penalties;
Yes: 1;
No: 13;
Don't Know: 23;
Not Checked: 3;
Total: 40.
g. Other;
Yes: 10;
No: 6;
Don't Know: 11;
Not Checked: 13;
Total: 40.
5. Which of the following, if any, are challenges to bringing actions
against Interstate household goods movers in STATE court using SAFETEA-
LU's authority?
b. Insufficient resources to prosecute the case(s) in federal court;
Yes: 16;
No: 11;
Don't Know: 10;
Not Checked: 3;
Total: 40.
d. Lack of clarity on how to apply the SAFETEA-LU authority;
Yes: 15;
No: 13;
Don't Know: 9;
Not Checked: 3;
Total: 40.
c. Lack of awareness of SAFETEA-LUs authority;
Yes: 10;
No: 17;
Don't Know: 10;
Not Checked: 3;
Total: 40.
a. State consumer protection laws provide stronger penalties;
Yes: 1;
No: 12;
Don't Know: 24;
Not Checked: 3;
Total: 40.
e. Other;
Yes: 8;
No: 6;
Don't Know: 11;
Not Checked: 15;
Total: 40.
6. What additional federal remedies related to Interstate household
goods movers would better protect consumers?
7. Do you regularly provide information to the following entities about
consumer complaints related to household goods movers?
e. Federal Motor Carriers Safety Administration (FMCSA);
Yes: 18;
No: 22;
Don't know: 0;
Not checked: 0;
Total: 40.
b. State moving association;
Yes: 13;
No: 27;
Don't know: 0;
Not checked: 0;
Total: 40.
a. State Attorney General office;
Yes: 11;
No: 29;
Don't know: 0;
Not checked: 0;
Total: 40.
c. State or local Better Business Bureau;
Yes: 7;
No: 33;
Don't know: 0;
Not checked: 0;
Total: 40.
d. American Moving and Storage Association (AMSA);
Yes: 0;
No: 39;
Don't know: 1;
Not checked: 0;
Total: 40.
f. Other;
Yes: 6;
No: 17;
Don't know: 2;
Not checked: 15;
Total: 40.
8. Do the following entities regularly provide information to your
office about consumer complaints they receive related to household
goods movers?
a. State Attorney General office;
Yes: 15;
No: 24;
Don't know: 0;
Not Checked: 1;
Total: 40.
b. State moving association;
Yes: 11;
No: 28;
Don't know: 0;
Not Checked: 1;
Total: 40.
c. State or local Better Business Bureau;
Yes: 11;
No: 28;
Don't know: 0;
Not Checked: 1;
Total: 40.
e. Federal Motor Carriers Safety Administration (FMCSA);
Yes: 10;
No: 29;
Don't know: 1;
Not Checked: 0;
Total: 40.
d. American Moving and Storage Association (AMSA);
Yes: 0;
No: 37;
Don't know: 1;
Not Checked: 2;
Total: 40.
f. Other;
Yes: 6;
No: 18;
Don't know: 2;
Not Checked: 14;
Total: 40.
9. How are complaints against Interstate household goods movers
investigated by your office? Please include how your office works with
any other state or local agencies during the process.
10. What involvement, if any, does your state regulatory agency have in
resolving complaints against an Interstate household goods mover?
11. Is there anything else you'd like us to know related to household
goods movers?
12. If you have completed the survey, please check "Completed" below.
Clicking on "Completed" indicates that your answers are final.
Completed: 40;
Not completed: 3.
Introduction:
State Attorneys General Survey:
The U.S. Government Accountability Office (GAO) has been requested by
Congress to review the authority contained in the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy For Users
(SAFETEA-LU), Pub. L. No. 109-59, Section 4206, 119 Stat. 1755-1756
(2005) (codified at 49 U.S.C. § 14711). This authority permits State
Attorneys General to enforce federal consumer protection laws and
regulations against interstate movers in federal courts. Hereinafter,
we refer to this authority as "SAFETEA-LU authority."
As part of this study, GAO is conducting a survey of all State
Attorneys General to determine whether states are using this authority
and if not, why. We will be using this data in the aggregate to report
to the Congress and to select states for further case study in order to
more comprehensively understand this issue.
SAFETEA-LU Authority:
1. Has your State Attorney General's office ever used the authority
granted to it under SAFETEA-LU by bringing an action against INTERSTATE
household goods movers in federal court under 49 U.S.C. § 14711?
Yes: 0;
No: 37;
Don't know: 2.
2. If yes, please describe the type of action.
3. Has your office not used the SAFETEA-LU authority (49 U.S.C. §
14711) against Interstate household goods movers for any of the
following reasons?
i. Volume of consumer complaints against INTERSTATE household goods
movers is low;
Yes: 18;
No: 11;
Don't Know: 5;
Not Checked: 5;
Total: 39.
g. Penalties are insufficient under SAFETEA-LU;
Yes: 14;
No: 14;
Don't Know: 8;
Not Checked: 3;
Total: 39.
h. Federal remedies do not benefit the state;
Yes: 14;
No: 13;
Don't Know: 8;
Not Checked: 4;
Total: 39.
a. Unaware of the SAFETEA-LU authority;
Yes: 11;
No: 23;
Don't Know: 2;
Not Checked: 3;
Total: 39.
c. Elected to prosecute relevant cases under state laws;
Yes: 10;
No: 21;
Don't Know: 3;
Not Checked: 5;
Total: 39.
e. Want to establish a pattern of behavior before using authority, and
pattern has not emerged;
Yes: 8;
No: 23;
Don't Know: 4;
Not Checked: 4;
Total: 39.
b. Unclear on how to apply SAFETEA-LU's authority;
Yes: 5;
No: 27;
Don't Know: 2;
Not Checked: 5;
Total: 39.
d. There is another state or local agency responsible for bringing
actions against for Interstate household goods movers;
Yes: 5;
No: 25;
Don't Know: 4;
Not Checked: 5;
Total: 39.
f. Insufficient resources to prosecute the case(s) in federal court;
Yes: 4;
No: 27;
Don't Know: 3;
Not Checked: 5;
Total: 39.
j. Lack of familiarity with the federal court system;
Yes: 0;
No: 33;
Don't Know: 1;
Not Checked: 5;
Total: 39.
k. Other;
Yes: 5;
No: 14;
Don't Know: 7;
Not Checked: 13;
Total: 39.
