David Feldgus just wanted his car moved. He says he searched the Internet for a low price, then settled on a company that said it would pick up his car in 10 days. A month later, he was still waiting. Pay $200 more for “priority shipping,” he was told. Feldgus balked at what he saw as “extortion.” But extra fees and long delays aren’t unusual in the essentially unregulated world of car moving, and industry insiders say the Internet is just making things worse.
THE CAR MOVING COMPANY Feldgus signed up with, Southerland Auto Transport, maintains it did nothing wrong.
Owner Bill Southerland said he tells all customers up front that there are “no guarantees” about the date their cars will be shipped. If they get antsy about the delivery date, they can upgrade to “priority shipping” for $200 more. And if customers decide to back out of their contracts because they aren’t happy with delivery timing, he reserves the right to keep a $200 deposit.
“The booking fees are nonrefundable,” he said. “We don’t work for free.”
Feldgus eventually decided to swallow the loss of his deposit and shipped the car with another firm. Then he filed a complaint with the Better Business Bureau against Anderson, Calif.-based Southerland, one of almost 150 the agency has on file about the car transport company.
Bill Southerland said moving the cars around the country is a “logistical nightmare,” and that consumers are just taking their frustration with the delays out on him.
The local district attorney’s office is investigating Southerland’s business practices, according to Matt Stegman, deputy district attorney in Shasta County, Calif.
NATIONAL PROBLEM The problem is nationwide, said Stegman.
His office first heard about it a year ago, when a local resident who is also an FBI agent tried to move his car when he was transferred to Virginia.
“He called and said my car’s been sitting there for 3 months,” Stegman said.
When Stegman looked into the Ventura County-based American Auto Shipping, he found it was already being investigated by local officials.
More than 250 complaints have been filed against American Auto Shipping, said Mike Fino, the Ventura deputy district attorney handling the case. Several months ago, he obtained a search warrant for the company and seized a set of the firm’s business records.
“There were complaints the car wasn’t picked up, or wasn’t delivered. Consumers got excuses, like the car is stuck in Oklahoma,” he said. And sometimes, even though consumers had already paid in full, truck drivers demanded more cash when they arrived with the car. “They’d say, ‘You owe me this much for transportation ... either you pay me now or you don’t get the car.’ ”
American Auto Shipping has since gone out of business; phone numbers listed for the firm have been disconnected.
Part of the problem is the nature of the industry. Consumers who book passage for their cars rarely talk directly to the trucking companies. Instead, they talk to brokers who act as middleman between the consumers and the trucking firms. So car moving brokers often guess what trucking firms will charge them, add a thin profit margin, then quote prices to consumers. Moving brokers thus have every incentive to “lock up” customers with low prices, then add fees later, said Kenda Deere, who runs Coast to Coast Auto Transport.
‘OFTEN PERFECTLY LEGAL’
Critics say the problems began in the mid-1990s, when Congress folded the Interstate Commerce Commission, and gave responsibility for industry regulation to the U.S. Department of Transportation, which gave it to the DOT’s Federal Highway Administration and its Federal Motor Carrier Safety Administration. But that agency spends nearly all its energy on safety issues, leaving the car moving business essentially unregulated.
An April 2002 e-mail from a Transportation Department official acknowledged as much:
“When Congress abolished the ICC, they eliminated the people who enforced those rules and gave you the right to sue to enforce them,” the DOT’s James Gregg wrote to Jeff Allen, owner of Allen Auto Transport. Gregg is Florida’s state director for the Department of Transportation’s Federal Motor Carrier Safety Administration. “We do not have any resources and have been specifically told by Congress not to divert resources from safety enforcement for these issues.”
Gregg, who confirmed the e-mail was authentic, said the ICC once had 600 employees who monitored the trucking industry. When it was closed, all but 60 positions were eliminated, and those employees now deal strictly with licensing issues. Most of the time, that means civil suits are the only recourse for consumers who run into trouble.
