Carrier Fraud: Your Guide to Protecting Yourself
We previously wrote about the growing threat of cargo fraud in the supply chain industry. Unfortunately, freight thieves are getting smarter, and the onus is on you to protect your business from carrier fraud. To help you do that we’ll be discussing what strategies you can use to prevent a theft before it happens by verifying the identity of your new potential carriers.
Freight thieves are posing as new carriers and fooling you with forged paperwork and references, giving themselves enough time to drive off with your cargo and leaving you none the wiser until it’s too late.
It’s daunting to think about having to deal with freight carrier fraud. That’s why our guide to verifying carrier identity has been broken down into simple, actionable steps you can use in your business. Protecting yourself doesn’t need to be as overwhelming as an actual theft. Feel free to follow as many of these steps as it takes to ensure your peace of mind.
Carrier Fraud Prevention - The Basics
A casual glance through a carrier’s paperwork isn’t enough to guarantee the safety of your product. If you want to protect your business from thieves you need to be proactive about not only collecting more than that, but also following up on the information you already routinely gather. But it doesn’t need to be a huge hassle. Adding these three simple things to the paperwork you already collect from new carriers will make a big difference.
Information to ask for:
A photocopy of the driver’s license
- This will make it easier for the police to track down the individual if you become a victim of theft.
The contact information for the carrier they work for
- Another layer of accountability in case something goes wrong.
- Don’t forget to find out who you’ll be speaking to and how they relate to your carrier.
Verifying that information
1) Google it!
Search for the company phone number you’re given.
Is there a website associated with that number? Browse the website, if one exists. Do they have a blog that stretches back for months? Years?
It takes effort to create a web presence that goes back for months or years – it’s unlikely a fraudulent carrier will go to that effort just to make the phone number look convincing. Also, if it’s an ongoing scam you might even see other inquiries into the legitimacy of the number in your results.
2) Search for the name of the person you’re hiring.
Do they have a Facebook or LinkedIn profile? Does their photo look like the individual you met? Websites like these can give you an insight into the person you’re hiring. If you see that they are listed as working for the carrier they say they work for then that gives you another piece of evidence supporting their legitimacy. Not finding anything isn’t necessarily a red flag; many people keep their online profiles private. There’s nothing wrong with that, but in that case, you should continue your effort into verifying the carrier’s identity.
It takes a lot of time and effort to build a fake persona online, and the likelihood of someone not existing on social media at all is slim in this day and age. If LinkedIn shows that they don’t work at the company they said they did anymore, or that they’ve never worked in the logistics industry at all, then you might be the target of carrier fraud.
3) Contact the freight carrier
Find the website of the company that the carrier you spoke to claims to work for. Check the contact information you were given against what they list on their website. If those numbers are different, you need to call the company, not the number you were given, and verify that the person actually works for them.
If you call the number you are given and it is fraudulent then the person who answers can just feed you meaningless reassurances. There is no doubt that they were prepared for your call. Their job will be to give you a false sense of security, which will sound exactly the same as honest reassurance from a real employer speaking to you on their personal cell phone number. You can’t know the difference unless you check with independent verification.
3) Call the freight carrier's references
Treat their references the same as you do their employer. Ask for more than just a number. Get their name and the company they work for. Call the company from the phone number on their website and verify that the person you spoke to works there. Alternately, if you were given that information by the person you are considering hiring then try calling the company the reference works for rather than using the number given to you. Your confidence is worth the effort of being put on hold while your call is redirected through the company.
References can also be the accomplices of scammers. If a thief gives you a number to call you should assume there is a plan in place that can stand up to at least a casual investigation on your part.
Intermediate Carrier Fraud Prevention
Now that you know the basics of protecting yourself from carrier fraud, consider taking these techniques to the next level by applying them to the more complex aspects of identity verification.
1) Examine all the carrier’s paperwork carefully
Look for different fonts in the paperwork. Watch for spelling mistakes. Make sure that the terminology used in the documentation is accurate. Errors like these are what you should be watching for in a forged document.
Verify the carrier’s DOT and/or MC number with FMCSA (Federal Motor Carrier Safety Administration). Not only can you confirm their information with FMSCA, you can also confirm that they have an active status using FMCSA’s SAFER website.
2) Verify the carrier's insurance
Don’t just look over their insurance information for evidence of forgery. Call the insurance agent using the same strategies that you already learned: search for the company and call using the number on their website, then ask to be redirected to their agent.
3) Stay in contact with the carrier
Insist on regular updates from the carrier and if anything seems off then don’t hesitate to react. Be sure to read our article on the five signs that you’re being targeted by a freight thief.
Final Steps to Protect Against Carrier Fraud
The hardest part of protecting yourself from freight carrier fraud is actually going through the steps of identity verification.
Consistency is key. Freight thefts aren’t going to happen when it’s convenient. In fact, they are most likely to occur on weekends or at the end of the day on a Friday. This gives cargo thieves more time to get away with their crime before it is reported. But they are relying on human error to get that extra time.
You need to be smarter than the potential thief, but you also need to work harder than they do.
Spending an hour of your time calling up companies and references might not be pleasant, but suffering a freight theft is far worse.
Don’t let anyone rush you or make you ignore your gut instinct. Be cautious and careful. Always follow the plan you laid out for confirming the safety of your freight, to the absolute best of your abilities.
It’s hard to stick with a system that you never want to need, but vigilance is essential. The goal of your carrier fraud prevention plan is to help you recognize potential thieves before they get their hands on your product.
Make your safety guidelines part of your routine. Train your employees to follow your guidelines as well. Make safety measures an everyday part of your business and stop freight carrier fraud before it happens.
Much of the information in this article was sourced from TIA’s Framework to Combat Fraud.