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Fraud continues to be on the rise in transportation. From double brokering to identity theft, these scams can result in significant losses for owner-operators and small fleets.
Two common practices are double brokering and identity theft.
Double brokering
Double brokering is when an unauthorized broker or carrier transfers a load to another carrier without the shipper’s knowledge. In short, scammers are bidding on loads and getting paid up front by the shipper — only to pass the load onto a different carrier.
When the carrier that hauled the load invoices the shipper for the work, the carrier and the shipper discover the scam. By then, it’s too late — the fraudster, with the money, is long gone. These losses can crush smaller companies.
Double brokering has always been a risk in the transportation industry. Unfortunately, due to low rates and current market conditions, scammers are utilizing this strategy more than ever to commit fraud.
Identity theft
Identity theft is another — if not the biggest — risk in the transportation industry.
Scammers are creating fake companies and stealing the identities of legitimate brokers and transportation companies to commit fraud. Many are utilizing the carrier onboarding process to collect your credentials and use them to book fake loads, hold loads hostage, or divert payments to themselves. When impersonating honest freight brokers, fraudsters will request banking information for deposits on items such as insurance, then within weeks, they drain your bank account, never pay you, and vanish.
How to protect yourself
Luckily, there are steps to take to protect your company from becoming the next victim of these fraudulent practices.
1. Before accepting a load:
- Check SAFER, a free service offered by the U.S. government, to confirm that the company brokering the load has proper authority.
- Check to make sure all the information listed with the Federal Motor Carrier Safety Administration (FMCSA) matches the rate confirmation you received.
- Regularly check your company information on SAFER to ensure nothing has changed or been altered.
2. Your company name should always be on the bill of lading (BOL) as the carrier of record. Make sure your company name, USDOT and MC numbers are clear and easy to read on your truck.
3. Be consistent with your business name and information. Using multiple variations of your business’s name and address can make you an easy target. Stick to using ONLY your exact legal entity name so that your company is recognized by customers, vendors, and the public in a consistent manner.
4. Protect your network and computers with protection such as a firewall. Utilize dual authentication whenever possible. Avoid using one general email for multiple employees.
Finally, If you do fall victim to fraud, follow the recommendations set forth by the FMCSA.
Linda Garner-Bunch has been in publishing for more than 30 years. You name it, Linda has written about it. She has served as an editor for a group of national do-it-yourself publications and has coordinated the real estate section of Arkansas’ only statewide newspaper, in addition to working on a variety of niche publications ranging from bridal magazines to high-school sports previews and everything in between. She is also an experienced photographer and copy editor who enjoys telling the stories of the “Knights of the Highway,” as she calls our nation’s truck drivers.
