February 20, 2002 PUC: 17

Media Contact: PUC Press Office, 415.703.1366, news@cpuc.ca.gov

PUC TO INVESTIGATE STARVING STUDENTS FOR VIOLATIONS

The California Public Utilities Commission (PUC) has initiated an investigation into whether Starving Students, a statewide household goods carrier headquartered in Los Angeles, has violated rules and regulations governing household goods carriers.

Commission staff reports allege that Starving Students under-reported its gross operating revenue to the Commission in order to under-pay license fees, and operated during periods when its license was suspended for failure to have valid insurance.

The reports and declarations from 58 consumers documenting the allegations in this case demonstrate that Starving Students has:

· Failed to timely acknowledge and process consumers' claims for lost, stolen or damaged goods;

· Improperly denied consumers' claims for failure to note lost or damaged goods at the time of delivery;

· Failed to properly supervise and train its employees, resulting in untrained and unqualified workers;

· Failed to properly supervise and manage its employees and facilities, resulting in items being stolen while in the custody of Starving Students and/or its agents and employees;

· Provided illegal verbal estimates;

· Charged more than the provided estimate;

· Failed to provide the required "Not To Exceed Price" on shipping documents;

· Failed to issue the "Important Information For Persons Moving Household Goods" booklet;

· Arrived hours late or failed to provide scheduled moving services at all;

· Failed to honor valuation options;

· Solicited tips, sometimes through extortion or intimidation.

Commission staff obtained Starving Students' Consolidated Financial Statements and Federal and California Income Tax Returns prepared by an independent CPA firm. The California Income Tax Returns Schedule R-1 for 1998, 1999, and 2000, show discrepancies between the amount of intrastate revenue reported on the tax returns and the amount of intrastate revenue reported in Starving Students' quarterly revenue reports to the Commission.

The Commission staff report alleges that Starving Students failed to include all of the revenue accounts relating to intrastate transportation of household goods in its quarterly reports. The reports allege that the amount under-reported for 1998 was $3,952,201; for 1999 was $6,719,576; and for 2000 was $6,202,956.

Commission staff began the investigation of Starving Students in May 2001. Staff reviewed documents and consumer complaints covering a three-year period, 1999 to 2001. Staff reviewed 233 complaints received by the Commission and 81 complaints received by the Better Business Bureau.

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