The internet can make the home-buying and -selling process a lot easier, but it can also add complications and introduce risk. One of the most frequently reported scams related to real estate? Illegitimate moving companies looking to swindle real estate clients out of their furniture, money, or even both.
In 2017, the Better Business Bureau (BBB) received over 6,000 complaints against moving companies. May is National Moving Month; take this opportunity to engage with your clients about the possibilities of moving-based fraud and the steps you both can take to protect them.
Partner With Reliable Moving Vendors
As an industry professional, consumers look to you for guidance and resources. Just as you have mortgage lenders and attorneys you commonly work with and recommend, have at least two vetted moving companies on your vendor list. This is one of the best ways to protect your clients, as these companies tend to have a solid track record with your business, along with great reviews.
Educate Your Clients
If your clients decide to hire a company outside of your recommended vendor list, it is your duty to educate them on how to proceed with caution and be able to spot an illegitimate company. What do they stand to lose? Many scammers posing as moving companies hike up prices, steal contents, and, in many cases, hold goods hostage until they receive additional payment.
Types of Scams
There are several ways these companies deceive consumers:
- Deposit Theft – The simplest and most common scam, the company requests a deposit after providing clients with a quote, and then disappears with the money.
- Weight Fees – In this second scenario, fraudsters add on fees, citing a heavier load than anticipated on the quote provided.
- Hostage Situation – After receiving payment and picking up the contents, these fraudsters move the goods to a different location and threaten to withhold them until they receive additional payment from the consumer.
- Disappearance – The most severe of all cases, fraudsters pose as a moving company and never arrive at the new home, stealing your clients’ belongings and money.
How to Spot Them
The best weapon against fraud is knowledge. By knowing what to look for, consumers can acknowledge they are being taken advantage of. Here are the biggest signs your client may be in trouble:
- Movers refuse to make a house call and ask for a deposit over the phone.
- The estimate provided is a lot lower than any others they received.
- The company requests signatures on blank or partially filled documents/contracts.
- The moving company is not listed on the BBB website, or is not part of the American Moving and Storage Association (AMSA).
There are steps consumers can take when searching for a moving company, the most important of which is to check licensing to ensure the company can legally operate within the state, and any other states if your client is making a long distance move.
Additionally, by purchasing insurance, consumers can protect themselves against lost or damaged items. To ensure fair pricing and practices, obtaining three estimates provides consumers with the ability to compare costs and more easily spot a fraudulent situation.
Agents should warn their clients that these scams are more common this time of year, when the majority of consumers are moving. According to the 2017 Trends in Moving report by My Moving Review, 63 percent of all residential moves were made between May and October, and, during this time, Friday was the busiest day for moving, accounting for 20 percent of all moves.
Agents should remind clients that any valuables, such as money, jewelry and important documents, should be transported by either a shipping service with tracking capabilities or by the homeowners themselves.
To report fraudulent activity related to moving, consumers can call the BBB at 903-581-5704 or can use the BBB’s ScamTracker.