by Keith Laing, The Hill Newspaper
Democrats in the Senate packed a committee hearing Thursday with sharp criticism of online moving companies for an industry trend of increasing prices of long-distance moves after taking possession of a customer’s furniture.
Senate Commerce, Science and Transportation Committee Chairman Jay Rockefeller (D-W.Va.) said the practice amounted to “extortion.”
“American consumers use moving companies only a few times in their lives, so we shouldn’t expect them to understand the complicated rules governing interstate shipping,” Rockefeller said. “And even if they do their homework before they hire a moving company, consumers don’t understand all of the fine print on the paperwork … they are asked to sign as their possessions are loaded on to a moving truck.”
Rockefeller attributed the industry’s ability to change prices on movers to the rapid growth of online moving companies to the internet. Having an online presence allows companies to lure customers with low prices while skirting state regulations, he said.
“It is an ugly fact that there are some moving companies in this country that are willing to take advantage of consumers’ lack of information and experience,” he said. “Here’s how it works: Internet moving brokers sign up consumers by offering them very low, so-called ‘binding’ estimates for their moves. But these brokers don’t own any trucks.
“On the day of their moves, many consumers learn for the first time that an entirely different company will be moving their possessions,” Rockefeller continued. “A company they’ve never heard of. And the sketchy companies that show up on consumers’ moving days routinely jack up the price of the moves after they have loaded all of the consumers’ worldly possessions in the back of their trucks.”
Sen. Frank Lautenberg (D-N.J.) agreed with Rockefeller’s strong characterization of the online moving industry.
“Unscrupulous movers devise ways to cheat unsuspecting customers,” Lautenberg said. “The most common method has been for companies to give a lowball estimate for the cost of a move. Then — after they have a family’s property in their possession — they demand more money. In effect, they hold the family’s possessions hostage — everything from valuables to priceless keepsakes like photographs.”
Democrats on the panel brought in 28-year-old New York resident Reana Kovalcik, who told lawmakers Thursday that a moving company called World Wide Van Lines quoted her and her boyfriend a price of $898 for her move from Chicago to New York City.
But Kovalcik told senators that another company called Able Moving showed up on her moving day, and they increased the cost of her move to $2,000.
“Able claimed that we were being charged for packing materials, of which we used none, and for the additional weight of the truck,” Kovalcik said. “Although we asked for a reweigh of the truck, to which we had determined we were legally entitled, we were never provided with the actual weight of our items. We attempted to reason with Able and negotiate the delivery of our belongings, but were met only with verbal abuse and demands for the money.”
Kovalcik told lawmakers that even when she agreed to pay the additional cost to retrieve her furniture, the Able movers refused to deliver it.
“When we finally consented to pay the $2,000 upon delivery, the Able movers arrived in an unmarked truck, supposedly containing our belongings, on April 18, 2010,” she said. “The movers demanded cash on delivery, but were unable to provide us with contracts that justified the new amounts.”
Kovalcik said she called the police, but she said “the movers took off in the truck with our belongings.”
Kovalcik said her furniture was discovered badly damaged in a warehouse in New Jersey six months after her initial move.
American Moving and Storage Association (AMSA) President Linda Darr called companies like the ones Kovalcik was dealing with “unscrupulous rogue groups posing as legitimate household goods movers and brokers.
“AMSA believes that ensuring a strong, compliant household goods moving industry is available to household goods consumers is one way to continue to combat the ongoing problem of criminals preying on those consumers,” she said. “AMSA has taken effective action to help protect the public by drawing sharp distinctions between the legitimate moving industry and the criminals merely posing as movers.”
However, the president of one such company that was removed from the AMSA, Budget Van Lines, testified that companies like his are “brokers,” not moving companies.
“Let me take a moment to explain what household goods transportation brokers do, as it is often misunderstood,” President Jason Romrell said. “As you know, brokering is a common business model in many industries, from travel to insurance sales to the groceries on the supermarket shelves. Brokering is an effective and common business model because it increases options and saves businesses and consumers time and money.”
Lawmakers on the Senate Commerce Committee were largely unconvinced, however. Rockefeller said companies that market themselves online as movers were “not only hurting consumers; they are also damaging the reputation of the moving industry, and the vast majority of moving companies that follow the law and give the customers good service at a fair price.
“We need to redouble our efforts to end these abuses, whether that means improving consumer education or passing tougher laws,” he said. “We need to give our regulators and law enforcement agencies more authority and resources to track down these companies and put them out of business.”