Lump Sum Benefits & Protecting Your Employees from Rogue Movers

By Bobbi Maniglia Mar 17, 2020

Corporate relocation benefits can take many forms, including Lump Sum payments. But did you know that relocating employees provided with such a benefit are, for all practical purposes, in the same position as consumers looking for a mover? This can mean competition for moving dates and, equally important, the chance that they may fall prey to unscrupulous and non-certified moving companies, also known as Rogue Movers. This post offers tips on identifying and avoiding rogue moving companies.

“Lump sum” payments are a popular option for many firms when they relocate their employees. A lump sum payment is a predetermined amount of money given to a relocating employee by their company to cover all or some of the employee’s relocating costs. Often, lump sum payments are used to cover the household goods moving portion of an employee’s relocation. While lump sum benefits have their pros and cons, the effect is that relocating employees are turned into consumers who have to purchase services directly.

Do you want to learn more about how to create a winning lump sum program? Check out our blog post on the 5 Best Practices for a Successful Lump Sum Program.

This can open up the employee to new risks inherent in this process. For example, there has been a significant uptick in consumers falling prey to so-called, “rogue movers”^{^[1]}. Rogue movers typically entice consumers with low priced quotes, demand more money on the day of the move from vulnerable employees, hold goods hostage with a ransom demand, or simply fail to deliver the shipment at all. A recent example of a rogue mover horror story happened to Karen McConnel from Medina, Ohio who went more than three weeks without receiving her belongings and was ultimately forced to pay nearly 50% more than the initial low quote given to her by the rogue moving company. In another recent story, the entirety of a 73-year-old woman’s possessions was taken hostage and never recovered from a rogue moving company her son contacted online, believing it to be a legitimate moving company that won his business by offering the lowest quote.

How do You Spot a Rogue Mover?

According to the Federal Motor Carrier Safety Administration (FMCSA), which regulates interstate moving companies, consumers (and employees with a lump sum benefit) should look out for these “red flags” when selecting a mover^{^[2]}:

Does the mover provide an estimate over the phone or online without coming to view your goods in person? Often these estimates can sound too good to be true. That’s because they are.
Does the company demand a large cash deposit upfront?
If you are planning a move across state lines, did the company supply you with the “Your Rights and Responsibilities When You Move,” booklet?Federal law requires movers to give this booklet to all of their interstate move clients.
Does the moving company list a local address, registration, and insurance information on its website?
Did the moving company represent that all your belongings would be covered in full by their insurance?
When you call the company, is the phone is answered without using a specific company name?
Are the moving company’s offices or warehouses nonexistent or in questionable condition?
On moving day, did a rental truck arrive instead of a professional moving truck with the company’s name on it?

Nothing highlights the epidemic proportions of the rogue mover problem more than the story of a New Jersey state-wide sting operation that resulted in over twenty illegitimate moving companies being caught in that state alone. The Federal Motor Carrier Safety Administration (FMCSA) says it received more than 5,900 moving fraud complaints from consumers in 2018 alone. Of those, 39% were related to property loss, theft, or damage; 57% were due to complaints of overcharging, and 7% of these claims were hostage load situations where rogue movers held customers’ possessions for “ransom”^{^[3]}. The negative impact from rogue movers extends beyond just the employee who falls victim. When an employee’s household goods do not arrive on time or are held “hostage”, companies suffer too. northAmerican’s corporate relocation clients often relay stories of relocating employees on lump sum programs who have been victimized by rogue movers. While struggling to settle into their new location, these employees are suddenly consumed with finding their delayed (or altogether missing) shipment. As a result, the employees lose working hours and their productivity is diminished.

How Can You Help Protect Your Lump Sum Relocating Employees?

Encourage them to ask the right questions

According to Kevin Murphy, Vice President and General Manager of northAmerican® Van Lines, these are the key questions all employees should ask a potential moving company:

A. ESTIMATE PROCESS: Does the mover conduct an in-home survey or video survey of belongings before providing a guaranteed price? (Professional movers insist on an accurate method to best define the scope of work and surveys are required by law. Physical in-home surveying has traditionally been the best method, followed by newer video technology, to accurately determine the cost of a move.)

