Freight fraud can cause expensive losses and increase your downtime, resulting in less revenue and a halt in your operations. At FactorLoad, we advocate for small to medium-sized trucking companies and can provide client education that helps protect against fraudulent activities.
Fraud and Scams in the Freight Industry
There are several ways truckers can be susceptible to fraud in the supply chain process, including:
- Fraudsters impersonate legitimate brokers.
- Scammers ask truckers to pay an upfront payment.
- Double brokering occurs, where the legitimate carrier never gets paid.
Freight Fraud Prevention and Security Measures
Be sure to verify every load you see posted on a load board and do thorough research before offering your services. Some ways to spot red flags and do your due diligence before working with any new broker include:
- Obtain accurate information: Call the head office number on the company’s official website, not the one provided in emails.
- Verify their business registration number: Ensure you spot an unregistered and unregulated business.
- Use a regulatory database: Search the Federal Motor Carrier Safety Administration (FMCSA) database to check for MC or USDOT numbers.
- Examine the rate sheets: Confirm that the rate sheets supply accurate, transparent information. If not, you may be dealing with a scammer.
- Look at the load information: Ensure the load information is correct, as fraudsters are interested in getting your money, so they won’t prioritize accuracy.
Steps Toward Proactive Fraud Mitigation
Set up training for your staff and yourself to help mitigate fraud and spot a potential fraudulent transaction. You can do this through a third party or yourself as long as you do thorough research. Topics you could cover include:
- Unsolicited contact out of the blue.
- Discrepancies in communication methods, like different email addresses or phone numbers.
- High-pressure tactics to quicken transactions.
- Inconsistent and unclear paperwork.
- Too good to be true offers.
Verifying Freight Broker Credibility
Always verify credibility before considering shipments with these steps:
- Check their tax ID.
- Ask about or research their insurance information.
- Question low rates.
- Use load boards from a trusted factoring service.
Trust FactorLoads as Your Partner in Freight Factoring
Avoid freight fraud and protect your business assets by doing due diligence and only working with trustworthy factoring services. Building relationships with reliable providers can significantly help you mitigate fraud and avoid freight industry scams.
The team at FactorLoads proudly stands in your corner, helping small to medium-trucking companies accept loads from legitimate companies and get paid on time. Experience unparalleled back office support for the health of your business. Contact us online today or call 1-866-218-0030 to get started.