Consumer Fraud: How to Protect Your Business

Consumer Fraud: How to Protect Your Business

It is well-known in the moving industry just how tight the federal and state regulations are placed in terms of business. Both for the protection of the van lines themselves, as well as for the trusting customers whom are served. Yet even still van line agencies find themselves being the direct target for lawsuits based under state consumer fraud statutes (of which most are aimed for other business industries). This is an important read for all involved in the moving industry; as we will be discussing several federal laws and regulations that may just prevent and protect your moving company from a consumer fraud lawsuit.

 Carmack Amendment: The Carmack Amendment is based upon a mover’s liability for loss, damage and delay’s of freight for any “actual loss or injury to the property”, of which are subject to the released or declared value of the good(s). Therefore, any shipper who attempts to file a consumer fraud lawsuit would in turn look to evade a moving company’s liability limitations, based on seeking to be awarded full-valuation of their goods, as well as punitive damages.

FAAAA Statute: The Federal Aviation Administration Authorization Act (FAAAA) was created by Congress to van lines in 1994, and eventually led to become a ICCTA Statute. The Statute grants movers federal pre-emption protection when it is awarded to air carriers. Additionally, it prohibits states from enforcing any additional laws, regulations, or any other provisions of which are related to a van liners pricing, routing or services.

Removal to Federal Court: In order to ensure a mover’s rights have rightful success in terms of being sued in a state court of law, the mover must remove any eligible suits that may head to a federal court. The defendant must remove the case within 30 days after being served. If they fail, the removal right is in turn lost and the defendant risks federal defense by disregarding a state court.

While it may be said that there are exceptions to every case, it is always best to do adequate research if you find yourself being faced with a consumer fraud lawsuit, in order to find the best solution and resolution for the success and future of your company.