Con artists are everywhere. From false emails to malware to hacking, there are plenty of ways scammers can access your private data or trick you into downloading viruses. Fraud in the trucking industry is no different. Trucking industry scams range from computer-based targeting to cases of a false identity to contractual loopholes. With many avenues of attack, it can be challenging to know who to trust.
However, if you know what to look for and how to protect yourself, you can easily avoid major monetary losses and security breaches. It’s all about staying diligent and covering all your bases. The ability to identify threats early is invaluable. This guide will go through the many varieties of trucking scams and provide solutions to help you stay out of trouble.
Accepting Loads From Strangers
When it comes to accepting shipping loads from companies or delivering services you aren’t familiar with, you need to ensure you cover your own safety before proceeding with anything. This means taking precautions from before you strike an agreement to the time you complete the job. If you pay attention, check the other entity’s reliability and create a thorough contract or written agreement, you’ll be much safer.
During the process of working with or declining the offer from the broker, there are several ways you can defend yourself from potential scammers and con artists:
Before you even begin creating the terms for an agreement, you should thoroughly research the broker or business looking to work with you. The amount of time you spend on this should depend on how comfortable you are and the credentials you find. If you’re at all hesitant about anything, you can always do more digging and ask more questions. Legitimate companies will have no problem with providing answers and being transparent before reaching an agreement.
If you jump into a business relationship too soon and without doing background research, it can negatively affect your business. For one, the broker could be notoriously difficult to work with or could have a history of non-payment. They could also be running an avoidable scam and be banking on the chance that you won’t conduct a thorough background check. You can avoid these kinds of troubles with due diligence.
Protect your business and your money by looking into several details before deciding to accept an offer:
- Create a thorough internal vetting process: While you may want to provide fast service, it’s crucial that you take your time to conduct a thorough vetting process before moving forward. This plan should include various background and credibility checks, including creditworthiness and their average days-to-pay scores from prior business interactions. You can’t ask for tax returns, so their average days-to-pay score will help determine how they operate and whether they’re reliable. If they have any performance-related issues, you may want to be wary of the same occurrences. Also, check to see if the company or broker has any outstanding non-payments.
- Conduct your own research on the company or broker: Beyond checking their payment credentials and past business records, you should also conduct your own research into the company itself, from your point of contact to the overall history. If you have trouble finding information, it may be a sign of fraudulent activity. Plenty of records should be available, whether they be social media profiles, credible websites and customer reviews.
- Check web reviews and performance ratings: If you’re unsure about how well a company interacts with its customers and partners, online reviews and performance ratings are helpful research. Check for any recurring issues with billing, contractual negotiations or disagreements. Even if the business isn’t a scam, you should still be sure they’ll provide a pleasant working relationship.
- Read all of the fine print: If you decide to take a step forward and ask for their terms for the job, it’s essential to read through the contract carefully. Even if a business has good ratings, they may still try to take advantage of you by burying details in the contract. Check the fine print for any strange conditions or wording, and if anything stands out, be sure to highlight, question or modify it and send the contract back for renegotiation. You can create more clearly defined terms or revise clauses based on your company’s needs.
On top of conducting thorough background checks and gathering as much information as possible, you can also call the broker to ask more questions. Sometimes speaking to the representative one-on-one can provide further illumination. If your point of contact refuses to answer questions, seems impatient with your thorough research or tends to give vague answers in response, they might be running a scam.
Once you’ve conducted all the background checks and seen all there is to see, you can choose to work with the broker or deny their request. Remember, you don’t have to accept their offer, especially if you think you’ll be unable to reach an agreement or you don’t trust them. Your safety comes first, so be sure to make the choice that best suits your business.
If you accept their agreement and choose to do business with the broker, you should still take secondary precautions, such as:
- Advanced route planning: Before you begin the delivery, you should have a detailed plan regarding your route. Create a timeline that includes specific roads and stops, so you can avoid pulling over in any sketchy locations or wasting fuel. By mapping your route beforehand, you’ll be able to take the most efficient route possible and keep your broker informed.
- Check calls and load tracking: Most brokers will include a contractual obligation to answer or make daily check calls to confirm your location and schedule. If it is in the agreement, most also include a clause that penalizes a failure to call with fees. Check calls are also an excellent way to keep in touch with your broker to ensure nothing has changed regarding the shipping schedule or delivery time. Load tracking services typically include automatic calls and encourage your broker to work with you more closely.
- Document detention time: On delivery day, drivers may have to wait for shippers and receivers to proceed with any pick-ups or drop-offs. Unless otherwise specified in the broker’s terms and agreements, detention time typically kicks in after two hours, meaning if you have to wait any longer, you’re entitled to additional pay. But it’s essential to have documentation of your wait time. Have an authorized party sign, date and time-stamp your arrival and wait to ensure you’re properly compensated. Load tracking can also help here.
- Delivery day paperwork: When you arrive at the destination and have fulfilled your delivery, have the paperwork in order and ready for your broker. Providing it immediately will help you avoid any delays in payment. The time on your payment terms begins as soon as you deliver the required paperwork, so be sure to include your invoice as well.
With all of these precautions in place and a solid contract to back you up, you shouldn’t face payment or delivery issues. As long as you work closely with the broker and keep full documentation of your time, expenses and routes, you’ll have everything you need to raise a dispute should the customer refuse payment. The more detail you receive and provide, the better.
Ultimately, if the entire arrangement doesn’t feel right or you can’t bring yourself to trust the broker or company, you can always decline them. You may lose that job, but if it turns out to be a scam, you stand to lose a lot more than one invoice. Protecting your data, money and shipments comes first.
