Moving Fraud - Overview
Commercial
Enforcement and
Investigations
Division
What is Moving Fraud?
Commercial Enforcement and Investigations Division
 Deceptive Business Practices by predatory
Movers, Auto Transporters and Brokers upon
American Consumers.
 Moving Fraud manifests itself through many
different schemes, in mostly via the Internet.
Federal Motor Carrier Safety Administration
The Most Serious Moving
Fraud Schemes
HOW THEY WORK
Federal Motor Carrier Safety Administration
The Hostage Load Scheme
Commercial Enforcement and Investigations Division
Consumer finds Rogue Mover on the Internet and
receives (often unrealistically) Low Estimate
Consumer takes the bait and give up
possessions to Rogue Mover
SURPRISE!!! A dramatic increase in the Estimate
occur and the Consumer must pay extra cost or no
delivery
If Consumer doesn’t pay shipment is often lost, and if
Consumer does pay the shipment is delivered but is
often looted and/or severely damaged
The Chicago Hostage Load Scheme
Commercial Enforcement and Investigations Division
Victim finds
Rogue Mover
on the Internet
Rogue Mover
misses delivery
date
Rogue Mover
offers price far
below market
rate
Victim tenders
deposit, usually
cash
Rogue Mover has
disappeared with
shipment
Rogue Mover
takes
Possession of
Victim’s HHG
Shipment is looted
of high value items
and the remainder
is abandoned
The Broker-Carrier Hostage
Scheme
Commercial Enforcement and Investigations Division
The Rogue Broker, using its Internet Website,
misrepresents its operation as a Full Service Mover
The Consumer, responding to the Broker’s Website, is
offered an Estimate appears to be a good deal, maybe
even a great deal
The Consumer pays a deposit that the Broker keeps as
its compensation still believing that the Broker is the
Mover, and the Consumer is passed to the Mover
The Mover handling the shipment, will surprise the
Consumer with a higher price for the move, after it has
control of the Consumer’s property
Moving Fraud is more than
just a Civil Dispute
OTHER STATE AND FEDERAL LAWS ARE
VIOLATED TO PERPETRATE MOVING FRAUD
Federal Motor Carrier Safety Administration
The Rogue Mover Problem(s)
Commercial Enforcement and Investigations Division
Shipments Held Hostage
Rogue
Mover
Credit Card Fraud
Fraudulent Documents
False Advertising
Tax Evasion
Internet and Wire Fraud
Labor Law Violations
False Identities
The Impact of Moving Fraud
Commercial Enforcement and Investigations Division
 Hundreds of American Consumers are
swindled out of cash and property;
 Rogue movers are parasites on the Industry
depriving legitimate movers of business, often
permanently; and
 Rogue movers are often noncompliant of state
and local laws including tax laws creating a
burden on municipal and state governments.
Federal Motor Carrier Safety Administration
Moving Fraud Complaints in
Calendar Year 2011
Commercial Enforcement and Investigations Division
 2851 Complaints overall
 588 Complaints of Property held Hostage
(Approximately 21%)
 1538 Complaints of Deceptive Practices
concerning Estimates and Charges
(Approximately 54%)
The Profile of the Moving Fraud
Victim
Commercial Enforcement and Investigations Division
 Full Spectrum of the Middle Class
 Educated to Well Educated
 Fluent in the use of the Internet
 Accustomed to high quality customer service:
• Expectation that demands will be quickly met; and
• Highly susceptible to patronization and social engineering.
Noteworthy Victims of Rogue
Movers
Commercial Enforcement and Investigations Division
 An NBA Player
 A Detective Lieutenant from a large city
police department
 Husband and Wife, both Prosecuting
Attorneys
 A Math Professor from an Ivy League
University
States with the Highest Number of
Moving Fraud Complaints – CY2011*
Commercial Enforcement and Investigations Division
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Florida
California
Texas
New York
New Jersey
Illinois
Georgia
Indiana
Virginia
Nevada
*Based on Complaints submitted to the National Consumer Complaint Database
Federal Motor Carrier Safety Administration
Metropolitan Areas were Rogue
Movers are the most Prevalent
Commercial Enforcement and Investigations Division
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Los Angeles
Miami-Fort Lauderdale
New York (including Northern New Jersey)
Chicago (including Eastern Indiana)
Houston
Dallas
Atlanta
Federal Motor Carrier Safety Administration
Metropolitan Areas where Rogue Mover
Activity is Present and Emerging
Commercial Enforcement and Investigations Division
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Las Vegas
Washington-Baltimore
Denver
Seattle-Tacoma
Kansas City
Boston
Federal Motor Carrier Safety Administration
Commercial Enforcement and Investigations Division
Consumer Protection and Taking on
Moving Fraud
Commercial
Enforcement and
Investigations
Division
Evolution of Consumer Protection
in Interstate Household Goods
Commercial Enforcement and Investigations Division
Federal Motor Carrier Safety Administration
The Household Goods Movers Oversight
and Reform Act of 2005
Commercial Enforcement and Investigations Division
 Increased the penalties for violations of
certain statutes and regulations, specifically
holding a HHG shipment hostage and
operating without authority
 Allowed FMCSA to delegate some of its
authority to state enforcement agencies and
state attorneys general
Federal Motor Carrier Safety Administration
The FMCSA Household Goods
Compliance and Enforcement Program
Commercial Enforcement and Investigations Division
Outreach
Complaint
Handling and
Data Analysis
Partnerships
and
Information
Sharing
Enforcement
Enforcement
INVESTIGATIVE AND ENFORCEMENT
STRATEGIES AND CHALLENGES
Federal Motor Carrier Safety Administration
Understanding the Authority of FMCSA
Commercial Enforcement and Investigations Division
 What FMCSA CAN Do:
• Enforce very specific
Federal Statutes and
Regulations;
• Initiate civil enforcement
actions that result in fines;
• Suspend or Revoke a
motor carrier or broker’s
authority to operate
interstate; and
• Share Information with
other agencies to support
investigations
Federal Motor Carrier Safety Administration
 What FMCSA CAN’T Do:
• Initiate a criminal
prosecution on its own;
• Act as an advocate for
victims;
• Detain individuals or seize
property;
• Liberate and Recover
Personal Property on
behalf of Victims; or
• Physically shut down a
business.
