FMCSA’s Broker Fraud Analysis Issues: Stunning New Update Says “Too Little Data”

Lack of Data and Jurisdiction Issues for FMCSA’s Broker Fraud Analysis

The Federal Motor Carrier Safety Administration (FMCSA) recently told Congress about its problems dealing with broker fraud, especially double-brokering. They said the main issues are a lack of data and problems with jurisdiction. In their “Unlawful Brokerage Activities” report, the FMCSA is trying to find out if there is a link between unsafe trucking companies and illegal brokerage, but they don’t have enough data to be sure.

Many people have complained about double-brokering fraud, but the FMCSA doesn’t have enough information to prove it’s a safety issue. The report did say that trucking companies with poor safety records often don’t have a real physical office. But since brokers don’t actually move goods themselves, it’s hard to see a direct safety risk from not being registered as a broker.

Issues with Punishing Illegal Brokers

The FMCSA has a hard time punishing illegal brokers. A judge ruled in 2019 that the FMCSA can’t give civil penalties to unauthorized brokers. Instead, they must ask the U.S. Department of Justice (DOJ) to do it. This makes it harder and slower for the FMCSA to enforce rules against illegal brokers.

To fix this, the FMCSA wants Congress to change the law so they can give penalties directly. This would make the process faster and more efficient.

Efforts to Raise Awareness and Enforce Rules

Even with these challenges, the FMCSA is working to make more people aware of illegal brokerage, especially in general freight. They have also made efforts to deal with broker fraud in the household goods-moving sector. In 2023, the FMCSA started “Operation Protect Your Move,” which targets scams by movers and brokers. This led to many investigations and actions, including taking away the operating authority of some household goods movers and reviewing several brokers.

Working with Other Agencies

The FMCSA works with many federal and state agencies to fight illegal brokerage and moving fraud. They have worked with the DOT’s Office of the Inspector General (OIG), the Federal Bureau of Investigation (FBI), and state authorities. These collaborations have led to charges and convictions in many fraud cases.

The FMCSA also has a Household Goods (HHG) State Enforcement Partnership Program. This program allows states to enforce federal consumer protection rules. It has led to significant actions against non-compliant brokers and movers.

Need for New Legal Powers

The FMCSA says it needs new or clearer legal powers to fight illegal brokerage effectively. They have asked Congress to change the law so they can give penalties directly. This change would help them deal with both unauthorized brokerage and household goods moving fraud, which has seen a big increase in complaints since 2017.

Future Plans

The FMCSA plans to keep working hard to identify and take action against fraudulent brokers and movers. They are also thinking about more research into the safety effects of illegal brokerage as required by a 2022 Congress bill.

In short, the FMCSA’s broker fraud analysis update to Congress shows their ongoing struggle with double-brokering fraud due to a lack of data and jurisdiction issues. They are asking for changes in the law to improve their enforcement abilities and are committed to raising awareness and taking action against illegal brokerage activities.