In June 2018, two United States Senators, Olympia Snowe (R-Maine) and Amy Klobuchar (D-Minn), presented a law calling it the Motor Carrier Protection Act that would help reduce the amount of fraud by dishonest freight broker agents.

It is not uncommon that motor carrier operators become a victim of dishonest behavior from both freight forwarders and brokers that result in financial fraud. Senator Snowe believes revising the existing trucking regulations, this law will allow truck operators to have more peace of mind that they will receive the payment for a job that has been completed.

In a mutual statement, both Snowe and Klobuchar state the new bill would do the following:

• A growth in a broker’s bond up to $100,000 from $10,000. This bond will be applied to freight forwarders.
• Create strict requirements for those looking for broker or forwarder authority.
• Reinforce consequences for the number of violations regarding broker regulations.
• Create a yearly registration requirement to renew forwarder or broker authority; as well as require the Federal
• Motor Carrier Safety Administration to retract authority if an authority is not renewed.
• Create more strict regulations on bond providers and how bonds are managed.
• Carriers must have a broker’s or forwarder’s license to put the shipment on another carrier for reimbursement.
• The need for different registration numbers for each authority and the authority must be in writing.

Common Types of Fraud in the Trucking Industry

As a trucker in the trucking industry, you do not have to become a victim of theft or fraud. Being aware is the first step in preventing fraud or theft. Below are the most common types of fraud in the trucking industry:

1. Cargo Theft – Cargo theft is often the most common form of fraud. It is a multi-billion-dollar business which occurs when a truck or container is loading or unloading. CargoNet released the Q3 2014 United States Theft Report and the top findings included:

• 214 incidents of cargo theft were reported which is 22% less than Q3 in 2013 and 28% higher than Q2 in 2014.
• The most expensive was $15 million theft from processors.
• Washington State suffered cargo theft from 0% in Q3 of 2013 to 7% in Q3 of 2014.
• Truck stops are the most common location for robberies reported in Q3 of 2014.

2. Advance Fuel Fraud – Also known as “double brokering scam,” the trucking industry representatives state advanced fuel fraud is a widespread crime which is difficult to catch and prosecute. Fuel fraud occurs when a person acts as a carrier and accepts the shipment from a naïve freight broker agent to freight agent. Once receiving the load, they send the cargo to another carrier often at a higher price than what a customer has agreed to pay. These frauds are often hard to prosecute because they alter documents to convince the victim they are from a legit logistics company. Once the load has been picked up, the scammer faxes the documentation to the broker requesting fuel advance for the load. They then receive the money and disappear with their payment and not paying the carrier. The loss of funds can range anywhere from $500 to $2,000, and it quickly adds up as they continue to con individuals by using a different name, phone number, and fake paperwork.

Red Flags of a Dishonest Freight Broker

Do not become a victim of a dishonest freight broker. Some red flags can pinpoint a load is a scam. These red flags can include:

• Rates too high or too low. – If a scammer is acting as a carrier they may accept a load that is going for less than an average price to lure the broker or agent into taking a deal. Also, scammers may offer more money than what a broker has originally agreed to pay to encourage the carrier to accept the deal and not ask as many questions. Keep in mind, if the rate seems “too good to be true,” it probably is. Therefore, ask questions to ensure you know who you are doing business with, and they are a legit logistics company.
• Planned Timing – Fuel advance scams typically happen later in the week or towards the end of the day. This is because some scammers believe that freight brokers or carriers do not think through the possibility of a load not being covered towards the end of the day or when the week is ending. Scammers like to believe truck drivers do not have money and the load will not be delivered on a timely basis unless a fuel advance is given. So, keep in mind anytime someone is trying to rush a load, slow down and think the process through to ensure you are not becoming a victim of a dishonest broker.
• Unknown phone numbers. – Scammers who are not from a representative or legitimate company will give paperwork that looks legit; however, look closely, often the phone number listed is not registered to an actual company. While it is not uncommon to have a different number than what is disclosed for a company’s office phone – phone numbers should still raise a red flag as well as a reminder to complete extra steps before moving forward with a deal.

Precautionary Steps for Fuel Advance

Before allowing a fuel advance read below for a few precautionary steps. These steps may seem tedious, but it can prevent fraud.

• Inspect the FMCSA’s Safety and Fitness Electronic Records (SAFER) system to ensure the DOT/MC number is the same as what is listed from the carrier.
• Confirm any phone numbers provided by the carrier matches what is listed on the DOT registration. Along with the phone number, the address and fax number should match. If it does not match, contact the carrier for correct contact information.
• TIA members should check with the TIA WatchDog website to research any complaints made against the carrier.

Unfortunately, as a business owner, we must watch out for scammers at all angles. If you own a business long enough, it is likely someone will try to scam you. If a deal feels too good to be true, it often is. Before signing an agreement, listen to your gut and if the agreement does not seem right, proceed with caution to not only protect yourself but your business and the loss of money.