Hiring a Moving Broker Could Leave You Broke
Beware the moving brokers: They could leave you broke.
Aug. 18, 2008 — -- 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.
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.
Some customers complain about moving brokers who call them back shortly before their move and say they need additional deposit money because the move is going to be more work than they first thought. This is questionable because the broker is not the one who does the work, but he is probably the one who pockets the deposit. It may just be one more way for a salesman to make extra money off your move. Is it worth it to you to spend thousands of dollars on somebody whose primary service to you is writing a furniture list over the phone and then picking a mover for you?
Unknown Movers
When you arrange your move through a broker, you may not know who the actual mover is going to be until the last minute. Or you may be told one mover will be handling your move, then another shows up on moving day. If you're going to entrust somebody with all your worldly possessions, don't you want to check his or her reputation first? The FMCSA says it's crucial. After all, the mover could be unlicensed or uninsured. It could be one of these fly-by-night outfits that steals your stuff or loads it up and then demands more money before they'll unload it.
Elisabeth Leamy's Tips for a Smooth Move
So here's my advice: For any movers you're considering, plug their name into a search engine. Put it in quotes along with the words "complaint" or "scam." See what your search reveals. If you get back lots of negative information and you see clear trends among the complaints, watch out.
You can check government complaint records at http://ai.volpe.dot.gov/hhg/search.asp.
Only do business with reputable companies that will come to your house and give you an in-person estimate. That's the only accurate way, and the best part is, most moving companies do it for free. Get at least three of these estimates.
Insist on a binding, "guaranteed not to exceed" estimate. That means, if your goods weigh less than the estimator thought, you will pay less. If they weigh more, you will still pay what the estimator quoted you.