Staff Report on Internet Moving Brokers

A New Consumer Protection Problem in the Household Goods Moving Industry

September 19, 2012

WASHINGTON, D.C.— Chairman John D. (Jay) Rockefeller IV released a Committee staff report detailing the results of a year-long investigation into consumers’ complaints about distressing experiences with their moving companies and the potential abuses consumers face when moving across state lines. The investigation found that in many cases, Internet-based moving brokers and household goods carriers quote consumers one rate to move their goods, but then charged an exorbitant markup in order to complete the move—often after the carrier has already taken physical possession of the property. The staff report is available here.

“Thousands of consumers are often stuck at the mercy of abusive moving companies at one of the most vulnerable times in their lives,” said Rockefeller. “This investigation opened the doors to the world of Internet moving brokers and their tactics to mislead and confuse consumers. As more and more Americans feel comfortable arranging their moves online, these brokers will have access to a larger pool of consumers to deceive. We must put a stop to the practices these companies are using to swindle consumers.”

Key findings of the Committee Investigation:

  • The moving brokers with the most complaints filed with the FMCSA employed similar business practices and relied heavily on the Internet to generate business.  Consumers who used the brokers that generated the most complaints filed with the FMCSA described very consistent scenarios.  The consumers went online to shop for moving services and through an Internet search, usually conducted via a search engine, the consumers identified and contacted an “Internet moving broker.”  Frequently, the business names used by the brokers were often very similar to well-known, reputable brand names, like United Van Lines or Budget Truck Rental.  
  • The business practices that Internet moving brokers use to find customers, provide estimates, and arrange moves regularly confuse consumers.  Committee staff has interviewed dozens of the Internet moving brokers’ former customers who repeatedly stated that they were not made aware that they were hiring a broker, and that they were surprised when an entirely different company arrived on the day of their move.  Consumer complaints obtained by the Committee also regularly showed that consumers were not made aware they were hiring a broker, rather than a carrier.  The websites for Internet moving brokers often failed to clearly disclose the fact that they are merely brokers and that they do not play a role in the interstate moves that consumers are undertaking. 
  • Internet moving brokers have their customers pay “deposits” that are nothing more than their fees.  Internet moving brokers provided information to the Committee that showed they labeled their broker fees, which sometimes amounted to thousands of dollars, as “deposits.”  Consumers repeatedly stated that they were not aware these “deposits” were not dedicated to the payment of their actual moves.  Customers of Internet moving brokers frequently paid thousands of dollars in “deposits” to the Internet moving brokers and these “deposits” were never shared with the carriers performing the moves.  Consequently, before the consumers’ belongings were placed on trucks, they had already paid hundreds - and sometimes thousands - of dollars, to companies that played no role in the actual moves.   
  • Internet moving brokers never do on-site visits to catalog consumers’ belongings and determine the price estimates. Without conducting visual inspections of the consumers’ goods the brokers gave the consumers an estimated price for the moves.  The brokers’ estimates were usually significantly lower than the prices quoted by other moving companies that conducted on-site visits.
  • The “binding estimates” that Internet moving brokers provided to their customers frequently provided no price certainty.  Although the purpose of a “binding estimate” is to provide price certainty for a consumer undertaking an interstate move, consumers who booked their moves through Internet moving brokers often experienced significant price increases for their moves after the moves had begun.  Committee staff found multiple examples of price increases for thousands of dollars with very little justification for the increases. 
  • Internet moving brokers create the conditions for harmful moving experiences.  To convince consumers to do business with them, Internet moving brokers frequently provided very low estimates to consumers.  Because Internet moving brokers also routinely took substantial fees, labeled as “deposits,” many carriers inevitably attempted to make up the difference by increasing the price once the moves began.   
  • Internet moving brokers should be aware their practices are harming consumers.  Committee staff found a significant amount of evidence suggesting that Internet moving brokers should be aware that their practices are harming consumers.  Their former customers frequently complained to them about terrible moving experiences, including significant price increases and carriers holding their goods hostage.