B. TRAINING: Has the moving crew been trained on the correct way to pack boxes and load a trailer to minimize damage? Do they follow industry-established guidelines to protect your home, as well as your prized possessions?

C. TECHNOLOGY: Does the mover use technology to accurately communicate special needs to the driver and electronically verify that every item loaded has been delivered? Does the company use electronic routing to maximize efficiency and reduce delivery time?

D. QUALITY STANDARDS: Does the mover employ quality standards for vehicles and personnel? Does it conduct background checks on drivers and crews? Are its storage facilities secure, clean and climate controlled? Does the mover use an unbiased third-party company to survey customers post-move and use that truthful data to improve performance? What is the mover’s Better Business Bureau (BBB) rating? Is the mover a “Pro Mover”, which means they have been certified by the American Moving & Storage Association (AMSA)?

2. Consider a Preferred Partner Program

Preferred Partner Programs are a great way to assist employees who are using a lump sum in making sound purchasing decisions for their move. These programs connect employees with their firm’s relocation service provider through an online portal or a toll-free number that connects them to the company’s relocation moving partner. When this is offered to employees, they no longer get just a self-service lump sum package but instead receive a “managed or limited support” lump sum. Preferred Partner Programs allow companies to work with their relocation service provider to develop a list of preferred moving companies and vendors for other moving-related services that their relocating employees may require. This ensures employees are given pre-approved vendors so that they only have professional, legitimate moving companies from which to choose.

3. Point them to Moving.org for certified movers

The American Moving and Storage Association's (AMSA) website (the foremost professional association for movers) offers a search feature where consumers can search and compare moving companies that are AMSA certified ProMovers. AMSA’s stringent standards for certification make selecting a moving company using this tool a safe bet that your employees will be hiring a truly professional moving company.

4. Use Google Maps street view

As mentioned previously, often times rogue movers show up with rented trucks instead of professional moving trucks that have their company name on them. One way to verify a potential moving company is to look up their address on Google Maps using street view. If it’s a professional moving company, there should be trucks on the property. If you don’t see any trucks, employees may want to steer clear.

A lump sum program can be a useful and convenient method to compensate your relocating employees, but as with all things, it has its disadvantages. Employees are more exposed to possible risks as general consumers in the marketplace seeking moving services, and the rise of rogue movers makes wise purchasing decisions more important than ever. Avoiding rogue movers benefits both employees and companies, as professional movers will get employees’ belongings to their new location honestly, on time, and in one piece, thereby avoiding lost human capital hours. Encourage your employees to ask the right questions of prospective moving companies, hire certified movers, research moving companies on Google maps, and watch for rogue mover red flags. These steps will help guide them to a safe and successful move. In addition, adding a Preferred Partner Program where employees can be directed toward pre-approved, vetted providers is a wonderful way to offer more support to your relocating employees utilizing a lump sum.

Learn more about how today’s companies are applying lump sum benefits for their relocating employees, the different types of lump sum programs, the benefits and challenges of a lump sum, and more by visiting our guides page and downloading our Ultimate Guide to Lump Sum Benefits.

^{^[1]} Hurtibise, Ron. “Moving Company Ripoffs Are on the Rise. Here's How to Avoid Getting Burned.” Sun, 11 Mar. 2019, www.sun-sentinel.com/business/fl-bz-how-to-protect-yourself-against-moving-company-schemes-20180814-story.html.

^{^[2]} “Spot the Red Flags.” Federal Motor Carrier Safety Administration, United States Department of Transportation, 2 Feb. 2015, www.fmcsa.dot.gov/protect-your-move/red-flags.

^{^[3]} “Are You Moving to Another State? Protect Yourself From Moving Fraud.” Federal Motor Carrier Safety Administration, United States Department of Transportation, 3 Feb. 2015, www.fmcsa.dot.gov/protect-your-move/moving-fraud.

Categories: Misc. Household Goods Moving Corporate