4. Which of the following, if any, are challenges to bringing actions
against Interstate household goods movers in Federal court using
SAFETEA-LU's authority?
a. Our State AG office prefers to bring action in state courts;
Yes: 20;
No: 12;
Don't Know: 5;
Not Checked: 2;
Total: 39.
b. State consumer protection laws provide stronger penalties;
Yes: 20;
No: 8;
Don't Know: 9;
Not Checked: 2;
Total: 39.
c. Financial remedies under SAFETEA-LU benefit the federal government,
not the state;
Yes: 20;
No: 8;
Don't Know: 10;
Not Checked: 1;
Total: 39.
e. Lack of awareness of the SAFETEA-LU authority;
Yes: 10;
No: 25;
Don't Know: 0;
Not Checked: 4;
Total: 39.
d. Insufficient resources to prosecute the case(s) in federal court;
Yes: 7;
No: 23;
Don't Know: 6;
Not Checked: 3;
Total: 39.
f. Lack of clarity on how to apply the SAFETEA-LU authority;
Yes: 7;
No: 24;
Don't Know: 4;
Not Checked: 4;
Total: 39.
g. Other;
Yes: 3;
No: 13;
Don't Know: 9;
Not Checked: 14;
Total: 39.
5. What additional federal remedies related to INTERSTATE household
goods movers would better protect consumers?
6. Do law enforcement officers in your state have the authority to
intervene in a civil dispute between consumers and household goods
movers?
Yes: 16;
No: 12;
Don't know: 11.
7. Do you regularly provide information to the following entities about
consumer complaints related to household goods movers?
b. State moving association;
Yes: 31;
No: 4;
Don't know: 0;
Not checked: 4;
Total: 39.
a. State regulatory authority (agency with authority over the
Intrastate transportation of household goods);
Yes: 12;
No: 23;
Don't know: 2;
Not checked: 2;
Total: 39.
e. Federal Motor Carriers Safety Administration (FMCSA);
Yes: 10;
No: 23;
Don't know: 4;
Not checked: 2;
Total: 39.
c. State or local Better Business Bureau;
Yes: 6;
No: 30;
Don't know: 2;
Not checked: 1;
Total: 39.
d. American Moving and Storage Association (AMSA);
Yes: 1;
No: 32;
Don't know: 4;
Not checked: 2;
Total: 39.
f. Other;
Yes: 7;
No: 18;
Don't know: 4;
Not checked: 10;
Total: 39.
8. Do the following entities regularly provide information to your
office about consumer complaints they receive related to household
goods movers?
a. State regulatory authority (agency with authority over the
Intrastate transportation of household goods);
Yes: 11;
No: 26;
Don't know: 1;
Not Checked: 1;
Total: 39.
c. State or local Better Business Bureau;
Yes: 10;
No: 26;
Don't know: 2;
Not Checked: 1;
Total: 39.
e. Federal Motor Carriers Safety Administration (FMCSA);
Yes: 2;
No: 34;
Don't know: 2;
Not Checked: 1;
Total: 39.
b. State moving association;
Yes: 1;
No: 34;
Don't know: 3;
Not Checked: 1;
Total: 39.
d. American Moving and Storage Association (AMSA);
Yes: 0;
No: 35;
Don't know: 3;
Not Checked: 1;
Total: 39.
f. Other;
Yes: 2;
No: 20;
Don't know: 7;
Not Checked: 10;
Total: 39.
9. How are complaints against Interstate household goods movers
investigated by your office? Please include how your office works with
any other state or local agencies during the process, if at all.
10. What involvement, if any, does your State AG office have in
resolving complaints against an Interstate household goods mover?
11. Is there anything else you'd like us to know related to household
goods movers?
12. If you have completed the survey, please check "Completed" below.
Clicking on "Completed" indicates that your answers are final.
Completed: 39;
Not completed: 12.
[End of section]
Appendix IV: Comparison of Consumer Protection Efforts in Three
Organizations Reviewed by GAO:
Organization:
FMCSA: Agency;
OST, OAEP: Office;
FTC, Bureau of Consumer Protection: Agency.
Authority:
FMCSA: Regulatory and enforcement;
OST, OAEP: Enforcement;
FTC, Bureau of Consumer Protection: Regulatory and law enforcement.
Description:
FMCSA: FMCSA has responsibility for overseeing interstate household
goods movers. It is responsible for education and outreach and
collecting information on the state of the industry and information on
complaints lodged against interstate household goods movers. It also
reviews compliance with regulatory requirements and enforces statutes
and regulations;
OST, OAEP: OST oversees a number of activities, including ensuring the
fitness of U.S. airlines and enforcing airline consumer protection
regulations. Within OST, OAEP enforces DOT's aviation economic and
civil rights requirements, which relate to consumer protection and many
other areas. The requirements related to consumer protection encompass
many areas, including unfair and deceptive practices, unfair
competition by air carriers and travel agents, and lost baggage
liability;
FTC, Bureau of Consumer Protection: The agency enforces laws that
prohibit business practices that are anticompetitive, deceptive, or
unfair. It also promotes informed consumer choice.
