New Jersey Division of Consumer Affairs Sues North Jersey Moving Companies for Predatory and Unconscionable Business Practices; Judge's Order Temporarily Shuts Down Defendants' Business Operation
NEWARK - Attorney General Jeffrey S. Chiesa and the New Jersey Division of Consumer Affairs have filed suit against two North Jersey moving companies accused of enticing consumers with low cost estimates, then holding the consumers' belongings hostage with the demand that they pay hundreds or thousands of dollars more than the originally agreed-upon prices.
On Tuesday, May 8, in response to a motion by the Division, New Jersey Superior Court Judge Margaret Mary McVeigh issued an order that temporarily shuts down the defendants' businesses. The order also requires Paterson-based Progressive Movers, Inc., Lodi-based ABC Packing Services, Inc., and their principals to return consumers' property without requiring any payment, voids any contracts the defendants had to perform future moves or storage, and prohibits them from selling or transferring any assets related to the lawsuit. The Judge will decide after a June 15 hearing whether the defendants' business activities should remain shut down pending the outcome of the State's lawsuit.
"The State has no tolerance for unscrupulous movers who hold consumers' property hostage as a form of extortion," Attorney General Jeffrey S. Chiesa said. "We are committed to cleaning up the marketplace to ensure a fair and safe environment for anyone seeking to hire a mover - and to protect the interests of the many movers who operate honestly and in compliance with the law."
The State has received complaints from a total of 87 consumers who say they were victims of the defendants' predatory bait-and-switch and other unconscionable business practices, and other violations of the New Jersey Public Movers Licensing Act, Public Movers Regulations, and Consumer Fraud Act. The Division currently has received more consumer complaints against the defendants than against any other moving company.
"The Division of Consumer Affairs received 199 complaints about moving companies last year - many of which were filed against these defendants," Eric T. Kanefsky, Acting Director of the Division of Consumer Affairs, said. "This action stands as a warning to predatory movers, and a reminder that consumers should learn as much as they can about a moving company, before trusting its workers with their valued property."
Defendant Progressive Movers, Inc., with a principal place of business in Paterson, advertised and performed moving and storage services under a variety of names including Modern One Versatile Expert Relocation Service, M.O.V.E.R.S. Inc., and Modern M.O.V.E.R.S. Inc, according to the State's ten-count civil complaint, filed in Passaic County. The company is owned and operated by Konstantin Egorov, who is also a defendant in the State's lawsuit.
Although consumers contracted with Progressive Movers, they later were presented with charges for packing services and materials allegedly demanded under the name of a company they had never heard of before the moves. That company, ABC Packing Services, Inc. of Lodi, was not licensed to perform moving services in New Jersey. ABC Packing and its owner and operator, Yevgeniy "Eugene" Piksun, are also defendants in the State's lawsuit.
The State alleges that Egorov and Piskun often used aliases when interacting with consumers. Egorov used the first names "Greg" or "Kyle"; and Piskun used the name "Sam." The two men also allegedly gave documents to consumers using the name State Wide Box Company, Inc., even though that company name is not registered to them, and the actual registered business by that name has no relation to Egorov or Piskun.
The State alleges the defendants conducted a scheme in which they placed profiles for Progressive and Modern One on websites at which consumers search for local movers. The profiles allegedly did not include phone numbers, and required consumers to request estimates via the internet.
The defendants typically provided artificially low estimates, such as offering $210 for a move. When consumers asked to confirm whether that really was the full price, the defendants assured them it was, according to the Complaint. They sent email confirmations saying the quoted price included services such as loading, delivery, reassembly, truck rental, gas, and insurance, and that the consumer would even receive five free boxes for packing.
The State alleges the defendants typically required consumers to sign blank, incomplete documents, such as bills of lading, or packing charges forms, without letting consumers read and understand the forms. After consumers signed the documents, the defendants allegedly filled in the blanks to add exorbitant, unexpected charges. In many cases, the extra charges covered services which were unjustifiable or unwarranted; or which were not explained ahead of time to the consumers, the State alleges.
The additional costs inflated the total price of each move to anywhere from $500 to $4,940. The average total price was $1,400 - reflecting an increase of more than 500 percent above an original $210 quote. The State alleges that the defendants typically waited until consumers' belongings had been locked up in a moving vehicle, or in storage, before informing them of the higher prices. When consumers refused to pay, the defendants typically told them their property would be kept in storage and not returned until the consumers paid the demanded amount, as well as storage costs. On one occasion, the defendants' employees allegedly demanded sex in exchange for reducing the high price.
On several occasions the defendants drove away with consumers' property, refusing to return it for days until the consumers paid. When consumers did receive their property, items were often allegedly missing or damaged. The defendants allegedly refused to pay for lost or damaged goods, and often allegedly refused to respond to the consumers' complaints.
Progressive Movers and Egorov are accused of conducting these actions while bound by the terms of a prior Consent Order entered into with the Division on July 19, 2010. The Consent Order, agreed upon to resolve earlier consumer complaints, allowed Progressive to remain in business while subject to certain limitations and requirements. Progressive's and Egorov's alleged new violations constitute failures to abide by the Consent Order, subjecting them to enhanced civil penalties.
The Division is seeking full restitution for the affected consumers, as well as civil penalties, and repayment for the State's investigative costs and attorneys' fees.
Advice for Consumers:
Before hiring a mover, review the tips available from the New Jersey Division of Consumer Affairs
- Call the Division of Consumer Affairs at 800-242-5846 to learn whether the mover you're considering is licensed. Be sure to ask whether consumer complaints have been filed against the mover.
- Be sure to obtain a written estimate from the mover you select. The cost can be estimated on an hourly rate, the rate of your shipment and miles traveled, or by cubic measurement.
- Never pack jewelry, money, or valuable papers with your goods to be moved. The mover is not responsible for items of extraordinary value.
- Be sure to check your goods as they are being delivered. If loss or damage is discovered, notify the mover immediately. A damage claim can be filed up to 90 days after the move date.
- Unless you purchase additional coverage, the mover is required to compensate you only up to 60 cents per pound, per article, for damages.
Deputy Attorney General Nicholas Kant, in the Division of Law's Consumer Fraud Prosecution Section, is representing the state in this action.
Consumers who believe they have been cheated or scammed by a business, or suspect any other
form of consumer abuse, can file an online complaint
with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey)
or 973-504- 6200.
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