Source: http://www.govpulse.us/entries/2007/02/08/E7-2106/brokers-of-household-goods-transportation-by-motor-vehicle
Timestamp: 2014-03-11 14:01:37
Document Index: 531930615

Matched Legal Cases: ['art 386', 'art 386', 'art 365', 'art 366', 'art 387', 'art 371', 'art 379', 'art 375', 'art 375', '§ 375', 'art 375', 'art 375', 'art 375', 'art 371']

govpulse | Brokers of Household Goods Transportation by Motor Vehicle
FMCSA proposes to amend its regulations to require brokers who arrange the transportation of household goods in interstate or foreign commerce for consumers to comply with additional consumer protection requirements. This rulemaking is in response to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) and a petition for rulemaking from the American Moving and Storage Association. This rulemaking is intended to educate and inform consumers and brokers about fair and competitive business practices proposed by the FMCSA.
Existing FMCSA Regulations Applicable to Household Goods Brokers
Previous Household Goods Rulemaking
Summary of Responses to ANPRM
Continuing Problems With Household Goods Brokers
Section 371.101If I operate as a household goods broker in interstate or foreign commerce, must I comply with subpart B of this part?
Section 371.103What are the definitions of terms used in this subpart?
Section 371.105Must I use a motor carrier that has a valid U.S. DOT number and valid operating authority issued by FMCSA to transport household goods in interstate or foreign commerce?
Section 371.107What information must I display in my advertisements and Internet web homepage?
Section 371.109Must I inform individual shippers which motor carriers I use?
Section 371.111Must I provide individual shippers with Federal consumer protection information?
Section 371.113May I provide individual shippers with a written estimate?
Section 371.115Must I maintain agreements with motor carriers before providing written estimates on behalf of these carriers?
Section 371.117Must I provide individual shippers with my policies for canceling a shipment?
Section 371.119What must I do before I arrange with a motor carrier to transport household goods in interstate or foreign commerce?
Section 371.121What penalties may FMCSA impose for violations of this part?
Section 375.409May household goods brokers provide estimates?
Appendix B to Part 386—Penalty Schedule; Violations and Maximum Monetary Penalties
Section 387.307Property broker surety bond or trust fund
Appendix B to Part 386—Penalty Schedule; Violations and Monetary Penalties
FMCSA must receive your comments by May 9, 2007.
You may submit comments, identified by DOT DMS Docket Number FMCSA-2004-17008, by any of the following methods:
•Agency Web Site: http://dms.dot.gov. Follow the instructions for submitting comments on the DOT electronic docket site.
•Mail: Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001.
•Hand Delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal Holidays.
Instructions: All submissions must include the agency name and docket number (FMCSA-2004-17008) or Regulatory Identification Number (RIN) for this rulemaking (RIN 2126-AA84). Note that all comments received will be posted without change to http://dms.dot.gov, including any personal information provided. Please see the Privacy Act heading for further information.
Ms. Dorothea Grymes, Household Goods Team, Commercial Enforcement Division, (202) 385-2400, FMCSA, Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590.
Legal Basis for the Rulemaking ↑
The Secretary of Transportation's (Secretary) general jurisdiction to establish regulations concerning the procurement by property brokers of for-hire transportation in interstate or foreign commerce is found at 49 U.S.C. 13501. Brokers of household goods are a subset of all property brokers but specifically register with FMCSA as household goods brokers. This rulemaking applies only to household goods brokers procuring for-hire transportation in interstate or foreign commerce. The Secretary is authorized to collect from household goods brokers “information the Secretary decides is necessary” to ensure a transportation system that meets the needs of the United States. (49 U.S.C. 13101 and 13301). Brokers of household goods are required to register with the Secretary by 49 U.S.C. 13904(a)(1). Section 4142 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 109-59), which made changes to certain other registration requirements, did not change registration requirementsfor household goods brokers. The Secretary also has authority to adopt regulations applicable to registered household goods brokers which “shall provide for the protection of shippers by motor vehicle.” (49 U.S.C. 13904(c)) The Secretary's authority to inspect and copy household goods broker records is found at 49 U.S.C. 14122. The Secretary has delegated these various authorities to the FMCSA Administrator. (49 CFR 1.73(a)).
This rulemaking is based on the statutory provisions cited above and on the Household Goods Mover Oversight Enforcement and Reform Act of 2005, otherwise known as Title IV, Subtitle B of SAFETEA-LU. This rulemaking focuses on the business practices of household goods brokers engaged in interstate or foreign commerce. Household goods brokers arrange, but do not perform, the transportation of household goods shipments. FMCSA will address the SAFETEA-LU provisions specifically directed to household goods motor carriers in separate rulemakings, as appropriate.
While section 4205 of SAFETEA-LU contains estimating requirements for household goods motor carriers, the general authority cited above allows FMCSA to establish such requirements for household goods brokers.
