Hiring a Moving Broker Could Leave You Broke

August is peak moving season, as families rush to get settled in their new locations before the school year starts. Every year, 43 million Americans move, and many of them now search for movers on the Internet.

Watch out!

Yes, I just "yelled" those words because hiring somebody to transport everything you own puts you in a very vulnerable position.

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There's a little-known industry you need to be aware of before you relocate. They're called "moving brokers" and experts say the very structure of how they work can cause a lot of headaches for consumers.

Many of the moving sites on the Internet are actually run by moving brokers. (Often they let you think they are movers when, in fact, they are just brokers.) These are middlemen who don't actually move you themselves. Instead, they give you an estimate and then find a mover to haul your stuff.

The problem can be that, when things go wrong, the broker blames the mover and the mover blames the broker and you blame them both.

Unfortunately, the government isn't doing much to protect you, so you'll have to watch out for yourself. In July 2005, Congress passed a law ordering the Department of Transportation to put rules in place to protect people from bad moving brokers, but three years later -- still no rules.

In fact, the new rules governing moving brokers are not expected to be introduced until spring 2009. So here's what to look out for.

Movers Giving Phone Estimates

Every moving broker I know of gives its estimates by phone. They ask you to walk through your house and describe what is in each room. There are a couple of problems with that.

First of all, the Federal Motor Carrier Safety Administration (FMCSA), which regulates interstate movers and brokers, says phone estimates -- particularly estimates that seem too good to be true -- are a red flag that you may be dealing with a rogue mover who will pick your goods up and then hold them hostage until you've agreed to pay a substantially higher fee.

Second, you are not a professional moving estimator. When your move is more expensive than quoted, the broker can them blame you and say you weren't honest about how much furniture you had. Even if you're thorough, it's hard for a non-expert to know how many boxes it takes to hold all the books in your living room. And it's easy to forget about things like the grill out on your patio.

Third, the broker is not the one who has to actually transport your goods for the price quoted. So he does not have that personal motivation to make sure his price will cover it. If the quote is too low, loopholes in the law make it fairly easy for the mover to throw out the broker's quote and raise the price. Countless consumers have complained that they received lowball quotes from moving brokers and then the actual mover jacked up the price.

Watch Out for Up-Front Fees

Most moving brokers charge a deposit in advance. But it's not really a deposit on the balance of the move because it doesn't go to the mover. It's the broker's fee and it can be several thousand dollars. It can also be a problem. Once again, the FMCSA lists up-front fees as a red flag, because too many businesses have been known to charge a fee in advance then not provide the promised service. Reputable moving companies don't charge large deposits in advance and usually accept full payment upon delivery of your goods.

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