Is requiring an upfront deposit illegal? This is a common misconception in the moving industry. In general, it is legal for a moving company to ask for a deposit... but that doesn't mean it's routine. In fact, it's rare to encounter a moving company that asks for one.
While lawfully allowed, the request to supply a deposit upfront serves as a warning to the customer. Asking for the full price of the move ahead of time is a potential scam that unscrupulous companies tend to carry out on unsuspecting victims.
A professional and reliable mover uses an upfront deposit as collateral
In most cases where a deposit is requested upon booking, the moving company asks for a small amount of money upfront. They use the down payment as a warranty which insures against a customer backing out and canceling the day of.
Losing a booking costs the company money, because that lost time could have been spent on a legitimate move. The upfront retainer protects moving companies from these issues.
TIP: It's perfectly okay for you to ask the mover the reason behind the deposit -- especially in the winter. A mover's busiest season occurs in the summer months (May through August).
Look out for these red flags when a mover asks for an upfront deposit
What's the biggest red flag when booking a mover? A moving company that asks the customer to put down a large sum of money.
When moving companies request a deposit, it should never be more than a few hundred dollars. A mover that asks for more is usually operating a scam, so beware.
If you book a moving company that demands half of the total moving costs in advance, you might be dealing with a moving broker and not an actual moving company. There is also a high possibility that you are being swindled. An honest and reliable broker will never ask for such an unreasonable amount of money for no services rendered.
Read customer reviews to see if other people mention paying an upfront deposit
When hiring a moving company, it's important to research their history by doing a background check on a moving company:
- Read real customer reviews
- Check their rating with the Better Business Bureau (BBB)
- Verify their licensing and insurance credentials
- Ask the movers any questions you may have about the process before you make your choice
If you book through a broker, it can be difficult and even impossible to figure out the name of the actual company moving your belongings. And if you don't know who is moving you, how can you check their reliability?
Avoid getting scammed by paying your deposit by post-dated check or credit card
If you're moving in peak season, like during the summer or in an area where lots of households are relocating, the moving company has every right to ask you for an upfront deposit. The best way to avoid a moving scam is to pay in a method that can be traced.
TIP: Be wary of any mover that wants the deposit in cash!
Reliable moving companies will allow you to pay the deposit however you wish. That way, you have proof you paid them and can cancel the payment if they disappear. Request a stop payment on checks that have not yet been cashed or post-date it for after delivery. If you prefer to pay by credit card, you can ask the card provider to issue a chargeback.
Have you had a bad experience with an upfront deposit? Tell us about it!