Bipartisan bill introduced to combat freight fraud

A bipartisan bill endorsed by the Owner-Operator Independent Drivers Association aims to give the Federal Motor Carrier Safety Administration the tools it needs to combat fraud in the transportation industry.

Del. Eleanor Holmes Norton, D-D.C., and Rep. Mike Ezell, R-Miss., introduced the Household Goods Shipping Consumer Protection Act on Wednesday, May 22. The bill restores and codifies FMCSA’s authority to issue civil penalties against bad actors. The legislation also requires brokers, freight forwarders and carriers to provide a valid business address to FMCSA before acquiring operating authority.

“Household goods carriers, brokers and freight forwarders have registered with addresses where no legitimate operations take place, often designating their official address as a retail package store, vacant parking lot or business address unrelated to the registered entity,” Norton said. “FMCSA already requires motor carriers to designate a principal place of business and disclose common ownership. However, FMCSA may only take enforcement action after the entity is already registered and refuses to cooperate with investigations at the designated address.”

 Freight fraud is a huge problem in the trucking industry that is estimated to cost more than $800 million each year. Motor carriers are victimized through unpaid claims, unpaid loads, double brokering and load-phishing schemes.

“Freight fraud committed by criminals and scam artists has been devastating to many small-business truckers simply trying to make a living in a tough freight market,” OOIDA President Todd Spencer said. “OOIDA and the 150,000 small-business truckers we represent applaud Del. Holmes Norton and Rep. Ezell for their bipartisan leadership to provide FMCSA better tools to root out fraudulent actors, which are also harmful to consumers and highway safety. Because of the broad industry support for these commonsense reforms, we hope this bipartisan legislation will move through the Transportation and Infrastructure Committee without delay.”

In addition to OOIDA, the bill is endorsed by the Transportation Intermediaries Association, American Trucking Associations’ Moving and Storage Conference, National Association of Small Trucking Companies, Commercial Vehicle Safety Alliance, Institute for Safer Trucking and Road Safe America.

Protect Your Move

The bill also builds on FMCSA’s efforts to protect the public from scams involving household goods and brokers.

“FMCSA receives thousands of complaints every year from Americans who are the victims of fraud in the shipment of household goods by licensed entities,” Norton said. “This bill would provide FMCSA with explicit authority to assess civil penalties for violations of commercial regulations, and crucially, to withhold registration from applicants failing to provide verification details demonstrating they intend to operate legitimate businesses. Americans moving across state lines need to be able to have confidence in FMCSA-licensed companies transporting their physical belongings.”

Earlier this week, FMCSA announced the launch of 2024’s Operation Protect Your Move.

“Americans deserve a fair deal when they move into a new home – and we’re cracking down on moving companies that hold people’s possessions hostage,” Transportation Secretary Pete Buttigieg said in a news release. “This initiative will build on last year’s progress holding scammers accountable and is another example of the measures the Biden administration is taking to better protect consumers.” LL