History:
FMCSA: The Interstate Commerce Commission Termination Act of 1995
transferred federal responsibilities for protecting consumers who move
their household goods across state lines using commercial moving
companies to DOT. These functions were further assigned to the motor
carrier safety office within the Federal Highway Administration. The
Motor Carrier Safety Improvement Act of 1999 transferred these consumer
protection functions to FMCSA;
OST, OAEP: Responsibility for economic regulatory authority was placed
under OST in order to separate safety oversight from economic
regulatory oversight. Within OST, OAEP has responsibility for consumer
protection in the aviation industry;
FTC, Bureau of Consumer Protection: FTC was created in 1914. Its
purpose was to prevent unfair methods of competition in or affecting
commerce. Over the years, Congress passed additional laws giving the
agency greater authority to police unfair or deceptive acts or
practices.
Mission:
FMCSA: Promote safe commercial motor vehicle operation through
education, regulation, enforcement, and innovative research and
technology to reduce truck and bus crashes, which will result in fewer
fatalities and injuries. Achieve a safer and more secure transportation
environment through shared responsibilities with partners and
stakeholders;
OST, OAEP: OST OAEP does not have a specific mission statement;
FTC, Bureau of Consumer Protection: To prevent business practices that
are anticompetitive or deceptive or unfair to consumers; to enhance
informed consumer choice and public understanding of the competitive
process; and to accomplish these missions without unduly burdening
legitimate business activity.
Relevant strategic goal:
FMCSA: Household goods enforcement is located under the strategic goal
of Productivity. Under the Productivity goal, FMCSA aims to engage
consumers and the household goods moving industry in reducing
noncompliant practices;
OST, OAEP: OAEP does not have specific strategic goals or performance
measures. However, the 2011 budget identifies a variety of tasks for
OAEP's Aviation Consumer Protection Division (ACPD), such as handling
consumer complaints about air travel, responding to congressional
inquiries regarding constituent travel problems (400 to 700 inquiries
are received each fiscal year), and conducting investigations of
airlines for violations of DOT rules;
FTC, Bureau of Consumer Protection: Protect consumers: Prevent fraud,
deception, and unfair business practices in the marketplace.
Program resources (staffing and budget):
FMCSA: Household goods enforcement;
For 2010: $3.1 million (operations, outreach, and hotline); There are
currently eight household goods specialists who report to a household
goods team leader and five staff in headquarters who are assigned to
household goods enforcement; There are 128 safety investigators who are
also trained in household goods enforcement and can be brought in to
assist with household goods reviews;
OST, OAEP: OAEP; Budget: $3 million to 3.5 million. Also, received an
additional $2.5 million in each of the last 2 years because of the high-
profile of airline issues; Staffing: 40 staff members in OAEP (15
specifically in ACPD);
FTC, Bureau of Consumer Protection: FTC's Goal 1-Protect Consumers;
Budget 2010: $165,144,000; 623 full-time equivalents (FTE)[A].
Organizational level of consumer protection function:
FMCSA: Interstate household goods oversight is conducted within FMCSA
(operating administration within DOT);
OST, OAEP: OAEP is in the Office of the General Counsel. OAEP through
ACPD has responsibility for the Aviation Consumer Protection program;
FTC, Bureau of Consumer Protection: FTC is headed by a commission
composed of five members who are nominated by the President and
confirmed by the Senate, and who serve staggered 7-year terms. The
President chooses one commissioner to act as Chairman. No more than
three commissioners can be of the same political party; FTC has two
major law enforcement bureaus, Consumer Protection and Competition,
supported by the Economics Bureau, regional offices, and mission
support offices.
Scope of complaints:
FMCSA: FMCSA received 2,917 complaints in fiscal year 2008;
Complaints primarily relate to estimates/final charges, pickup
delivery, and loss/damage;
OST, OAEP: In fiscal year 2008, the office received over 10,000
complaints; Complaints are driven by airline flight problems, such as
delays, cancellations, and misconnections;
FTC, Bureau of Consumer Protection: For calendar year 2008, FTC
received over 1.2 million complaints. The greatest numbers of
complaints related to consumer fraud and identity theft.
Enforcement:
FMCSA: FMCSA enforces compliance with economic and consumer protection
laws and regulations for the interstate household goods moving
industry. FMCSA identifies and investigates patterns of complaints and
then targets those violators for compliance reviews. When the agency
encounters noncompliance it relies on a variety of enforcement
activities, including imposing civil monetary penalties;
OST, OAEP: OAEP is involved in enforcement actions, including drafting
and negotiating settlement agreements, filing formal complaints, and
assessing civil penalties. Actions are taken against any company or
carrier offering service for which it has been found unfit by DOT and
conducting unfair and deceptive practices in the airline industry, and
in response to disability and civil rights complaints;
FTC, Bureau of Consumer Protection: FTC is involved in a variety of
enforcement activities to protect consumers, including ensuring
compliance with administrative and federal court orders entered in
consumer protection cases; conducting investigations and prosecuting
civil actions to stop fraudulent, unfair, or deceptive marketing and
advertising practices; and enforcing consumer protection laws, rules,
and guidelines.
Education and outreach:
FMCSA: Budget/funding: For 2010, $1.7 million;
Activities:
* Recently drafted a consumer education and outreach assessment and
plan (still in review);
* 1-800 hotline;
* Web site;
* Consumer publications;
OST, OAEP: Budget/funding: No specific funding allocated for education
and outreach;
Activities:
There is no strategic education and outreach planning;
* Air Travel Consumer Report published monthly statistics on
complaints;
* Other consumer publications--Fact sheets, Fly-Rights, etc.;
* Web site;
* News media relations: news releases and interviews;
FTC, Bureau of Consumer Protection: Budget/funding: No specific funding
allocated for education and outreach;
Activities:
Division of Consumer and Business Education provides consumers with
tools they need to make informed buying decisions in the marketplace
and businesses with tools they need to comply with the law;
* Web site;
* News releases;
* Information pamphlets.
