Law Offices of Michael Garcia
Transportation law • Tariff Publishing • Regulatory Compliance • Consumer Protection
Legal compliance for interstate moving companies:
How to prevent "low-balling" and abuse of revised written estimates.
Low-balling an estimate is a serious crime. Interstate brokers and moving companies have a responsibility to protect their customers against this type of criminal fraud. As part of this responsibility management should set company-wide standards to ensure the accuracy of estimates, and monitor estimators to safeguard against "low-balling."
The revised written estimate is a tool authorized by FMCSA regulation to be used in situations where the consumer shipper has made last minute additions to the property being transported or if they order last minute services - such as packing or storage. The revised written estimate cancels the original estimate and creates a new higher estimate accounting for the additional property to be transported or services ordered by the consumer shipper.
Under FMCSA regulations an estimate, whether binding or non-binding, may be increased or decreased in price any time prior to the work beginning. In accordance with 49 CFR § 375.403(a)(6)(ii) and/or 49 CFR § 375.405(b)(7)(ii): If prior to or on the day of the scheduled move the consumer shipper increases the items to be moved, or orders extra services, or makes a change to the initial estimate the moving company and consumer shipper may agree to sign a revised written estimate increasing the price of the move to account for the additional property or services. A revised written estimate must be authorized and signed by the consumer shipper PRIOR TO LOADING OR OTHERWISE BEGINNING THE JOB.
A revised written estimate which has been reviewed, authorized, and signed by the consumer shipper prior to the start of moving services will serve as the only active estimate for which charges will be calculated. In effect, the revised written estimate cancels the original estimate and acts as the new governing estimate.
A revised written estimate is an important and legitimate tool to be used when the consumer shipper makes an unplanned last minute addition to the services ordered. However, some dishonest brokers or motor carriers have abused this process by purposefully "low-balling" the original estimate in anticipation of using a revised written estimate to increase the charges for services at the last minute.
Note: In addition to the above general requirements, an interstate moving company must continue to follow all provisions of federal law governing interstate moves. Federal laws regulating moving companies are designed to help protect consumers and create an even playing field for moving companies. By following the law, moving companies can avoid government fines, lawsuits, and provide better service to their customers.
"Understand the law, enforce your rights, and protect your property."
Michael Garcia, Attorney at Law
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Law Offices of Michael Garcia
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WARNING: Low-balling estimates is a crime. Companies must take steps to safeguard against law ball estimates. There are many situations where the legitimate use of a revised written estimate is necessary. However, company management should have safeguards in place to prevent "low-balling" and abuse of revised written estimates. A simple step management can take is to calculate the percentage of total jobs where a revised written estimate was used to increase the estimate on the day of the move. For example, if 90% of a particular estimator's booked moves increased on the day of the move - then there is a problem with the quality of original estimates being issued. If original estimates are honest and accurate then the percentage of estimate increases on the day of the move should be relatively low.
When confronted with the fraudulent use of a revised written estimate, consumer shippers may have little choice but to agree to the inflated price because they are forced into a position where they cannot reasonably find another moving company at the last minute. The consumer would have presumably made travel arrangements, or gave notice to vacate their home, or scheduled the start of a new job, etc. -- in good faith reliance on the accuracy of the original estimate. An interstate broker or moving company "low-balling" and purposefully abusing a revised written estimate in this manner is guilty of criminal fraud and extortion.
Interstate brokers and moving companies have a responsibility to protect their customers against this type of fraud. As part of this responsibility management should set company-wide standards to ensure the accuracy of estimates, and monitor estimators to safeguard against "low-balling." To help safeguard against "low-balling" and revised written estimate abuse interstate brokers and movers could do the following:
Safeguard against "low-balling" and abuse of a revised written estimate by:
1. Provide consumer shippers with honest estimates based on a detailed and an accurate item list and services to be performed. It is the responsibility of the estimator to provide an accurate estimate.
2. Prior to the moving day inform the consumer shipper of the possibility and rates for all additional charges and optional services.
3. Prior to the moving day make certain the consumer shipper understands that the price is not guaranteed if additional items are moved or additional services ordered.
4. Verify the accuracy of the original estimate by contacting the consumer shipper several days prior to the move to confirm the services ordered and find out if any changes have been made to the number of items to be moved or services requested and inform the consumer of any changes to the price.
5. Regularly monitor the percentage of total moves where the original estimate increased on the day of the move. If original estimates are honest and accurate then the percentage of estimate increases on the day of the move should be relatively low.
6. If there is a legitimate reason to revise an estimate, make certain to use a revised written estimate form that contains a warning to the consumer shipper not to sign blank documents.
7. Establish company-wide policy that prevents interline agent carriers to issue a revised written estimate without prior company authorization. By requiring company authorization, management can confirm with the customer that the need for a revised written estimate is legitimate, in compliance with the governing regulations, and that it was approved it in good faith prior to servicing beginning.
