Donna Ryun
Information Services

Question: I’m trying to keep track of all the chargebacks deducted from my settlements, and I can justify everything except for a column marked “MISC” charges. I don’t understand where they come from and nothing is specified. Can you help clear this up for me?

Answer: You are using good business sense when you check your settlements to justify any chargebacks the carrier makes to your compensation. You should always know why these deductions are made and how they are calculated. This is your right according to federal law.
Here is the exact wording taken from section 376.12 (h) of Title 49, in the Code of Federal Regulations:

(h) Charge-back items. The lease shall clearly specify all items that may be initially paid for by the authorized carrier, but ultimately deducted from the lessor’s compensation at the time of payment or settlement, together with a recitation as to how the amount of each item is to be computed. The lessor shall be afforded copies of those documents, which are necessary to determine the validity of the charge.

A chargeback is basically a cost you agreed to be responsible for when you signed the lease and that the carrier has paid initially, then “charged back” to you via a deduction from your compensation. There should be no question about the legitimacy of the item charged back or the amount of the deduction because it should be clearly specified in the lease that you and the carrier signed.
When your carrier lists various deductions to your compensation under a miscellaneous column and does not clearly state within your lease what the charges are for and how they are calculated, it is violating federal law.

Perhaps these miscellaneous chargebacks are all legitimate costs you have agreed to within your lease; however, unless they are clearly identified, you really have no way of determining that.
A dishonest carrier could be charging you for purchases it requires you to make from or through the company. Since this is a violation of the federal leasing regulations, the carrier may try to hide these purchases under a miscellaneous chargeback heading. Such forced purchases could consist of anything from insurance or installation of satellite systems to picking up the lunch tab for company bigwigs during their weekly meetings. In any case, forced purchases are illegal as stated in section 376.12 (i) of the truth-in-leasing regulations:

(i) Products, equipment, or services from authorized carrier — The lease shall specify that the lessor is not required to purchase or rent any products, equipment or services from the authorized carrier as a condition of entering into the lease arrangement. The lease shall specify the terms of any agreement in which the lessor is a party to an equipment purchase or rental contract which gives the authorized carrier the right to make deductions from the lessor’s compensation for purchase or rental payments.

The Owner-Operator Independent Drivers Association (OOIDA) worked tirelessly to get the federal truth-in-leasing regulations passed in the late 1970s because there was a definite need to protect leased owner-operators from motor carriers who would take unfair advantage of those who devote their careers to transporting the freight that sustains our nation.
Today, OOIDA still fights for your rights by taking dishonest carriers to court to uphold the federal truth-in-leasing regulations. This includes those carriers that attempt to profit by making unjustified and illegal chargebacks. As these decisions are won, more and more carriers are reviewing the wording of their own leases to ensure compliance with federal law to avoid the possibility of facing a legal action.
You can help to uphold your rights by becoming familiar with the regulations designed to protect you. Get a copy of the federal truth-in-leasing regulations by visiting our Web site at www.ooida.com or by calling us at 1-800-444-5791.
It is your responsibility to read and understand your lease agreement before signing it to ensure that it complies with the regulations. Ask for the documentation necessary to verify any chargebacks made to your compensation, including those listed under the “MISC” column that you alluded to in your question.
Keep in mind that if your motor carrier refuses to provide the documentation you need to clarify these so-called miscellaneous chargebacks and to prove their validity, there are options available to you.
The ICC Termination Act of 1995 contains the private right-of-action provision OOIDA fought to have included in the wording. This means you can sue your motor carrier to obtain enforcement of the leasing regulations, force them to refund illegal chargebacks and make them pay your legal expenses as well.
While I hope you are able to calmly confront your motor carrier to get these “miscellaneous” charges clarified, knowing your legal rights under the federal truth-in-leasing regulations can give you the confidence you need for a favorable outcome. LL

If you have questions that you’d like answered, please e-mail them to dryun@ooida.com or send them to me at PO Box 1000, Grain Valley, MO 64029. Although we won’t be able to publish all questions in Land Line, you will receive a response.