Establish and maintain partnerships:
FMCSA: FMCSA convened the Household Goods Working Group to develop and
strengthen partnerships with the states; however, the group's results
were mixed. The agency has recently issued an enforcement outreach
plan; however, it is yet to be implemented. Household goods
specialists' relationships with states and local stakeholders,
including law enforcement, vary;
OST, OAEP: Most of the relationships are informal partnerships to share
information and to get information from consumers. Networking is a
major effort in coordinating with other entities. For example, the
office has relationships with the Department of Justice, the
Transportation Security Administration, and FTC;
FTC, Bureau of Consumer Protection: FTC coordinates with a variety of
federal and state agencies. The coordination is both formal and
informal. Many of the informal relationships depend on personal
networking and ongoing communication with stakeholders. Formal
relationships could entail a memorandum of understanding; FTC officials
noted that they have a very collaborative relationship with the states,
particularly the state attorneys general.
Collect, monitor, and report complaints:
FMCSA: Complaint data are received and managed in FMCSA's National
Consumer Complaint Database. Consumers primarily file complaints
through FMCSA's "Protect Your Move" Web site and 1-800 hotline;
OST, OAEP: The computer complaint data system categorizes the
complaints. About 50 percent of the complaints received are submitted
on the online form; The Air Travel Consumer Report is the tool for
reporting aviation complaint data. The report ranks air carriers based
on areas such as on-time performance, cancellations, and mishandled
baggage;
FTC, Bureau of Consumer Protection: The Consumer Sentinel is a
complaint database with information on fraud and identity theft.
Complaints are self-reported and unverified. The database is available
to law enforcement partners for use in investigations; FTC works to
cross walk other agency data so that the data can easily be uploaded
into the database. Some of the functionality that FTC has in place
includes posting alerts and detailed search criteria; FTC reports on
its complaint data through an annual publication.
Source: GAO analysis of DOT and FTC information.
[A] The number of FTEs is for FTC's consumer protection mission, which
includes personnel in the Bureau of Consumer Protection and resources
drawn from the Bureau of Economics, Office of the General Counsel,
regional offices, and administrative and support offices.
[End of table]
[End of section]
Appendix V: Types of Consumer Protection Activities:
Enforcement:
Focus agency enforcement on cutting-edge issues that threaten consumer
protection in emerging areas.
Stop injury to consumers by applying fundamental consumer protection
principles to new practices.
Halt advertising and marketing practices that are most injurious to
consumers or that prey on specific groups of vulnerable consumers.
Use the results of surveys to determine where enforcement needs are
greatest and meet these needs with targeted enforcement efforts.
Update, rescind, or promulgate regulations in response to regulatory
reviews and congressional mandates.
Create and implement a comprehensive order-enforcement program that
targets those individuals and companies that violate federal court and
administrative orders.
Establish and maintain partnerships:
Improve information sharing with law enforcement partners through Web
site.
Continue outreach to law enforcement partners and organizations to
improve information sharing.
Promote the criminal prosecution of the most egregious violators
through coordination and cooperation with criminal law enforcement
authorities.
Continue to coordinate with local, state, and federal law enforcement
partners for initiatives and sweeps.
Leverage resources (by working with federal, state, local, and private
sector partners) to maximize the reach of consumer and business
education campaigns.
Target advocacy activities to encourage state and federal government
policymakers to evaluate both the costs and benefits of their policies
for consumers, emphasizing the impact on consumers of policies that
unnecessarily affect the dissemination of truthful, non-misleading
information to consumers and the interplay of competition and consumer
protection concerns.
Use letters and public comments to urge state and federal government
policymakers to consider consumer research and other empirical data in
their decisions regarding the costs and benefits of their policies for
consumers.
Encourage industry self-regulation where consumer protection problems
are emerging, industry has a comparative advantage in addressing the
problems, or legal or practical limitations constrain the government's
ability to act.
Education and outreach:
Focus consumer and business education efforts on areas where fraud,
deception, unfair practices, and information gaps cause the greatest
injury.
Target particular demographic groups with messages about marketplace
issues that affect them.
Use the results of surveys to determine where education needs are
greatest and meet these needs with targeted education efforts.
Increase public awareness of consumer protection problems and solutions
by conducting and publishing studies and filing advocacy comments on
changes in the marketplace and the impact of business and government
actions on consumers.
Focus workshops and conferences on emerging or challenging consumer
protection problems.
Issue reports mandated by law and other reports that articulate
concrete measures that the public and private sectors could take to
address consumer protection problems.
Collect, monitor, and report complaints:
Continue to upgrade and enhance the online consumer complaint database
and Web site to respond to increasing demands and maintain both as the
premier consumer protection information resource.
Improve and expand the tools that are provided through this Web site by
pulling multiple systems together onto one platform and making it the
gateway for those who want information about the consumer protection
problems affecting consumers.
Expand the pool of entities that make their consumer complaint data
available to the community through this Web site.
Continue to strengthen capabilities to analyze the increasing volume of
consumer complaints and augment complaints with other sources to
develop case leads and identify new or emerging concerns.
Monitor the marketplace to identify illegal practices that may not be
fully captured by the database or other information sources.
Ensure the quality, security, and integrity of the database and Web
site information.
Source: GAO analysis of information contained in FTC's Strategic Plan
for Fiscal Years 2006-2011 (Sept. 30, 2006).
[End of table]
[End of section]
Appendix VI: Comments from the Federal Trade Commission:
United States Of America:
Federal Trade Commission:
Office of the Director, Bureau of Consumer Protection:
Washington, D.C. 20580:
October 6, 2009:
Ms. Susan Fleming:
Director:
Physical Infrastructure Issues:
United States Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548:
Re: Goods Moving Industry: Progress Has Been Made in Enforcement, but
Increased Focus on Consumer Protection is Needed (GAO-10-38 Draft
Report, dated October 30, 2009):
Dear Ms. Fleming:
The Bureau of Consumer Protection ("BCP") of the Federal Trade
Commission ("FTC") appreciates the opportunity to review and comment on
the above-captioned draft report on consumer protection issues in the
interstate household goods moving industry. The report appropriately
highlights the consumer protection concerns at the federal and state
levels.
