Protecting Your Logistics Business: How to Avoid Fraud and Identity Scams in a Competitive Industry

Active businesses in the logistics industry likely have stories about being defrauded. They could also tell you about the serious reputation and financial damage this caused. Despite awareness of fraud in the industry it continues to happen at an alarming rate, an epidemic to the entire United States logistics industry. 

The current over-saturation has caused a “dog fight” mentality between carriers as each load is fought for and jumped on as quickly as possible. This often trumps any proper vetting practices used to verify the freight broker’s legitimacy, causing business identity fraud to run rampant.

Scammers continue to pose as active freight brokers, slightly altering their contact information, booking the load and disappearing into the night when the time for payment comes. This leaves us with a confused freight broker, an angry carrier, and a scrambling claims department.

If carriers and freight brokers alike adjust their vetting processes to the current demand of the industry, taking just a few extra minutes, this could save them thousands of dollars and hours of driving time. Employing proper vetting techniques will help discourage scammers from continuing to run what can only be described as an incredibly successful stolen identity scam.

Jet has prepared a couple of items to check off the list that will help to protect your business and avoid these unfortunate instances.

1. Contact Info Check and Verify Documents

Check the contact information and documents being used by the broker or carrier. If it does not match the FMCSA and other verification tools, reach out and confirm the contact details and individuals’ employment using the FMCSA’s listed phone number or email address. Document all communication with the business.

2. Verification resources

It is important to utilize verification tools that will help identify potential fraud. Consider tools such as: FreightValidate, MyCarrierPackets, HighWay, CarrierOK, etc…. There are many products that can offer similar services so take the time to research which ones would work best for your business.

3. Beware load board rates

If you are booking a load with a rate that seems too good to be true, it may actually be. Take time to look at spot rate trackers, like Greenscreen.ai, so you can make informed decisions on the legitimacy of a rate.

4. Joining Communities

Take advantage of logistics associations, industry contacts, and social media like FreightClub and Freight Caviar. Developing connections within the industry can keep you updated on the latest scams or fraudulent businesses and help you avoid potential losses.