2011-20665. Regulatory Guidance Concerning Household Goods Carriers Requiring Shippers To Sign Blank or Incomplete Documents

AGENCY:

Federal Motor Carrier Safety Administration, DOT.

ACTION:

Notice of Regulatory Guidance.

SUMMARY:

The Federal Motor Carrier Safety Administration (FMCSA) issues regulatory guidance to clarify the appropriate and intended use of blank or incomplete documents under 49 CFR 375.501(d). Carriers may require shippers to sign incomplete, but not blank, documents so long as the omitted information is limited to: (1) The actual weight of the shipment, in the case of non-binding estimates; and (2) unforeseen charges incurred in transit. This guidance also clarifies that carriers may not require shippers to sign “Revised Written Estimates,” “Rescissions of Old Estimate,” or other documents authorizing the carrier to rescind an estimate unless the shipper and carrier mutually agree to amend the estimate, and the shipper signs a new estimate before the carrier loads the shipment.

DATES:

Effective date: This regulatory guidance is effective on August 15, 2011.

FOR FURTHER INFORMATION CONTACT:

Kenneth E. Rodgers, Division Chief, Commercial Enforcement, 1200 New Jersey Avenue, SE., Washington, DC 20590, telephone: [phone].

SUPPLEMENTARY INFORMATION:

Legal Basis

The Interstate Commerce Commission Termination Act of 1995 (ICCTA)

(Pub. L. 104-88, 109 Stat. 803) provides that “the Secretary may issue regulations, including regulations protecting individual shippers, in order to carry out this part with respect to the transportation of household goods by motor carriers subject to jurisdiction under subchapter I of chapter 135. The regulations and paperwork required of motor carriers providing transportation of household goods shall be minimized to the maximum extent feasible consistent with the protection of individual shippers.” (49 U.S.C. 14104(a)(1)). In the Motor Carrier Safety Improvement Act of 1999 (Pub. L. 106-159, December 9, 1999, 113 Stat. 1750), which established FMCSA as a separate agency within the U.S. Department of Transportation (DOT), Congress authorized the Agency to regulate motor carriers transporting household goods for individual shippers.

Background

This document provides regulatory guidance on the Agency's interpretation of 49 CFR 375.501(d)(1) and (2). Those sections, which were adopted as a part of a technical amendment in 2004 (69 FR 10570 (Mar. 5, 2004)), provide:

(d)(1) You may provide the individual shipper with blank or incomplete estimates, orders for service, bills of lading, or any other blank or incomplete documents pertaining to the move.

(2) You may require the individual shipper to sign an incomplete document at origin provided it contains all relevant shipping information except the actual shipment weight and any other information necessary to determine the final charges for all services performed.

The original version of § 375.501(d), published as an interim final rule, prohibited carriers from requiring individual shippers to sign blank or incomplete estimates, orders for service, bills of lading, or any other blank or incomplete documents pertaining to the move. (68 FR 35064 (June 11, 2003)). In response to industry comments, the Agency amended § 375.501(d) to permit carriers to require shippers to sign incomplete documents so long as the documents contain all of the relevant shipping information. In doing so, the Agency recognized that certain information, such as actual final weight and other transit charges, may not be available until after the shipment is in transit.

Basis for This Notice

The Agency has received numerous consumer complaints concerning household goods carriers and brokers that are requiring shippers to sign blank or incomplete documents and then adding unauthorized charges later. Specifically, the complaints identify carriers that required shippers to sign a blank or incomplete form entitled “Revised Written Estimate” or “Rescission of Old Estimate.” This form, when fully executed and completed, authorizes the carrier to rescind the original estimate and give a new estimate under the guise of “changed circumstances.” “Changed circumstances” generally occur when a shipper requests additional services or provides additional goods for shipment. Although the form, on its face, may be used for legitimate changes requested by shippers, in many cases, it is being used to defraud shippers who have not requested additional services or changes to their moves.

Verified consumer complaints show that some carriers require shippers to execute this incomplete or blank document before loading shipments and then use the form to rescind the original estimates. The carrier then improperly converts non-binding estimates to binding estimates for significantly increased amounts or alters the pre-existing binding estimates once the shipment is in transit. The carrier makes these changes without the shippers' knowledge after the shipment is in transit. The practical effect of this practice is to force shippers unknowingly to waive their rights to the consumer protection regulations as set forth at 49 CFR 375.403 and 375.405.

Carriers using these practices interpret § 375.501(d)(2) to authorize this conduct. Such carriers also cite § 375.501(d)(2) to support using “Revised Written Estimate”/“Rescission of Old Estimate” forms, which were specifically designed in response to the 2004 technical amendments. The FMCSA rejects this interpretation and believes that such conduct is unlawful. The 2004 amendments were intended to address the fact that certain information related to the shipment could not be determined until after the shipment was in transit. The FMCSA did not amend § 375.501(d) to allow carriers to supersede the stringent consumer protections provided in part 375. In most cases brought to the Agency's attention, carriers have used blank or incomplete documents to increase estimates after loading without the consent or knowledge of shippers.

The FMCSA rejects these carriers' interpretation of 49 CFR 375.501(d) and believes that their conduct violates existing regulations in part 375. The FMCSA is issuing this regulatory guidance to eliminate any ambiguity or confusion concerning the scope of these regulatory provisions and to protect consumers from future harm.

Regulatory Guidance

Part 375—Transportation of Household Goods in Interstate Commerce; Consumer Protection Regulations

Sections interpreted

Section 375.501(d)(1) and (2) Blank or incomplete documents:

Question 1: May household goods motor carriers require shippers to sign blank documents before loading a shipment?

Guidance: No, movers may not require shippers to sign blank documents before loading a shipment. Movers may provide blank documents to shippers for information purposes only.

Question 2: May household goods movers require shippers to sign incomplete documents before loading the shipment?

Guidance: A mover may require a shipper to sign an incomplete, but not blank, document before loading at the shipment's origin so long as the document contains all of the relevant shipment information. Movers may only omit information that cannot be determined before loading, such as actual shipment weight in the case of shipments moved under non-binding estimates or unforeseen charges incurred in transit.

Question 3: May household goods movers require shippers to sign “Revised Written Estimates,” “Rescissions of Old Estimate” or other documents authorizing the mover to rescind the estimate as a condition of loading a shipment?

Guidance: Movers may not require shippers to sign “Revised Written Estimates,” “Rescissions of Old Estimate” or other documents authorizing the mover to rescind the estimate as a condition of loading the shipment unless the shipper and carrier mutually agree to amend the estimate and the shipper signs a new estimate before the carrier loads the shipment. In accordance with 49 CFR 375.501(f), 375.401(h) and 375.403(a)(6), both the shipper and the mover must mutually agree to any amendment to a shipping order before loading the shipment. Section 375.501(d) does not alter this requirement.

Issued on: August 8, 2011.

Anne S. Ferro,

Administrator.