Fraud—The Other F Word in Trucking

At Truckstop, we’ve been tracking fraudulent activity in the freight industry since 2003. With 20 years of experience and data, we’re familiar with freight fraud trends in the market, common scams, and the best practices for protecting your business. Based on our reports, there is currently a significant upswing in fraudulent activity.

“In Q4 of 2022, the data showed a 400% increase in fraud complaints in the industry,” said Brent Hutto, Chief Relationship Officer at Truckstop. “That’s the highest increase of fraud complaints we’ve seen in trucking since 2008.”

Industry data confirms this trend, as Verisk Analytics’ CargoNet reported a 20% increase of cargo theft, and a total loss value of $223 million in 2022.

 “There are a tremendous amount of bad actors taking advantage of an industry that’s holistically just trying to do its best for the American public to get freight delivered.” said Hutto.

In order to help create the most successful business for carriers, brokers, and shippers, we recorded a webinar compiled with common trends in the market and strategies to prevent devastating financial loss.

Watch the webinar for actionable ways to identify and prevent scams before they can infiltrate your business.

Red Flags to Watch for When Screening Carriers

Freight fraud hurts everyone involved—the shipper, the broker, and the carrier. These screening tactics can help catch scammers at the first sign of trouble.

Carrier Contact Information

The first red flag to look out for is contact information. Bad actors will often change a character or two in an email address or other identifying information so that it looks legitimate at first glance.

• Be sure to inspect email addresses for things like an “O” switched out for a “0” or a suspicious domain spelling. They may also make subtle changes in punctuation like “email.truckstop.com” vs “email_truckstop.com”.
• Virtual phone numbers—like a Google phone number with no physical address attached to it—also have a high correlation with freight fraud. Call the numbers to verify it is in fact the right carrier.
• Verify the physical address being used is an actual location, not a vacant lot. Multiple carriers using the same address can also be an indicator that scammers are working together to commit freight fraud.

Authority Information

Specifying authority tenure when looking for carriers used to be a great way to find experienced, reliable contacts. However, having an authority of 90 days, 120 days, or even sometimes a whole year may no longer guarantee the legitimacy of a carrier.

Verifying authority with trusted technology can help mitigate this risk. Check the Taxpayer Identification Numbers (TIN) against W9 information to catch potential fraudsters.

Looking at inspection history can also provide helpful clues. For example, if a carrier has 20 trucks and no inspection history, you can consider that a major red flag.

Commonly Targeted Cargo

It’s important to be aware of commonly targeted cargo trends. Currently, scammers target things like household goods, electronics, and solar panels because these are items people can turn around and sell quickly at a high price point.

Food and beverage products have also seen a surge in theft in 2023, most likely related to increasing consumer costs. Even seemingly inconspicuous items like pistachios have been targeted by scammers.

Targeted cargo changes frequently in order for scammers to try and stay under the radar. Work to stay up-to-date and in communication with your professional network to be aware of market shifts.

Ways to Establish, Enforce, and Monitor Due Diligence

Even if your business issues a written standard operating procedure (SOP), actually enforcing these standards is what will make a big difference. Let everyone involved in the process know your intent for carrier vetting, and then make sure frontline teams are actually doing the work to put it into practice to keep your business safe.

How Technology Protects Your Business

To help your teams stay on top of mitigating risk, it’s crucial to leverage the technology available.

“When comparing technology vs. an employee dedicated to carrier vetting, nine times out of ten the ROI is in favor of the technology,” said Haubenstock. “It isn’t just ‘nice to have’ anymore. It’s a requirement to be successful in this business now.”

Technological features put in a lot of heavy lifting so you don’t have to and can significantly limit your manual efforts while increasing security for your processes.

1.    Require an Invitation to Register

When onboarding carriers, require an invitation to register on your website. This can be an invaluable tool in weeding out scammers.

2.    Automate Your Business Rules

Filter all of your preferences automatically to immediately de-certify those who don’t meet your qualifications. This automation eliminates the risk of human error and helps frontline employees working with carriers follow your SOP.

3.    Incorporate Immediate Notifications

Because this industry moves quickly, your team needs immediate notifications of any changes in safety authorizations. You could be talking to a carrier with valid insurance today, and tomorrow their insurance goes invalid. Technology lets you access continuous carrier monitoring and alert your team to any changes in real-time.

4.    Use TMS Integrations

Work with technology that integrates directly into your existing TMS to make compliance changes immediately and easily accessible to your team. Use trusted technology to keep your business safe and running smoothly.

5.    Leverage the Network Effect

Communicating with your professional network and government officials is a powerful defense weapon. Talking with other brokers, sharing scam trends, locations, and recovery efforts, and cooperating with agencies like the FBI can better safeguard your business and the transportation industry.

Stay Informed and Understand The Risks

The more informed you are about current scams and how to protect your business, the better. Here are some ways to help your team, and your carriers, remain compliant at all times.

Info Security

Keep your information secure across your entire business by implementing these simple steps.

1. Do not re-use passwords. Create unique passwords for each account and be sure and change your passwords frequently.
2. Avoid commonly used, easy-to-guess passwords. Instead, use short phrases or sentences for your passwords. They are longer and tougher to hack, but easier for users to remember.
3. Turn on multi-factor authentication (MFA) where available. The main factors of MFA are something you know, something you have, and something you are. MFA makes stealing your information much harder.

Educate Your Carriers
Let carriers know what to watch for. Bad actors impersonate carriers as well as brokers, and you can help protect each other.

Understand Phishing and Smishing
Implement training on phishing and smishing scams. (Phishing is done via email, while smishing is done over text message). One stolen load can have a huge negative impact.

Invest in the Safety of Your Business

Don’t let a scam ruin your business. With Truckstop, you get actress to the largest carrier and broker network in the country. We prioritize your security with a robust RMIS Carrier Onboarding and Monitoring software to help keep you, and your drivers, compliant on every haul. Learn more today.