As you recognize in your report, the FTC is "the nation's consumer
protection agency," and it has broad responsibility over many segments
of the marketplace. As you also know, Section 5 of the Federal Trade
Commission Act specifically excludes regulated transportation and
communications "common carriers "from the FTC's jurisdiction. While the
agency nonetheless has had substantial experience dealing with issues
relating to telecommunications common carriers, we agree with the
report's finding that the agency "lack[s] the expertise and the legal
authority to oversee the interstate household goods moving industry."
Given this fact, we support the report's conclusion that the FTC "may
not be the best agency to have responsibility for consumer protection
in the interstate household goods moving industry."
This industry is regulated by the U.S. Department of Transportation
("DOT") because, as you say in the report, the interstate household
goods moving industry "is a small, but unique, industry governed by
complex federal laws and regulations." Therefore, we must defer to the
Secretary of Transportation and to DOT's Federal Motor Carrier Safety
Administration ("FMCSA") to address the most appropriate way to enforce
consumer protection concerns in this industry.
Your report highlights the need for FMCSA to improve in the areas of
law enforcement, partnering with other agencies (particularly state
attorneys general and regulators), consumer education and outreach, and
collecting and analyzing consumer complaints. As the federal agency
with general subject matter expertise on consumer protection matters,
BCP has acquired significant experience over the years in each of these
areas. We would be happy to share this expertise and experience with
FMCSA, or whatever agency the Secretary of Transportation so
designates. We stand ready to discuss our approach to consumer
protection law enforcement (including targeted federal, state, and
local task forces), BCP's consumer education programs and outreach
efforts (including reaching consumers of limited English proficiency),
and the structure and use of the Consumer Sentinel complaints database
by BCP and member law enforcement agencies.
Sincerely,
Signed by:
David C. Vladeck:
Director:
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Susan A. Fleming, (202) 512-2834 or flemings@gao.gov:
Acknowledgments:
In addition to the contact named above, Rita Grieco, Assistant
Director; Amy Abramowitz; Lauren Calhoun; Erin Henderson; Delwen Jones;
Alex Lawrence; Amanda Miller; SaraAnn Moessbauer; Josh Ormond; Beverly
Ross; Sharon Silas; and Elizabeth Wood made key contributions to this
report.
[End of section]
Footnotes:
[1] 15 U.S.C. § 45(a)(2).
[2] Until 1996, ICC had regulatory and consumer protection
responsibilities for interstate household goods movers. The ICC
Termination Act of 1995, among other things, dissolved ICC and
transferred these responsibilities to DOT, which placed the program
within the motor carrier safety office in the Federal Highway
Administration. See Pub. L. No. 104-88, § 101, 109 Stat. 803, 804.
FMCSA was assigned oversight responsibility for the household goods
moving industry as part of the Motor Carrier Safety Improvement Act of
1999. See Pub. L. No. 106-159, § 101, 113 Stat. 1748, 1750.
[3] GAO, Consumer Protection: Some Improvements in Federal Oversight of
Household Goods Moving Industry Since 2001, but More Action Needed to
Better Protect Individual Consumers, [hyperlink,
http://www.gao.gov/products/GAO-07-586] (Washington, D.C.: May 16,
2007); Consumer Protection: Federal Actions to Oversee the Household
Goods Moving Industry Are Unlikely to Have Immediate Impact,
[hyperlink, http://www.gao.gov/products/GAO-01-819T] (Washington, D.C.:
July 12, 2001); and Consumer Protection: Federal Actions Are Needed to
Improve Oversight of the Household Goods Moving Industry, [hyperlink,
http://www.gao.gov/products/GAO-01-318] (Washington, D.C.: Mar. 5,
2001).
[4] Pub. L. No. 109-59, 119 Stat. 1144.
[5] Pub. L. No. 109-59, § 4206, 119 Stat. 1144, 1754-1757 (2005),
codified at 49 U.S.C. §§ 14710, 14711. The provisions gave the
Secretary of Transportation the authority to determine which laws and
regulations could be enforced under this authority. On November 17,
2006, FMCSA published a list of these laws and regulations. See 71 Fed.
Reg. 67009. This authority was provided to both state regulatory
agencies and state attorneys general, respectively. We refer to these
together as the state for purposes of this report.
[6] State regulatory agencies are those state entities responsible for
regulating the intrastate movement of household goods. In 49 U.S.C. §
14710(d), this type of entity is referred to as a state authority. For
purposes of this report, we use "state agency" to refer to the same
entity as defined by 49 U.S.C. § 14710(d).
[7] Of the 43 regulatory agencies, 40 (93 percent) responded to our
survey. Of the 51 attorneys general we surveyed, 39 (76 percent)
responded to our survey.
[8] Number is based on an average of valid complaints from fiscal year
2004 through fiscal year 2008. FMCSA defines a valid complaint as a
complaint involving an actual shipment by the moving company.
[9] BBB does not differentiate between interstate and intrastate
movers.
[10] "Hostage goods" situations involve a mover holding consumer goods
until the consumer pays fees greatly in excess of the agreed-upon
estimate.
[11] In May 2006, DOT's Acting Inspector General testified that some
victims of movers that held their goods hostage have not seen their
belongings again, have not recovered their damaged possessions until
many months after the move, have had their goods looted and sold, or
have had their goods end up in the homes of the perpetrators. Statement
of Todd J. Zinser, Acting Inspector General, U.S. Department of
Transportation, before the Committee on Commerce, Science, and
Transportation, Subcommittee on Surface Transportation and Merchant
Marine, United States Senate, May 4, 2006, Household Goods Moving
Fraud, CC-2006-044.
