Fighting Fraud Means Fighting These Fraud Monsters 

As a broker, there’s no doubt you’ve developed a keen eye and methodical vetting process for fighting fraud. But risk tolerance lives on a spectrum, and you should have ultimate control over which carriers you’re willing to hire. In addition to key fraud indicators, today’s fraud protection requires tools that deliver insights you need while leaving the ultimate hiring decision up to you. 

However, freight fraud continuously evolves to exploit vulnerabilities in your business. Bad actors are getting smarter, faster, and sneakier at targeting and infiltrating systems. As bad actors continue to shapeshift—to the extent of showing up as multiple profiles on a single day in hopes of finding vulnerabilities to expose—it’s critical to understand their tactics, recognize data patterns that are common among bad actors, and employ comprehensive fraud in an effort to stop them in their tracks before they bring your business to a screeching halt. 

Beware of the monsters targeting freight businesses

Chameleons, bandits, anglers, and zombies—oh my! When it comes to combating fraud effectively, know your enemies! The following “monsters”—risky carrier profiles—demonstrate risky behavior. Recognizing data patterns common among bad actors, or “risk indicators,” goes a long way toward helping to keep fraud at bay and these monsters out of your freight business.

The chameleon

Chameleon carriers are companies that have been shut down for running an unsafe operation only to reappear under a new name and DOT number. The chameleon hides in plain sight to evade regulatory oversight, sidestep sanctions due to safety violations, or escape financial liability. Chameleons deliberately attempt to dodge fines, fees, and penalties.

Chameleons put you at risk for double-brokering and pose severe safety and performance issues.

Carrier profiles accompanied by indicators of fraudulent or risky behavior might include reused contact information or VINs. Watch for these risk indicators, plus make a habit of reviewing community watchdog reports that might alert you of these bad actors as part of your fraud mitigation process.

The bandit

The bandit steals the identity, credentials, or contact information of a legitimate carrier to pose as that person and either commit double-brokering or cargo theft, which has soared by 49% in the first half of 2024 alone.

Bandit profiles might include recent or suspicious contact changes, an unforeseen IP address or VPN use, or an unexpected or suspicious truck showing up to pick up a load. CargoNet estimates that a total of $154.6 million worth of goods were stolen in the first quarter of 2024. So if you think it can’t happen to you, you’d be wise to think again!

You should always thoroughly vet every carrier before hiring them, pay particular attention to recent contact changes, and verify the identity of who’s behind the wheel. Incorporate identity verification and multi-factor authentication as “must haves” in fighting fraud. Truckstop’s Identity Verification validates the identity of anyone who attempts to log in on behalf of a carrier by matching their government-issued ID against a real-time selfie. Multi-factor authentication provides yet another layer of protection in your arsenal of fraud-fighting weaponry.

Notify the shipper if you suspect illicit activity. In fraud mitigation, communication and vetting are key!

The angler

The angler uses phishing tactics—deceptive emails or social engineering—to trick users into revealing business credentials or other private information to commit double-brokering, cargo theft, or identity theft.

Be aware of red flags and know how to identify suspicious emails. You should be wary of emails that seem out of place, irrelevant, unexpected, or unsolicited. And while scammers are very good at making the “sent from” look like a legitimate source, these deceptive emails most often come from unknown senders.

Profiles include pricing a load significantly below the market rate, asking either no questions or too many questions, or other abnormal behavior that gives you pause, like an email message that offers something unexpected or unusual, asks for personal information you wouldn’t normally share, or seems inappropriately demanding.

Don’t get hooked! Help stop the angler in their tracks by having a thorough understanding of current fair market rates and scrutinizing “weird” or unusual emails. A common phishing tactic is using a domain that looks very similar to the legitimate domain, like truckstop.com (the real domain name) vs. truckstop.net or truckstop.us, for example.

The zombie

A zombie appears in the freight industry when a legitimate company sells all its information, including MC and email domain, to this monster. The zombie aggressively attacks, looking to commit double-brokering or cargo theft and put your business in serious jeopardy. Some are selling their MC numbers to nefarious buyers who intentionally keep the once-legitimate contact information associated with it, victimizing carriers by perpetrating cargo theft, load payment theft, and other scams and schemes.

A recent flurry of onboarding activity, large gaps in authority or insurance, or an inactive business filing are all data patterns often associated with these bad actors.

Be on the lookout for any anomalies that show up in your vetting process, and double-check any data or behavior that seems “off.” A good habit to add to your vetting process is to check your secretary of state business registry. The Secretary of State’s office processes filings, maintains records, and provides information to the public relating to business entities and other business filings.

Look to the latest technology designed to combat fraud

As technology evolves, so do the fraudsters intent on infiltrating your system to wreak havoc on your business. The more you know about these ugly monsters, who come in all shapes and sizes, the better armed you are against them and the risks they pose.

Use technology to fight back! Manual vetting processes take time and resources, plus they’re prone to human error. And while gut feeling should never be ignored and you should always err on the side of “better safe than sorry,” gut feeling is not enough to protect you against these insidious monsters, who are often highly organized and sophisticated. Arm your team with an arsenal of technology tools that give you the flexibility to leverage your expertise and help you make more informed decisions.

Truckstop has released a tool that provides a summary of carrier risk indicators to broker workflows, designed to add speed and simplicity to your due diligence:

Truckstop Risk Factors — available through an Outlook Add-in, Chrome Extension, Microsoft Edge Extension, or API — delivers high-quality data you need, conveniently analyzed, summarized, and color-coded for quick comprehension right in your workflow. Using Risk Factors, you’ll quickly learn the key indicators of fraud and what to watch for to avoid hiring a potentially risky carrier.

Risk Factors is your first line of defense, equipping you with data to help make quick, more informed decisions about any carrier you’re considering hiring. You’ll get info intended to help you decide to vet a carrier further, strengthen a relationship with, or avoid altogether.

For carrier vetting that doesn’t slow you down, get a free trial of Risk Factors to see for yourself!