Section 4212 of SAFETEA-LU directs the Secretary to require a household goods broker to provide shippers with the following information whenever the broker has contact with a shipper or a potential shipper:
1. The broker's U.S. DOT number.
2. The FMCSA pamphlet titled, “Your Rights and Responsibilities When You Move.”
3. A list of all motor carriers providing transportation of household goods used by the broker and a statement that the broker is not a motor carrier providing transportation of household goods.
Section 4209 adds new civil penalties for unlawful broker estimating practices and increases existing civil penalties for providing motor carrier or broker services subject to FMCSA jurisdiction without being registered with FMCSA.
Existing FMCSA Regulations Applicable to Household Goods Brokers ↑
Household goods brokers have been regulated by FMCSA and its predecessor agencies for many years and a number of regulations apply to them, including registration requirements (49 CFR part 365), process agent requirements (49 CFR part 366) and financial responsibility requirements (49 CFR part 387). Section 387.307 requires property brokers, including household goods brokers, to maintain a surety bond or trust fund agreement in the amount of at least $10,000 to provide for payments to motor carriers or shippers if the broker fails to carry out its agreement to supply transportation by authorized motor carriers.
Part 371 specifies general property broker transaction record requirements, prohibits misrepresentation of the broker's name or non-carrier status, and prohibits certain rebating and compensation practices. Part 379 specifies general recordkeeping time periods.
FMCSA can also issue orders to compel compliance, impose civil monetary penalties, revoke the broker's license, or seek federal court orders to stop statutory and/or regulatory violations. Because household goods brokers do not provide the actual transportation, they are not subject to FMCSA's safety jurisdiction.
Previous Household Goods Rulemaking ↑
FMCSA regulations on household goods motor carriers and the proposed regulations for household goods brokers are intended for the protection of individual shippers (as defined in 49 U.S.C. 13102(13) added by section 4202 of SAFETEA-LU). FMCSA regulations on household goods motor carriers and the proposed regulations for household goods brokers do not apply to corporate, government, or military-arranged and paid moves.
The Interstate Commerce Commission (ICC), one of FMCSA's predecessor agencies, concluded that household goods brokers may not provide estimates directly to shippers.
The ICC reasoned that shippers aggrieved by an act or omission of a broker would be unprotected by the household goods consumer protection regulations (currently codified at 49 CFR part 375) because only motor carriers were required to comply with these regulations. This problem was addressed in the Household Goods; Consumer Protection Regulations issued by FMCSA in 2003 (68 FR 35064; June 11, 2003), which substantially revised part 375.
In its 2003 rulemaking, FMCSA added a new § 375.409 that allowed a household goods broker to provide an estimate to a shipper if the following requirements are met:
1. There must be a written agreement between the broker and the motor carrier.
2. The written agreement must provide that the motor carrier adopts the broker's estimate as its own.
3. The motor carrier must ensure compliance with all the requirements of part 375 pertaining to estimates, including the requirement that the motor carrier must relinquish possession of the shipment if the shipper pays the motor carrier 110 percent of a non-binding estimate at the time of delivery.
In the preamble to the 2003 rulemaking FMCSA explained that the individual shipper would not be deprived of the protections provided in part 375, even if the broker could not be held directly responsible for compliance, because the motor carrier would still be held accountable for complying with part 375.
Petition for Rulemaking ↑
On March 6, 2003, the American Moving and Storage Association (AMSA) petitioned FMCSA to initiate a rulemaking to amend 49 CFR part 371, “Brokers of Property,” to impose specific additional requirements on household goods brokers. AMSA's main argument for additional rulemaking was its assertion that there were an increasing number of “moving-related” Web sites hosted by household goods brokers engaging in unfair business practices.
AMSA's petition states a significant number of the complaints it receives involve the same Internet companies, many of which are based in Florida. AMSA argues the fact these companies are involved in moves having no connection to Florida as an origin or destination demonstrates the impact of the Internet on these household goods broker arrangements and how the Internet is being used to entrap unsuspecting consumers. AMSA states it often receives complaints from consumers who have dealt with a Florida-based Internet broker, who in turn arranged a move from a non-Florida origin to another non-Florida destination. AMSA states once these brokers establish a business relationship with the consumer, they require payment of a deposit of several hundred dollars or more, fade from the picture, and leave the consumer to deal with, in most cases, a motor carrier who has failed to register with FMCSA. AMSA believes that a significant network of unscrupulous household goods brokers and household goods motor carriers isfunctioning with the sole purpose of bilking the moving public by demanding charges that bear no relation to the legitimate costs of moving, or by collecting charges for services that are not performed.
AMSA provided ten additional examples of complaints it has received to illustrate the nature of the problems being experienced by the moving public. The examples generally involve circumstances similar to the Florida example discussed in the previous paragraph.
AMSA wants FMCSA to amend our regulations to: