Escrow Rules
24 OVERDRIVE APRIL 2009 E scrow accounts have always been a hot button for owner-operators. Carriers' negligence in disclosing items escrow money was intended to pay for has led to disputes upon lease termination. Occasional law-suits challenged carrier practices, sometimes with positive outcomes for the owner-operators. One result has been more fair and consistent escrow practices. Another outcome is that carri-ers have been more willing to establish voluntary fi nancial relationships with owner-operators to facilitate savings for maintenance, taxes and other large bills that can handicap a budding trucking business. Under federal law, however, any fund held by an owner-operator in cooperation with an interstate carrier is governed by the escrow regulations in leas-ing. Full disclosure of all items secured in the escrow is the carrier's responsibility. It's incumbent on the owner-operator to know what he or she is getting into before signing the lease. Security escrows Independent owner-operator Robert Harsell's experience with the most common type of escrow account, the security escrow (or bond), is common. About seven years ago, the Virginia-based owner-operator was leased to a company with a hefty $3,500 escrow requirement, he says, which they dropped to $2,500. Its main purpose was to pay any cargo insurance claim deductible. I got my money back when I left the company, he says. Escrows of this size are the exception unless you're leasing the truck or in a lease-purchase situ-ation. For instance, the much smaller $700 escrow required of Dart Transit contractors acts as a sort of guarantee for contractor advances, various expenses and other things the carrier takes on, says Steve Gundale, company spokesman. At Mercer Transportation, an initial $350 covers base plates for contractors. When they terminate the lease, we give the money back, says company Controller Tim Pike. Problems arise, says Sheri Aaberg of leasing company ATBS Leaseco, when the carrier fails to adequately communicate the escrow account's pur-pose. The sudden appearance of miscellaneous or unspecifi ed escrow deductions on settlements Escrow rules Before the time comes to take your money and run, make sure you know what your reserve fund is used for and the terms for getting it back. BY TODD DILLS Have you ever utilized a carrier escrow maintenance account? No 61% Yes, and it was helpful 26% Yes, but it was unnecessary 13% eTr uck er .com poll, 111 r esponses Have you ever been cheated on a carrier escrow account? Several times 43% Never 41% Once 16% eTr uck er .com poll, 151 r esponses