December 1997

Miles and Miles of Texas:
Moving Across the Lonestar State

This article was written by the Consumers Union Southwest Regional Office.

Recommendations

After deregulation of the trucking industry, the Legislature required TXDoT to institute certain consumer protections, but they only applied to movers operating vehicles with a gross weight greater than 26,000 pounds. This meant that most local moving companies--which often used vehicles weighing less than 26,000 pounds--did not register with the state, were not required to carry cargo liability insurance, and were not subject to the TXDoT's consumer protection guidelines.

In 1997, the state Legislature passed a new law which subjected all household goods carriers to the consumer protection guidelines and established a minimum amount of required liability insurance for the smaller local carriers. For the consumer, this change should mean that all household goods movers must register with TXDoT, follow the department's rules and regulations for consumer protection, and file an annual report with the department.

The annual report includes most of the statistics cited in this report, including the number of their shipments where the cost exceeded the original estimate by more than 10 percent and the number of shipments where customers filed a claim for loss or damage. This report also requires the carrier to detail the number of claims referred to mediation or where legal action was taken and the average time required for a claim to be resolved.

As of the writing of this report, the household goods movers must comply with emergency rules and regulations. Final rules will be published after time is allowed for consumers and industry representatives to make comments.

The existing rules should be strengthened and applied to all movers who transport household goods in Texas. After our analysis of performance reports and review of complaints filed at TXDoT we recommend to following significant improvements:

• Require every moving company to offer binding or binding-not-to-exceed estimates.
  Currently, many moving companies do not offer consumer the option of a binding estimates, even if the consumer asks for it.
  
• Cap the charges for a non-binding estimate at 110 percent of the estimate when no additional services have been provided.
  Since the purpose of having a carrier representative come to your home is to give an estimate from which you will make an informed decision regarding a carrier, we believe that the final charges should be no more than 110 percent of that estimate.
  
• Prepare an inventory on all shipments at no cost to the consumer.
  The regulations state that an inventory must be prepared upon shipper request and that the carrier may charge for the inventory. If an inventory is prepared on all shipments at no charge to the customer, both parties to the contract will clearly agree to the items and their condition before loading. It provides a basis for resolving disputes over lost or damaged items.
  
• Clearly identify the bill of lading as a contract with a statement that the bill of lading governs the rights and responsibilities of the carrier and shipper in the transaction.
  
• Require estimates to clearly state which company will move the consumer.
  Estimate forms should be on the letterhead of the actual mover only.
  
• Direct movers to give consumers a copy of their most recent annual performance report when they show up to do an estimate.
  The rules currently require that the carrier notify the consumer that a copy of their annual report is on file at TXDoT. We recommend that this report (which is only one page long, simple, and contains no financial information) by given to the consumer along with the required TXDoT information regarding consumer protection. This will allow the consumer to examine important information regarding that carrier's number of shipments which exceeded 110 percent of the non-binding estimate and the number of claims filed by consumers after a move.
  
• Insurance coverage purchased through moving companies should be regulated to ensure consumers are not charged excessive rates.
  TXDoT rules allow moving companies to sell or procure any kind of insurance under any kind of policy for loss or damage in excess of the companies' liability. However, the rates and benefits of these policies are not evaluated by the TDI or TXDoT to ensure consumers are treated fairly. Consumers Union again recommends that TXDoT enter into a memorandum of understanding with TDI to develop standard policy language for insurance policies sold to shippers and to monitor loss-ratios of these policies.
  
• Shorten the complaint process.
  Many consumers we spoke with or whose complaint file we examined expressed frustration with how long it takes to obtain a settlement for their claim. Current regulations allow movers to take up to 180 days to try and resolve complaints. While many report an average resolution time of 30-90 days, these averages mask large differences for individual consumers. No consumer should have to wait six months before they can move to the next stage in the complaint resolution process. TXDoT staff should assist consumers when they call, no matter where they are in the complain process.
  
• Require that the household goods moving companies utilize mediation panels that are independent of the moving industry.
  We reviewed a judgment from one mediation panel comprised entirely of members of the Southwest Movers Association. Representatives from the trade association state that members of the association no longer sit on mediation panels. However, the Southwest Movers Association refers all request for mediation to on law firm which handles the mediation and renders a decision.

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