WASHINGTON — A bipartisan bill to crack down on scam freight brokers and trucking companies is receiving rare, near-unanimous support from all sectors of the industry.
The Household Goods Shipping Consumer Protection Act, introduced by Democratic Congresswoman Eleanor Holmes Norton, Washington’s nonvoting delegate in the House, and Rep. Mike Ezell, R-Miss., targets fraudulent actors in the household goods sector.
However, new, stricter registration requirements and enforcement provisions in the bill would apply to all freight carriers and brokers that register with the Federal Motor Carrier Safety Administration.
“We see in all this freight fraud that these fake brokers — and carriers as well — don’t actually have a physical address to be able to track them down,” Lewie Pugh, executive vice president of the Owner-Operator Independent Drivers Association, told FreightWaves. “That’s why this legislation is so important for us.”
Federal regulations currently require that in order to qualify and register as a freight broker with FMCSA, brokers must have “sufficient experience” and be “fit, willing and able.”
The legislation would require that the brokers also designate a principal place of business and disclose “any relationship involving common ownership, common management, common control, or common familial relationship between such person and any other motor carrier, freight forwarder, or broker, or any other applicant for motor carrier, freight forwarder, or broker registration, if the relationship occurred in the three-year period preceding the date of the filing of the application for registration,” according to a draft version of the bill.
Federal officials would also have the power to “withhold, suspend, amend, or revoke” any broker or carrier registration that fails to designate a valid principal place of business.
In addition to OOIDA, the bill is endorsed by the American Trucking Associations’ Moving & Storage Conference, Transportation Intermediaries Association (TIA), the National Association of Small Trucking Companies (NASTC), the Commercial Vehicle Safety Alliance, the Institute for Safer Trucking, and Road Safe America.
“Combating fraud through effective legislation is imperative for the protection of brokers, motor carriers, shippers, consumers, and the integrity of the economic system,” commented TIA President and CEO Anne Reinke. “By implementing strong anti-fraud laws, governments can ensure a more stable and predictable economic environment, which is essential for sustainable growth and investment.”
NASTC President David Owen noted that the bill takes steps to hold fraudulent brokers accountable.
“This bill requires a tangible place of business to register, which should help disrupt the many frauds who exploit the ability to run and constantly shift their brokering fraud schemes solely online,” Owen said in a statement. “NASTC looks forward to working with these lawmakers to move this bill forward.”
Robert Docis
If it’s no-partisan it will focus on chasing down bad actors in America, in other words Americans. Since a huge amount of this is being done from oversees I expect it’s just another ploy for the government to investigate and manipulate companies that are operating in America. One little thing is all they look for to get into an entire investigation to find something else that can shut you down. Until this administration is removed from power I don’t expect any of these proposals to actually be in favor of the American small business or its workforce.
Antonio Campbell
What’s the CATCH?
ANDY
Brokers should have to have the bond of $1000000, and all accessorial need to able to able collect off the bond. Broker commit fruad giving timeline to carrier to get paperwork turned in and collect. This is violation of the 18 month rule and needs FMCSA to enforce there rules.
Todd
Echo what everyone else has said thus far.
While a step in the right direction, my prior experience working to prevent fraud is that the “bad guys” will always be one step or two ahead. And with rampant fraud, you are lucky if they even go after and prosecute the big fish. With so many bad actors outside the US, this becomes a challenge.
For what’s to come, just look at what has happened in consumer fraud and how long financial institutions, credit card companies, etc. have been working on stopping it. And you can bet there are already laws on the books that make this type of fraud illegal.
Duke da god
It’s crazy how all this fraud is being acted out overseas in third world countries like Armenia. We’re going on almost two years of heavy scammers and cargo theft and no one is still doing anything about it.
Dat 360 has turned into a platform to commit and act out fraud. How are all these bad actors from third world countries who’ve never step foot in this country still committing fraud
James
I’m all for action to help remedy the enormous amount of fraud that is happening in the industry right now. I would like to see the actual language of the bill because the devil is always in the details and often regulations and laws are passed for the appearance of “doing something” about a problem without having any real effect. If the governing agencies aren’t given the manpower to actively pursue the bad actors, would anything actually change? Would the declared common ownership open up uninvolved entities to the litigation bonanza that personal injury attorneys have going on if a broker and a carrier have common ownership even though they are run correctly as separate businesses? Would a small carrier being run out of a residence be considered a legitimate address? There are several reporting services that flag multiple entities possible because of they have a common vendor that handles IFTA reporting for them so how would that be reported?
Teri B
I agree Nancy. Most of these “bad actors” work from other countries as well. They have connections in the states that set them up and then work from abroad.
Anything in the right direction is better than nothing. Lets keep moving forward and do our diligence to weed through these folks.
Nancy
This is all well and good, but it needs to be enforced! There is already a law that states, no virtual address’s etc and it does not get enforced.
I have a had carriers give me all kinds of bogus addresses.
If this is going to be enforced, great!! If it is not, then it is as useless as the other laws.