In the modern age, security is an issue that transcends physical shipments and warehouses. While ensuring your trucks and facilities are safe from theft is crucial, you also need to take cybersecurity into account. Online scams have become more prevalent in the past decade, and talented scammers and hackers can leave you with little to no chance of tracking them down.
To optimize your security online, it’s essential to pay close attention to:
- Smart devices: Nowadays, smart devices are everywhere, and they’re constantly collecting and storing your information. From cellphones to camera doorbells and app-powered locks, more and more of your daily functions are connected through smart technology. But these devices are also open to hackers. Be sure to keep all your private financial and business information locked behind secure passcodes and refrain from sharing or storing them anywhere that might be publicly accessible.
- Hacking and malware: Hackers often use false links or downloads to compromise your computer systems, breaching your security and allowing them access to sensitive information. Be wary of any odd links, downloadable files or programs and emails that come your way. If you cannot verify their validity with the sender or through the host website, it’s best not to take any chances.
- Cryptocurrency: Cryptocurrency is highly unregulated, making it a significant target for financial scammers. One of the biggest ways they target companies and individuals is through social media networks. Crypto scams can be particularly hard to recover from, as the hackers responsible often remove any connections and trails that could implicate them before you even realize you’ve been compromised. The best way to avoid a cryptocurrency scam is by educating yourself before investing.
- Advertisements: False advertisements are prevalent on the internet, especially on social media applications and sites. Before you provide any information, such as subscribing to an email list, or interact with links, be sure to verify the ad comes from a real and honest company. You can check the validity of businesses through the Better Business Bureau website. In general, if a deal appears to be surprisingly or uncommonly good, look into it further before biting.
The best methods you can use to avoid scammers are educating yourself about different types of scams, verifying ads, businesses and links, saving information in secure places and being careful about what you click. You can review a full list of common online fraud methods to understand what to look for if you suspect a scam, and if you do come across something suspicious, you can report it to help others.
One of the most prevalent methods of online scamming comes in the form of emails. Your inbox is a prime target for spam and phishing attempts, and you may not even realize an email you receive is a security threat. Experienced scammers know exactly how to target companies and will often pose as an important person to gain information or money transfers. They may take on the role of a CEO, employee or client, which can make sniffing out the scam a challenge for many.
The Federal Bureau of Investigation (FBI) refers to these kinds of threats as email account compromise (EAC). Often, the emails will appear completely valid, and the sender will use viable reasoning or urgency to make their request seem acceptable.
The FBI recognizes six varieties of EAC, in which the sender poses as:
- A CEO asking the CFO to wire money to an account.
- A vendor or supplier requesting a change in or modification to an invoice, typically an additional payment.
- An executive requesting the transmission of copies of employee tax information.
- A senior employee requesting to change the account where their employer sends their payments.
- An employer or clergyman requesting the recipient to purchase gift cards.
- A real estate agent or title company requesting an account redirect for real estate sale proceeds.
While these are some of the most common scenarios, senders can be creative with their supposed identities and requests. Scammers may ask for information, payment, account transfers or purchases and send malware downloads or links. And if you don’t realize it’s fraud right away, it can be challenging to track down the sender or retrieve any stolen money, as many scam artists are experts at leaving no traces.
Just as with cybersecurity threats, some of the best ways to avoid becoming the victim of EAC are education and verification. You need to learn what these scams may look like to catch them once they hit your inbox. If you’re ever unsure of a message, check the identity of the sender and verify their validity. If you work within a company, it’s an excellent idea to set up a scam report system as well, so if one individual catches it, they can warn others about the attempt.
Working with a factoring business can be a beneficial move for your shipping business. They allow you to request an advance on invoices when you have particularly slow-paying clients, providing you with the immediate working capital you need to reinvest into your business. However, since factoring is a growing industry, it’s also a major target for fraud.
Typically, factoring scams target the factoring companies themselves. Established or and new clients may attempt to request payments based on fraudulent invoices and documents or inflating the numbers on an invoice. While the first takes far more effort, the second can be as simple as faking a clerical error. If the client is an established partner, the fraudulent requests are more likely to go unnoticed until it’s too late.
Factoring scammers can also target brokers in the form of fuel advances. The fake carrier will book a shipment with a broker and send falsified documentation of a load pick-up that didn’t happen. They’ll then request a fuel advance from the broker, who — if unsuspecting — will provide the payment, and the scammer will run with the money. This type of fraud results in carrier identity theft and a significant loss in revenue for brokers.
Partnering with a reliable factoring company can protect you from client scams, as long as they’re a legitimate company. Since you’re dealing with sensitive financial information, it’s important to verify the validity of these companies and choose one that suits your business’ needs the best.
For couriers and shipping companies that work with a reliable factoring company, it’s also easier to avoid non-payment scams. By partnering with a company that offers non-recourse factoring, you’ll be protected and paid in the event that the billed party fails to settle their invoice. As long as the unsettled payment isn’t due to a billing or paperwork error on your end, you’re guaranteed the amount of money requested in the invoice or contract.
Secure Your Shipping Business With FactorLoads
Waiting for payment can be troublesome for shipping businesses, and if your client tries to deny your invoice, it’s even more of a hassle. With FactorLoads, you won’t have to worry about timing or attempted factoring fraud. We help you keep your cash flow steady, so you can reinvest your money when you need to, rather than waiting for clients to settle their invoices. Our professionals will also provide you with trucking advice and education, roadside assistance, 24/7 service and other valuable shipping resources.