Moving is considered one of life’s most stressful events, third only to the death of a loved one and divorce. Even a simple move requires significant time and effort. Moving across state lines can feel like producing a Broadway musical.
To combat the stress and cope with the logistics, many people turn to professional movers. Unfortunately, this often makes matters worse. In fact, the Better Business Bureau (BBB) received nearly 9,000 complaints about movers in 2014. The U.S. Department of Transportation receives about 4,000 complaints annually. The majority of grievances relate to pricing, uncooperative employees, and lost or damaged property.
Even with due diligence, consumers can still run into problems. In a recent 900-mile move, my fiancé and I experienced all of the above. Employees refused to give us the names of their supervisors or connect us to management after the price jumped $1,000 over our price quote and the movers arrived eight hours late. Time and again, the company declined to tell us where our belongings were or when they would arrive. Three weeks later, they appeared — with over $1,000 in damage. This all happened despite our checking the legitimacy of the company, reading reviews and calling the company to ask questions.
How is it that such problems occur on a regular basis? With more than 35 million Americans moving every year, and more than 7,000 companies operating across the country, some problems are inevitable, but the frequency of complaints indicates that more than a “few bad apples” are spoiling the moving industry.
Many thought the Internet would improve the industry since users can easily investigate a variety of companies. The Internet may be a double-edged sword in this case, however. Just as individuals can easily search for reviews, disreputable movers can create professional-looking websites and post fake reviews. By the time their ruse is discovered, it’s too late.
Some blame the problems on too little government regulation, so they call for more. On further inspection, however, it appears that more government involvement and more regulation have done little to help consumers. In fact, the laws governing interstate moving reward companies that behave like bandits — making the problem worse.
For example, in recent years the Federal Motor Carrier Safety Administration has answered calls for more government action by adding investigators, requiring movers to distribute information to customers and placing additional restrictions on companies entering the industry. Nevertheless, the number of complaints has not declined in the slightest.
Why? For one thing, federal regulation of movers means that local law enforcement has little to no authority. If a moving company is holding a person’s property, for example, local police are often powerless to intervene unless another law is violated.
The bigger problem is a statute known as the Carmack Amendment. Put in place in 1906, the law was designed to establish uniform guidelines for carriers’ liability during interstate shipments. While it sounds beneficial, this law effectively shields moving companies from having to keep their promises to consumers; consumers cannot sue for gross negligence or even fraud. This means that if a moving company holds a person’s goods hostage, uses deception in its business practices, or even drives someone’s stuff off a cliff out of sheer spite, the consumer can only make claims for the value of the goods and nothing more. In essence, consumers must uphold their end of the bargain, but the same cannot be said for the moving company.
The problem with such a law is clear. In a normal market setting, businesses would be reluctant to defraud their customers, because they may face legal consequences, as well as lose repeat business. But under this law, moving companies can engage in the most egregious business dealings without having to worry about serious legal fallout.
The first steps to solving this problem seem straightforward. Local authorities should have the power to intervene and assist consumers instead of standing by and leaving them to seek more complicated federal remedies. Next, the Carmack Amendment should be amended or repealed. Hiding behind this law, moving companies can promise customers the moon, fail to deliver on their promises, and continue on without any real threat of repercussion.
Hall is an Independent Institute Research Fellow (Independent.org) and an incoming assistant professor of Economics at the University of Tampa.