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Commercial Enforcement and Investigations Division Moving Fraud - Overview.

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Presentation on theme: "Commercial Enforcement and Investigations Division Moving Fraud - Overview."— Presentation transcript:

1 Commercial Enforcement and Investigations Division Moving Fraud - Overview

2 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.

3 Federal Motor Carrier Safety Administration HOW THEY WORK The Most Serious Moving Fraud Schemes

4 Commercial Enforcement and Investigations Division 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

5 Commercial Enforcement and Investigations Division 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

6 Commercial Enforcement and Investigations Division 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

7 Federal Motor Carrier Safety Administration OTHER STATE AND FEDERAL LAWS ARE VIOLATED TO PERPETRATE MOVING FRAUD Moving Fraud is more than just a Civil Dispute

8 Commercial Enforcement and Investigations Division The Rogue Mover Problem(s) Internet and Wire Fraud False Advertising Credit Card Fraud False Identities Rogue Mover Tax Evasion Fraudulent Documents Shipments Held Hostage Labor Law Violations

9 Commercial Enforcement and Investigations Division Federal Motor Carrier Safety Administration 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.

10 Commercial Enforcement and Investigations Division 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%)

11 Commercial Enforcement and Investigations Division 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.

12 Commercial Enforcement and Investigations Division 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

13 Commercial Enforcement and Investigations Division Federal Motor Carrier Safety Administration States with the Highest Number of Moving Fraud Complaints – CY2011* 1.Florida 2.California 3.Texas 4.New York 5.New Jersey 6.Illinois 7.Georgia 8.Indiana 9.Virginia 10.Nevada *Based on Complaints submitted to the National Consumer Complaint Database

14 Commercial Enforcement and Investigations Division Federal Motor Carrier Safety Administration 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

15 Commercial Enforcement and Investigations Division Federal Motor Carrier Safety Administration Metropolitan Areas where Rogue Mover Activity is Present and Emerging  Las Vegas  Washington-Baltimore  Denver  Seattle-Tacoma  Kansas City  Boston

16 Commercial Enforcement and Investigations Division

17 Consumer Protection and Taking on Moving Fraud

18 Federal Motor Carrier Safety Administration Commercial Enforcement and Investigations Division Evolution of Consumer Protection in Interstate Household Goods

19 Commercial Enforcement and Investigations Division Federal Motor Carrier Safety Administration 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

20 Commercial Enforcement and Investigations Division The FMCSA Household Goods Compliance and Enforcement Program Outreach Complaint Handling and Data Analysis Partnerships and Information Sharing Enforcement

21 Federal Motor Carrier Safety Administration INVESTIGATIVE AND ENFORCEMENT STRATEGIES AND CHALLENGES Enforcement

22 Commercial Enforcement and Investigations Division Federal Motor Carrier Safety Administration 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.

23 Federal Motor Carrier Safety Administration Commercial Enforcement and Investigations Division

24 Federal Motor Carrier Safety Administration FMCSA WORKING WITH OTHERS TO COMBAT MOVING FRAUD Partnerships and Information Sharing

25 Commercial Enforcement and Investigations Division 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.

26 Commercial Enforcement and Investigations Division 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.

27 Commercial Enforcement and Investigations Division Summary of 49 U.S.C. §  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.

28 Commercial Enforcement and Investigations Division Information Sharing  49 U.S.C. § 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.

29 Commercial Enforcement and Investigations Division Summary of 49 U.S.C. §  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

30 Commercial Enforcement and Investigations Division Federal Motor Carrier Safety Administration 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

31 Commercial Enforcement and Investigations Division Federal Motor Carrier Safety Administration 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

32 Commercial Enforcement and Investigations Division The FMCSA – State Household Goods Enforcement Partnership How the Partnerships works State Agencies Federal Agencies FMCSA

33 Commercial Enforcement and Investigations Division 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

34 Commercial Enforcement and Investigations Division State Agencies Define their Role in an Enforcement Partnership through the Memorandum of Agreement with FMCSA

35 Commercial Enforcement and Investigations Division Current Enforcement Partners

36 Commercial Enforcement and Investigations Division 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

37 Commercial Enforcement and Investigations Division

38 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.

39 Commercial Enforcement and Investigations Division 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

40 Federal Motor Carrier Safety Administration Commercial Enforcement and Investigations Division

41 Federal Motor Carrier Safety Administration Contacts  General Inquiries: Brodie Mack, Team Leader, Commercial Enforcement and Investigations Division o o  To Become a Partner with FMCSA: Monique Riddick, Transportation Specialist, Commercial Enforcement and Investigations Division o o


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