Fraud in transportation is on the rise again, and the culprits are getting craftier year over year. According to the US Theft Report released by CargoNet in 2013, ninety-nine million dollars in cargo theft losses were reported! However, theft is only one part of the overall picture. Fraudulent pickups, double brokering, and scams involving advances paid for services rendered make up a network of scammers so profitable, it’s reaping rewards for the scammers while leaving innocent parties to clean up the mess.
As a top logistics company and leading third party logistics provider, we are always on the cutting edge of trends, keeping a watchful eye on fraud and ways to prevent it when our customers ship freight. We’ve invested in a partnership with CargoNet, whose purpose is to prevent cargo theft and increase recovery rates through secure and controlled information sharing among theft victims, their business partners, and law enforcement. Our standard operating procedures are ever-changing to stay ahead of the scammers, and we take the time to educate our customers, the shippers, on how to stay smart and protect themselves against fraud.
Currently, the top scams we’ve seen and heard about include identity theft. A scammer will call a legitimate broker posing as a trucking company, having stolen the identity of the unaware party, in order to accept a load. They will in turn double broker the shipment, or arrange another trucking company to actually come pick it up. After it’s loaded, they often call the legitimate broker to collect an advance on the payment, typically 40% of the load’s negotiated price! After delivery, the legit carrier never gets paid, and comes back to the shipper to collect only to find out everyone was scammed. Other times, they don’t collect an advance, but use the signed bill of lading to collect in full. The end result is the same. How can you protect yourself?
1) Check the doors
Did you know that by law, every motor carrier must have their trucking company name and US DOT# or MC# on the side of their truck? It is usually found on the door of the cab. If the name on the side of the truck does not match to the name of the company you hired or your freight broker arranged on your behalf, red sirens should go off with your dock workers. We highly encourage you to create a process by which you require your loaders to inspect the door personally to match the two names and if there is a discrepancy, do not load the truck until it’s been ironed out.
2) Verify employment
Verify that the employee or agent representing a logistics company is truly an authorized representative for the company they claim to be employed with. Contact the company through their website and ask to speak to Human Resources or Agent Support in order to verify employment or an agent agreement exists. If they’ve never heard of the person, something is terribly wrong, but you’ve prevented being scammed!
3) Contact the company
Contact references, not by the number given to you by the representative, but by calling the number listed on the company’s website. If they’ve provided logistics services for the company, the operator can connect you to the right person and you will realize you’re working with a legitimate provider. Otherwise, they could have given you a fellow scammer’s number to provide a fake reference.
For more information on preventing fraud in logistics, feel free to call our Claims Department, led by Amy Herr at (800) 846-3400, ext. 3873. Also, check out our other blog on the subject: “Fighting Fraud in Transportation”.