TIA throws its support behind the Household Goods Shipping Consumer Act

A bipartisan piece of legislation introduced in the House of Representatives earlier this year, which takes a sharp focus on combatting fraud in logistics, while also enhancing transparency and also protecting the supply chain, is receiving strong support from the Alexandria, Va.-based Transportation Intermediaries Association (TIA).

The bill, entitled the Household Goods Shipping Consumer Act, was introduced by Rep. Eleanor Holmes Norton (D-Washington D.C.) and Rep. Mike Ezell (R-Miss.). TIA officials explained that this bill’s main objective is to amend title 49, United States Code, expanding the authority of the Administrator of the Federal Motor Carrier Safety Administration (FMCSA to assess penalties for violations related to the shipping of household goods.

In comments made before the House, when the bill was initially introduced in May, Rep. Holmes Norton explained that this bill would give the Federal Motor Carrier Safety Administration (FMCSA) more authority to protect consumers from fraud in the interstate transportation of household goods.

Key components of the bill include:

• giving FMCSA the authority to assess civil penalties against unregistered shippers and against entities that hold consumers' personal goods hostage;
• giving FMCSA the express authority to reimburse states for enforcing federal consumer protection laws related to the transportation of household goods; and
• establishing requirements to ensure that motor carriers, brokers and freight forwarders that seek registration are operating legitimate businesses

“FMCSA receives thousands of complaints every year from Americans who are the victims of fraud in the shipment of household goods,” she said. “Fraudsters have launched moving companies with fake 5-star online reviews to draw in customers, intending to overcharge customers or to hold their personal goods hostage until an additional fee is paid. After receiving negative reviews, fraudsters open a new moving company under a new name and a new FMCSA license. FMCSA lacks the authority to prevent and punish these types of fraud.

And Holmes Norton added that in 2019, a Department of Transportation Administrative Law Judge (ALJ) ruled that FMCSA lacks authority to assess civil penalties for violations of commercial regulations and registration requirements, including unauthorized brokerage and for failure to return household goods to consumers.

“Under current law, as interpreted by the ALJ's decision and final agency order, FMCSA may not assess civil penalties for violations of commercial regulations,” she said. “Instead, the Department of Justice must initiate an action in federal court. This bill would reverse the ALJ's decision and provide explicit authority for FMCSA to adjudicate and assess civil penalties for unfair business practices and consumer protection violations, as well as give FMCSA authority to enforce roadway safety regulations against fraudsters. This bill would also provide explicit authority to FMCSA to withhold registration from any applicant that fails to provide a valid principal place of business or disclose common ownership with any other registered entities at the time of registration. Household goods carriers, brokers and freight forwarders have registered.”

As for the TIA, Anne Reinke, the organization’s president & CEO told LM that while it is unlikely this bill will be signed into law during this current session of Congress, due to it being an election year, the focus, for now, is to build up support for it, in order for it to get reintroduced during the next session.

“When we hear from FMCSA, they say that they cannot issue civil penalties, or enforce its current regulations, due to legacy IT systems,” she said. “This legislation is simply taking the excuses away from them by saying that they do have the authority to issue civil penalties or to cross-reference the principal place a business should be…not P.O. boxes in UPS stores. There should be an address.

And one thing Reinke observed FMCSA should be doing that it is not doing is looking at shared common ownership, because there are companies that are not registered brokers buy are using a trucking MC (motor carrier) number to broker goods—or have any number of MCs under one person—for a fraudulent enterprise. To that end, she explained that the more things like this can be revealed, with the FMCSA being the organization revealing it, will be better off for TIA’s membership, as TIA membership regularly check the FMCSA’s website.

“If that site is not worth checking [for these types of things], that is a problem, she said.

When asked how in what ways TIA is working with its membership on fraud-related efforts, Reinke said that, in addition to advocacy, at both the Congressional and regulatory levels, TIA has been involved with FMCA listening sessions on registration improvements, while also offering up various thoughts and ideas on the subject.

“We also have an education piece, with a fraud course and a fraud framework,” she said, “The fraud course is a 15-minute session that basically gives our members an ability to understand what is going on in a constantly-changing landscape. It is about alerting our members on how to educate themselves about the different types of fraud occurring.”

Reinke described the fraud framework as a detailed list of things related to fraud that TIA members have experienced, including things like case studies, how to contact law enforcement and other steps need to take to address fraud.

What’s more, she noted how TIA has a fraud task force, with one of its key efforts focused on a data collection effort from around 125 TIA members that have provided TIA with data about the types of fraud they have seen, the amount of money they had to spend, or lose, related to fraud, and the various commodities that seem to be the highest risk, with electronics at the top of that list, followed by solar panels.

“We are going to extrapolate this to say if 125 TIA members are dealing with this, can you imagine what the actual landscape looks like?” she said. “If we can drop this in the hands of thew FMCSA, law enforcement, and Congress, it can help them to better realize the scope of the problem.”