FACTORING BLOG

Freight Broker Fraud and the Effect on Carriers

As a truckload carrier, you need to be aware of and protect yourself against one of the biggest issues in the industry: freight broker fraud. Freight broker fraud is a form of theft where deceptive brokers take advantage of carriers by setting up a shipment, collecting payment from the shipper, and then disappearing without compensating the carrier.

How to Prevent Fraud

Protecting yourself from freight broker fraud starts with doing your research and checking references carefully. Prior to starting any relationship with a broker , make sure to utilize the FMCSA website to verify the broker’s phone number, authority date, and, if needed, bond information. Scale Funding’s Credit Department utilizes third-party reporting as a safeguard. Additionally, be on the lookout for altered rate confirmations, as these imposters will often edit a legitimate rate confirmation to fit their agenda. These individuals change legitimate brokers’ phone numbers and email addresses and load information on rate confirmations to appear as another broker. Also, be wary of unrealistic freight rates that may be an attempt of distraction.

Responsibilities of Carriers

As a carrier, you have a responsibility to track and audit payments to make sure your company isn’t being taken advantage of. If you suspect fraud, it is essential that you monitor the broker’s performance and file complaints with the Department of Transportation if necessary.

Conclusion

Freight broker fraud is a growing problem in the truckload industry, and it is essential for carriers to be aware of it so they can protect themselves from being taken advantage of. Researching and checking references on brokers, setting up safeguards, and using available systems are all important steps in preventing fraud.

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