Commercial Enforcement and Investigations Division Moving Fraud - Overview.

Commercial Enforcement and

Investigations Division

Moving Fraud - Overview

Commercial Enforcement and Investigations Division

Federal Motor Carrier Safety Administration

What is Moving Fraud?

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.


HOW THEY WORK

The Most Serious Moving Fraud Schemes


The Hostage Load Scheme

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

Victim finds Rogue Mover

on the Internet

Rogue Mover offers price far below market

rate

Victim tenders deposit, usually

cash

Rogue Mover takes

Possession of Victim’s HHG

Rogue Mover misses delivery

date

Rogue Mover has disappeared with

shipment

Shipment is looted of high value items and the remainder

is abandoned


The Broker-Carrier Hostage Scheme

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


OTHER STATE AND FEDERAL LAWS ARE VIOLATED TO PERPETRATE MOVING FRAUD

Moving Fraud is more than just a Civil Dispute


The Rogue Mover Problem(s)

Internet and Wire Fraud

False AdvertisingCredit Card Fraud

False IdentitiesRogue Mover

Tax EvasionFraudulent Documents

Shipments Held HostageSafety

ViolationsTheft

Labor Law Violations



The Impact of Moving Fraud

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.


Moving Fraud Complaints in Calendar Year 2011

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

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

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*

1. Florida2. California3. Texas4. New York5. New Jersey6. Illinois7. Georgia8. Indiana9. Virginia10. Nevada*Based on Complaints submitted to the National Consumer Complaint Database



Metropolitan Areas were Rogue Movers are the most Prevalent

Los Angeles Miami-Fort Lauderdale New York (including Northern New Jersey) Chicago (including Eastern Indiana) Houston Dallas Atlanta



Metropolitan Areas where Rogue Mover Activity is Present and Emerging

Las Vegas Washington-Baltimore Denver Seattle-Tacoma Kansas City Boston


A Surge of Moving Fraud Complaintsis Anticipated to Occur in the

Hurricane Sandy Disaster Area

Commercial Enforcement and

Investigations Division

Consumer Protection and Taking on Moving Fraud



Evolution of Consumer Protection in Interstate Household Goods



The Household Goods Movers Oversight and Reform Act of 2005

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


The FMCSA Household Goods Compliance and Enforcement Program

OutreachComplaint

Handling and Data Analysis

Partnerships and Information

Sharing


INVESTIGATIVE AND ENFORCEMENT STRATEGIES AND CHALLENGES

Enforcement



Understanding the Authority of FMCSA

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

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.



Rogue Moving Operations doesharm to Consumers, Industry,Communities, big and small,

and cannot be solved byFMCSA alone


FMCSA WORKING WITH OTHERS TO COMBAT MOVING FRAUD

Partnerships and Information Sharing


Household Goods Enforcement Partnerships

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

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

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

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

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

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



Contributing Partners

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


The FMCSA – State Household Goods Enforcement Partnership

How the Partnerships works

State Agencies

Federal

Agencies

FMCSA


What does FMCSA bring to the Partnership?

Training• HHG Enforcement Course and In-Service training• Training on FMCSA Systems

Access to FMCSA Systems• NCCDB• MCMIS and Licensing & Insurance (L&I) database• Query Central• FMCSA Compass Portal


State Agencies Define their Role in an Enforcement Partnership

through the Memorandum of Agreement with FMCSA


Current Enforcement Partners


New Enforcement Strategies Using Partnerships

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


The Task Force Groups andJoint InvestigationsComplies with the

Mandate for anEnforcement Assistance

Outreach Plan


Objective of the Task Force Group

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.


Federal Consumer Protection Violations

State Labor, Motor Vehicle, and Tax Law Violations

Internet, Insurance, Credit Card Fraud, and Theft

Fraudulent and Falsified Documents

Targeting Rogue Mover Activity



Questions ?



Contacts

General Inquiries:• Brodie Mack, Team Leader, Commercial Enforcement

and Investigations Divisiono [email protected] 202-366-8045

To Become a Partner with FMCSA:• Monique Riddick, Transportation Specialist, Commercial

Enforcement and Investigations Divisiono [email protected] 202-385-2313

Commercial Enforcement and Investigations Division Moving Fraud - Overview.

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Transcript of Commercial Enforcement and Investigations Division Moving Fraud - Overview.