“The complaints we get are certainly egregious, but in terms of the contract they signed, they are often perfectly legal,” Gregg said. “The contract says if they can’t make the delivery date, they are not liable. If the delays are extensive enough, they can sue for fraud, but my understanding is the bar is pretty high.”
Some companies have faced government action.
In 2001, the Federal Trade Commission accused AAAA Auto Car Brokers Inc. and Anywhere Anytime Auto Brokers Inc. of misrepresenting “their ability to have consumers’ cars picked up or delivered on precise times and dates. ... These consumers also lost their deposits of $200 or $250.” Eventually, Katherine Ann Carter, who owned both firms, agreed to pay $45,000 to consumers as part of a settlement.
And in April of this year, Shasta County charged Wendy Lynn Terrill and Michael Lloyd Terrill with grand theft and conspiracy to commit fraud for their role in operating Automoving.net.
“If a company says we’ll move your car in 1 to 11 days and give us a $200 deposit and they know there are lots of people who don’t get cars moved in that time frame or the time frame is just false, they’ve committed grand theft or petty theft, depending on the amount,” Stegman said. “If you mislead someone for the purpose of getting someone to turn money over to you, it’s theft.”
Such limited law enforcement actions haven’t slowed such “bait and switch” practices, said industry workers.
And the advent of the Internet made things much worse, Allen said. At least in the past, unscrupulous car movers needed a physical office. Now, car movers can set up shop in a day, start lowball bidding consumers right away, and disappear just as quickly. Since consumers often tend to go with the lowest price, they are easily lured by less-than-honest movers.
“It’s horrible. It’s just so easy to throw up a Web site and take someone’s money,” Stegman said.
“The Internet has completely ruined our business,” said Allen. “All you need is a phone and a desk.”
Hundreds of car movers now hawk their services on the Internet, and even in spam e-mail, making it difficult for consumers to tell the good from the bad.
Sometimes, it’s even hard to tell with which company you’re dealing. One car moving spam advertisement viewed by MSNBC.com urged consumers to call an 800 number to book transportation. At least seven different firms, with different Web sites, used that same phone number. The operator who answered the phone acknowledged that her company used a variety of names, but claimed it was standard industry practice to do so.
“That’s not weird. A lot of companies do that,” she said.
Deceit is so rampant, said Deere, that consumers who search online for a car mover have a “fifty-fifty chance” of running into trouble. In fact, when consumers solicit bids from the first 10 auto movers they find online, “only four or five will be honest quotes out of 10,” she claimed.
The rest of the offers will be “low-ball quotes” designed to lure consumers into signing contracts. But later, movers will demand additional payments, she said.
Deere said she has a list of more than 100 car mover Web sites that she claims have misled consumers.
WHAT CONSUMERS CAN DO
If any of this sounds familiar, it is: Congressional hearings in 1998 and again in 2001 shone a harsh light on the household goods moving industry, revealing it was dogged by lowball bid tactics, tack-on fees, even “hostage” freight situations, when movers keep consumers’ goods in a truck until additional fees are paid.
Consumer advocate Tim Walker, who runs MovingScam.com, said that more than 200 companies which regularly engage in such tactics are listed on his Web site. The car moving business has similar issues, he said.
“It’s almost exactly the same type of situation as home moving,” Walker said. “Once they have you, they jack the price up ... Then say, you’re not gonna see (your possessions) until you give us more money.”
Rep. Tom Petri, R-Wis., has introduced legislation that criminalizes such behavior among household goods movers, which would give state attorneys generals the ability to prosecute shady movers. But aides said the law as currently written would not necessarily extend to car movers.
So consumers are on their own to avoid extra fees or long delays.
Walker offers a few common-sense suggestions:
When shopping around, don’t assume the lowest price is the best deal.
“Talk to friends and ask them if they had their car moved. Ask the company for references, and call the references and make sure they’re legit,” he said. “And don’t pay in advance. Ten percent down is fine. You wouldn’t pay any other industry up front for service? Why would you pay movers?”