[12] [hyperlink, http://www.gao.gov/products/GAO-07-586].
[13] Because holding goods hostage is a criminal offense, the DOT
Office of the Inspector General (OIG) may become involved in a hostage
goods case. The OIG has jurisdiction and the authority to investigate
allegations of fraudulent or other criminal activity related to the
programs and operations of DOT or its operating administrations.
However, for the household goods moving industry, the OIG is involved
with only the most egregious cases that affect many consumers, and
prosecutions depend on the U.S. Attorneys' Office.
[14] See H.R. Rep. No. 104-311, at 87-88 (1995), and S. Rep. No. 104-
176, at 11 (1995), accompanying the ICC Termination Act of 1995, Pub.
L. No. 104-88, 109 Stat. 803.
[15] Among other things, household goods reviews assess compliance with
regulations, for instance, those at 49 C.F.R. part 375.
[16] As of June 2009, FMCSA instituted a new policy for targeting
moving companies for household goods reviews. The new policy is
discussed in detail later in this report.
[17] Strike forces, which focus on states that have reported a high
number of complaints about household goods movers, bring together FMCSA
and state officials to make site visits to the movers that have
generated the greatest number of complaints.
[18] For the purpose of this report, to distinguish between a household
goods review and compliance review, we are using "safety compliance
review" in place of compliance review.
[19] Household goods reviews can be completed in conjunction with
safety compliance reviews.
[20] SAFETEA-LU provided for civil and criminal penalties for failure
to give up possession of household goods. See Pub. L. No. 109-59, §
4210, 119 Stat. 1144, 1758-59 (2005), codified at 49 U.S.C. § 14915.
[21] See Pub. L. No. 109-59, 119 Stat. 1144, title IV, subtitle B.
[22] See 71 Fed. Reg. 67009 (Nov. 17, 2006) for a list of those federal
consumer protection laws and regulations that can be enforced by the
states under this authority. Additional household goods laws are
contained in Title 49, subtitle IV, part B, of the United States Code--
see 49 U.S.C. §§ 13102, 13701, 13702, 13704, 13707, 13901, 13902,
13907, 14104, 14302, 14706, 14707, 14708, 14710, 14711, 14901, 14912,
14915. Regulations related to the interstate movement of household
goods are at 49 C.F.R. part 375.
[23] For purposes of this report, we refer to these SAFETEA-LU
provisions, which provided states with the authority to enforce federal
household goods consumer protection laws and regulations, as SAFETEA-LU
authority.
[24] See H.R. Rep. No. 109-203, § 4206, at 1010 (2005). This language
is also contained in H.R. Rep. No. 109-12, § 4201, at 443 (2005).
[25] The Carmack Amendment is found at 49 U.S.C. § 14706. The legal
principle of "preemption" requires that federal law supersede any
potentially conflicting state law--a determination ultimately made by
the courts. This principle of preemption is based on the Supremacy
Clause of the United States Constitution, which requires federal law to
be the supreme law of the land. U.S. Const. Art. VI, sec. 2.
[26] The Carmack Amendment was enacted in 1906 under the Hepburn Act,
as an amendment to section 20 of the Interstate Commerce Commission Act
of 1887. Act of June 29, 1906, c. 3591, § 7, 34 Stat. 584, 595. The
provision was subsequently amended and became a part of the ICC
Termination Act of 1995. The statute limits liability of an interstate
motor carrier to the actual loss or injury to the transported property.
[27] See Pub. L. No. 109-59, § 4206, 119 Stat. 1144, 1754-1757 (2005),
codified at 49 U.S.C. §§ 14710, 14711. As noted above, for purposes of
this report, when we refer to using SAFETEA-LU authority, we mean using
the authority granted under these two provisions of SAFETEA-LU.
[28] 49 U.S.C. §§ 14710(b), 14711(b)(1). The STB, the successor agency
to the ICC, serves as both an adjudicatory and regulatory body and has
jurisdiction over certain trucking company rate matters, among other
duties.
[29] We surveyed the 43 state regulatory agencies (for 42 states and
the District of Columbia) that have responsibility for oversight of
intrastate household goods movers, 40 of which (93 percent) responded
to our survey. We also surveyed the attorneys general for all 50 states
and the District of Columbia, 39 of which (76 percent) responded to our
survey.
[30] In addition to surveying on the challenges to bringing actions
using this authority, we surveyed the state regulatory agencies and the
state attorneys general on the reasons they had not used this
authority. Responses to these questions, along with the complete
results of our survey, can be found in appendix III.
[31] Survey respondents were able to choose more than one challenge in
responding to survey questions.
[32] State regulatory agencies are permitted to bring actions in either
state or federal court. See 49 U.S.C. § 14710.
[33] Resource constraints were cited less frequently by state attorneys
general as a challenge to bringing an action using the SAFETEA-LU
authority. Of the state attorneys general responding to our survey,
seven noted that they face resource constraints when bringing a case to
federal court.
[34] FMCSA developed some guidance (in the form of a PowerPoint
presentation) to help states with use of the two provisions provided in
the law, and it provided the Household Goods Working Group, discussed
later in this report, with sample legal pleadings to initiate and
prosecute civil enforcement actions in federal district court.
[35] See 49 U.S.C. § 14711(a).
[36] As noted above, 49 U.S.C. § 14711 is silent about the retention of
penalties. FMCSA believes this provision authorizes states to retain
penalties when bringing an action under this authority. Many state
attorneys general, on the other hand, cited their lack of authority to
retain penalties under the provision as a challenge to using this
authority. In our view, the provision's silence about the retention of
penalties, together with other factors, makes it unclear whether, for
example, Congress intended these penalties to be retained by the state,
to be deposited into the federal treasury, or to be made available for
claim by aggrieved state residents.
[37] H.R. 1070, 108th Cong. (2003).
