The transportation industry has seen an uptick in fraud cases and specifically, financial scamming cases. It’s typical for this time of year; the time between Memorial Day and the Fourth of July is prime time for scammers (as is the mid to end of December). The attraction for scammers to financial theft is that it offers a low risk, high reward outcome.  

Experts identify 6 main types of financial theft strategies:

  1. Advances
  2. Fraudulent Paperwork
  3. Extorting Receivers
  4. Check Fraud
  5. False Factoring or Invoicing
  6. Double Brokering

Financial Fraud Prevention Tips:

  1. Put in additional process to limit advances. For example, UWT only provides Comcheks or TCheks once we have verified that the load has been picked up by the carrier.
  2. Validate carrier information at time of qualification. Having a thorough carrier qualification process protects both the broker and the carrier. Make sure you are checking the legitimacy of new carriers by double checking their insurance and verifying their authority. Other areas to check that might indicate red flags related to new carrier setup are generic email accounts, phone numbers/emails that do not match information in FMCSA or other carrier monitoring sites, and a lack of inspections compared to number of trucks and years in business. For carriers, they should ensure that their information is updated in all sites that are used and, in the FMCSA; this helps when you are being set up with new brokers because you can trust that the information they’ll reference is legitimate.
  3. Validate carrier information when change requests are made. Having a thorough carrier monitoring process will ensure these measures; most of the time, you will be alerted of changes made in carrier monitoring sites you subscribe to. These changes are updated by those sites daily so you can be sure they are updated. Again, if an existing carrier emails or calls from a different address or number than you have in your system, make sure to do your due diligence to ensure the legitimacy and representation of the person you are talking to. It is relatively easy for scammers to appropriate carrier information and pose as representatives, often without the carrier’s knowledge that this is being done. If this attempt is made, UWT will contact the carrier to let them know. For carriers, they should ensure that their information is up to date in all portals that are used and in the FMCSA.
  4. Verify information with shippers. Another good tip is to, whenever possible, contact the shipper directly and request the name of the carrier that picked up the load. Brokers should also contact the shipper to verify that the load has been picked up.
  5. Check watchdogs and other monitoring sites for record of recent potentially fraudulent activity. This is good to do time to time for all carriers you deal with, but especially for new carriers. Good resources for this type of information are TIA Watchdog, Carrier 411, and DAT. And, if you are a victim of financial fraud form either the carrier or broker perspective, make sure you report the case to these sites as well. It helps them look for trends and alert their members.
  6. Check load boards; this will protect you from double-brokering and false truck postings. If brokers see a load that looks suspiciously like their own, they should investigate to make sure their loads are not being double brokered out. For carriers, it’s important to make sure your contact information is updated and legitimate on these sites as well. In addition, it’s important to investigate the brokers that you are dealing with to make sure they are legitimate, and that contact information, advances and payment terms offered to you match their business profile.
  7. Enroll in positive pay programs with your bank. This esnsures that fraudulent checks cannot be cashed and will limit your liability.
  8. Verify your financial stability. Research your credit history; using a credit reporting service will help with this. It’s also a good idea to monitor your own credit to make sure it is being represented accurately.
Don’t Be a Victim of Financial Scammers! 8 Financial Fraud Prevention Tips You Need to Know was last modified: by