House lawmakers introduce bill to combat freight fraud

May 22, 2024

in Logestics

Reading Time: 3 mins read

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.”

Click for more FreightWaves articles by John Gallagher.

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