[38] See, for example, Adams Express Co. v. Croninger, 226 U.S. 491,
506 (1913); Charleston and W.C.R. Co. v. Varnville Furniture Co., 237
U.S. 597 (1915); New York, Philadelphia, & Norfolk R.R. Co. v.
Peninsula Produce Exch. of Maryland, 240 U.S. 34, 38 (1916); New York,
New Haven & Hartford R.R. Co. v. Nothnagle, 346 U.S. 128, 131 (1953);
Hughes Aircraft Co. v. North American Van Lines, Inc., 970 F.2d 609,
613 (9th Cir. 1992); United Van Lines, Inc., v. Shooster, 860 F. Supp.
826 (S.D. Fla. 1992); Union Pacific R.R. Co. v. Coast Packing Co., 236
F. Supp. 2d 1130 (C.D. Cal. 2002); and Miracle of Life, LLC v. North
American Van Lines, Inc., 368 F. Supp. 2d 494 (D. S.C. 2005).
[39] State actions could include negligence, breach of contract,
violation of insurance codes, and claims of emotional distress, among
others. See Hoskins v. Bekins Van Lines Co., 343 F.3d 769, 777 (5th
Cir. 2003) (reaffirming a list of claims preempted by the Carmack
Amendment that the court had articulated 10 years earlier in Moffit v.
Bekins Van Lines, 6 F.3d 305, 305 (5th Cir. 1993)). See also fn. 38.
The Carmack Amendment might also be interpreted to preempt state
criminal actions against interstate carriers. Courts have found that
the Carmack Amendment preempts tort claims that overlap with state
common law criminal actions. See Miracle of Life, LLC v. North American
Van Lines, Inc., 368 F. Supp. 2d 494 (D. S.C. 2005); Hoskins v. Bekins
Van Lines Co., 343 F.3d 769, 777 (5th Cir. 2003); United Van Lines v.
Shooster, 860 F. Supp. 826 (SD. Fla. 1992); and Moffit v. Bekins Van
Lines, 6 F.3d 305, 305 (5th Cir. 1993).
[40] We have not assessed repealing or amending the Carmack Amendment,
as it is beyond the scope of this report.
[41] [hyperlink, http://www.gao.gov/products/GAO-01-318].
[42] We identified the four categories of consumer protection based on
our own work for this report and our two prior reports ([hyperlink,
http://www.gao.gov/products/GAO-07-586] and [hyperlink,
http://www.gao.gov/products/GAO-01-318]) and based on information from
the Federal Trade Commission's Strategic Plan for Fiscal Years 2006-
2011. (See appendix V for further information.)
[43] The agency set a goal of completing 300 household goods reviews in
fiscal year 2005 and a goal of completing 450 household goods reviews a
year in each fiscal year 2006 through 2009. For fiscal year 2010, FMCSA
officials told us that they were moving away from a numerical goal for
completing household goods reviews.
[44] Trucking companies that circumvent FMCSA's scrutiny and continue
operating under a different registration are called chameleon carriers.
Such companies evade unpaid fines and disown their previous enforcement
records. This practice is believed to occur among all types of
companies. Although the frequency is unknown, there is concern that it
is particularly prevalent among companies that move household goods. We
have recently issued two reports on chameleon carriers: GAO, Motor
Carrier Safety: Reincarnating Commercial Vehicle Companies Pose Safety
Threat to Motoring Public; Federal Safety Agency Has Initiated Efforts
to Prevent Future Occurrences, [hyperlink,
http://www.gao.gov/products/GAO-09-924] (Washington, D.C.: July 28,
2009), and Motor Carrier Safety: Commercial Vehicle Registration
Program Has Kept Unsafe Carriers from Operating, but Effectiveness Is
Difficult to Measure, [hyperlink,
http://www.gao.gov/products/GAO-09-495] (Washington, D.C.: May 12,
2009).
[45] The Evasion Detection Algorithm is an algorithm that uses
complaints reported in FMCSA's complaint database, as well as searches
from other safety data from FMCSA's existing databases (e.g., MCMIS),
to generate a report of suspected household goods moving companies with
identified attributes that imply that they are evading FMCSA
enforcement.
[46] Pub. L. No. 109-59, § 4213, 119 Stat. 1144, 1759.
[47] 49 C.F.R. 375.213(b)(1).
[48] A state can gain secure access by obtaining a user identification
and password from FMCSA.
[49] In our survey, 13 of the 40 state regulatory agencies and 18 of
the 39 state attorneys general responding noted that one reason they
had not used the SAFETEA-LU provisions is that the volume of complaints
was too low.
[50] The arbitration report was originally required as part of the ICC
Termination Act of 1995 and we recommended in our 2001 report (GAO-01-
318) that FMCSA complete the study. Pub. L. No. 104-88, 109 Stat. 803,
912, codified at 49 U.S.C. § 14708(g). The provision required the
Secretary to review the dispute settlement program, as established
under the section, within 18 months after January 1, 1996-
-meaning the deadline for the report was July 1, 1997. FMCSA completed
the study in November 2008--more than 7 years after the recommendation
was made and 11 years after the legislative deadline elapsed.
[51] As part of our preliminary work, we considered but eliminated
various models of consumer protection as possible replacements for
FMCSA's existing program for overseeing household goods movers. After a
preliminary review, we did not pursue these models for various reasons,
including lack of applicability. (See appendix I for additional
information on the models that we considered during our review.)
[52] Companies that operate commercial vehicles transporting passengers
or hauling cargo in interstate commerce must be registered with FMCSA
and must have a DOT registration number.
[53] Safety audits ensure that new carriers are knowledgeable about the
safety regulations before receiving permanent registration. Although
the emphasis of new entrant safety audits is on education, FMCSA can
apply enforcement actions when it finds new entrants are not in
compliance with safety regulations.