Commercial Enforcement and Investigations Division
Federal Motor Carrier Safety Administration
Partnerships and
Information Sharing
FMCSA WORKING WITH OTHERS TO
COMBAT MOVING FRAUD
Federal Motor Carrier Safety Administration
Household Goods Enforcement
Partnerships
Commercial Enforcement and Investigations Division
 The United States Congress recognized that it
would take a Joint Effort to combat Moving
Fraud and addressed it in Household Goods
Mover Oversight and Reform Act of 2005 part
of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users
(SAFETEA-LU) legislation.
Household Goods Enforcement
Partnerships
Commercial Enforcement and Investigations Division
 SAFETEA-LU legislation gave state enforcement
agencies (49 U.S.C. § 14710) and state attorneys
general (49 U.S.C. § 14711) the authority to
enforce the Federal household goods consumer
protection statutes and regulations.
 Working with FMCSA states can use this
authority to better combat moving fraud and
address the negative impact of rogue movers in
their communities.
Summary of 49 U.S.C. § 14710
Commercial Enforcement and Investigations Division
 States have authority to enforce Federal
consumer protection statutes and regulations
that apply to individual shippers of household
goods.
 States can initiate enforcement actions for
violations of the Federal statutes and regulations
using their adjudication systems in their states.
 States keep fines and penalties from those
enforcement actions.
Information Sharing
Commercial Enforcement and Investigations Division
 49 U.S.C. § 14710 also gave FMCSA a mandate
to establish and implement an Enforcement
Assistance Outreach Plan allowing the sharing
of information and enhancing the
coordination and effective enforcement of
Federal laws and regulations between and
among Federal and State law enforcement
and consumer protection authorities.
Summary of 49 U.S.C. § 14711
Commercial Enforcement and Investigations Division
 The State Attorney General, as “parens
patriae”, can initiate a civil enforcement case
in Federal District Court against interstate
movers and brokers in violation of Federal
consumer protection statutes and regulations
Working with FMCSA
Commercial Enforcement and Investigations Division
 Contributing Partners
• Agencies given access to the National Consumer Complaint
Database to forward complaints and other information directly
into the system
 Enforcement Partners
• State agencies with written agreements allowing access to
FMCSA systems to enforce Federal statutes and regulations
• Federal agencies with written agreements to work together on
enforcement efforts
 Information Sharing with Law Enforcement
• Federal, State, and Local law enforcement agencies and
prosecutors can receive information from FMCSA via USDOT OIG
to support criminal investigations
Federal Motor Carrier Safety Administration
Contributing Partners
Commercial Enforcement and Investigations Division
 An agency that wants to become a Contributing
Partner need only register with FMCSA, there is no cost
to register
 That agency is then issued a User ID and Password to
access the System to submit complaints and other data
by upload
 FMCSA offers training at no expense to the
Contributing Partner how to access the System and
submit complaints and data
 Training is in Webinar format and takes approximately
one to two hours
Federal Motor Carrier Safety Administration
The FMCSA – State Household Goods
Enforcement Partnership
Commercial Enforcement and Investigations Division
How the Partnerships works
FMCSA
Federal
Agencies
State
Agencies
What does FMCSA bring to the
Partnership?
Commercial Enforcement and Investigations Division
 Training
• HHG Enforcement Course and In-Service training
• Training on FMCSA Systems
 Access to FMCSA Systems
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•
•
•
NCCDB
MCMIS and Licensing & Insurance (L&I) database
Query Central
FMCSA Compass Portal
Commercial Enforcement and Investigations Division
State Agencies Define their Role in
an Enforcement Partnership
through the Memorandum of
Agreement with FMCSA
Current Enforcement Partners
Commercial Enforcement and Investigations Division
New Enforcement Strategies Using
Partnerships
Commercial Enforcement and Investigations Division
 Improved Information Sharing through the
Moving Fraud Working Group
 Forming Task Force Groups that conduct major
investigations targeting specific rogue operations
 Joint Investigations involving FMCSA and other
agencies focusing on Moving Fraud and other
noncompliance
Commercial Enforcement and Investigations Division
Objective of the Task Force Group
Commercial Enforcement and Investigations Division
 The Task Force Group, coordinated by FMCSA
and composed of FMCSA investigators,
enforcement partners, and other agencies as
needed, can attack the problem of rogue
movers from different directions
simultaneously.
Commercial Enforcement and Investigations Division
Targeting
Rogue
Mover
Activity
Federal
Consumer
Protection
Violations
State Labor,
Motor Vehicle,
and Tax Law
Violations
Fraudulent and
Falsified
Documents
Internet,
Insurance, Credit
Card Fraud, and
Theft
Commercial Enforcement and Investigations Division
Federal Motor Carrier Safety Administration
Contacts
Commercial Enforcement and Investigations Division
 General Inquiries:
• Brodie Mack, Team Leader, Commercial Enforcement
and Investigations Division
o brodie.mack@dot.gov
o 202-366-8045
 To Become a Partner with FMCSA:
• Monique Riddick, Transportation Specialist,
Commercial Enforcement and Investigations Division
o monique.riddick@dot.gov
o 202-385-2313
Federal Motor Carrier Safety Administration