[54] Congress established FMCSA with the intent that safety be the
highest priority of the office. See Motor Carrier Safety Improvement
Act of 1999, Pub. L. No. 106-159, § 101(a), 113 Stat. 1748, 1750.
[55] FMCSA requested a total of $549 million for all its programs in
its fiscal year 2010 budget request.
[56] DOT officials noted that this statement is not representative of
their official policy. Any specific resources or funding designated for
household goods consumer protection or enforcement would be used as
intended by Congress.
[57] About 92 percent of FMCSA's budget is dedicated to activities
falling under the Safety goal, with less than 1 percent of its budget
dedicated to the Productivity goal, which includes household goods
enforcement activities. The remaining 7 percent of the budget goes
toward activities funded under the goals of Security, Global
Connectivity, and Organizational Excellence.
[58] As discussed earlier in this report, we identified four categories
of consumer protection activities--including enforcement; education and
outreach; establishing and maintaining partnerships; and collecting,
monitoring, and reporting complaints--based on our work and information
from FTC.
[59] According to our prior work, successful performance measures
should be aligned with mission and goals, be clearly communicated
throughout an organization, and encompass all the major activities that
an organization is expected to perform to achieve its mission and
deliver on the intent of its programs. See GAO, Public Transportation:
FTA's Triennial Review Program Has Improved, But Assessments of
Grantees' Performance Could Be Enhanced, GAO-09-603 (Washington, D.C.:
June 30, 2009).
[60] OAEP's authority is contained at 49 U.S.C. § 41712, which
prohibits unfair and deceptive practices and unfair methods or
competition in air transportation or the sale of air transportation. It
also provides DOT with enforcement authority involving competition that
according to OAEP officials, exceeds that of the Department of Justice
in some respects. FTC's Telemarketing Act is codified at 15 U.S.C. §
6101 et seq.
[61] A separate office in OST--the Office of Aviation Analysis--is
responsible for ensuring that airlines are properly licensed and
operating lawfully, but it does not conduct consumer protection
activities.
[62] OAEP uses "economic regulation" to include economic and civil
rights requirements related to consumer protection.
[63] In the aviation context, states are prohibited from regulating
rates, routes, or services of any interstate carrier under the Airline
Deregulation Act of 1978. Pub. L. No. 95-504, § 4, 92 Stat. 1705, 1708.
The Airline Deregulation Act of 1978 expressly prohibits state
regulation of rates, routes, or services of any interstate carrier.
See, for example, Air Transportation Association of America v. Cuomo,
520 F.3d. 218 (2d Cir. 2008).
[64] Enplanements are measured by the total number of passengers
boarding a flight, including connecting passengers.
[65] Other types of airline complaints involve lost baggage,
overbooking, fares, customer service, reservations, ticketing, and
boarding.
[66] FTC was established in 1914 by the Federal Trade Commission Act.
Pub. L. No. 63-203, § 5, 38 Stat. 717, 719 (1914). FTC's consumer
protection mission was not part of the agency's jurisdiction until 1938
with the enactment of the Wheeler-Lea Act which amended section 5 of
the FTC Act to include, as unlawful, "unfair or deceptive acts or
practices." Pub. L. No. 75-447, § 3, 52 Stat. 111 (1938).
[67] 15 U.S.C. § 45. By law, FTC may "prosecute any inquiry necessary
to its duties in any part of the United States" (15 U.S.C. § 43) and
may "gather and compile information concerning, and investigate from
time to time the organization, business, conduct, practices, and
management of any person, partnership, or corporation engaged in or
whose business affects commerce, excepting banks, savings and loan
institutions … Federal credit unions … and common carriers." (15 U.S.C.
§ 46(a)).
[68] Federal Trade Commission, Federal Trade Commission Strategic Plan
Fiscal Years 2006-2011 (Sept. 30, 2006).
[69] FTC is prohibited from regulating "common carriers subject to the
Acts to regulate commerce…." 15 U.S.C. § 45(a)(2). Also, FTC's
enforcement authority does not extend to common carriers. 15 U.S.C. §
46(a). A "common carrier" can be defined as "a commercial enterprise
that holds itself out to the public as offering to transport freight or
passengers for a fee. A common carrier is generally required by law to
transport freight or passengers or freight, without refusal, if the
approved fare or charge is paid." Black's Law Dictionary (8th ed.
2004).
[70] Federal Trade Commission Act, Pub. L. No. 63-203, § 5, 38 Stat.
717, 719 (1914).
[71] While DOT's OAEP also does not have expertise in the interstate
household goods moving industry, it is a component of the department
that has expertise in and responsibility for enforcing commercial motor
vehicle regulations.
[72] While FTC officials expressed this sentiment, FTC does have some
limited consumer protection regulatory and enforcement responsibilities
for industries in which it does not have the expertise or primary
regulatory responsibility. For instance, FTC has certain regulatory and
enforcement responsibilities for the food and drug industry (e.g.,
certain food and cigarette labeling and advertising responsibilities),
which is generally within the purview of the Food and Drug
Administration.
[73] Pub. L. No. 109-59, 119 Stat. 1144 (2005).
[74] 49 U.S.C. § 14706.
[75] 49 C.F.R. part 375.
[76] State regulatory agencies are those state entities responsible for
regulating the intrastate movement of household goods. In 49 U.S.C. §
14710(d), this type of entity is referred to as a state authority. For
purposes of this report, we use "state agency" to refer to the same
entity as defined by 49 U.S.C. § 14710(d).
[77] See [hyperlink, http://www.gao.gov/products/GAO-07-586],
[hyperlink, http://www.gao.gov/products/GAO-01-819T], [hyperlink,
http://www.gao.gov/products/GAO-01-318].
[78] The Magnuson-Moss Warranty Act, enacted in part to govern consumer
product warranties, was identified as a model for dispute resolution
procedures. Pub. L. No. 93-637, 88 Stat. 2183 (1975).
[End of section]
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