Imagine a scenario where a freight broker submits paperwork to a client for payment, only to discover, to their surprise, that the load was never delivered. Even more surprising, the load never even picked up! Adding to the nightmare, the freight broker had already sent payment to the supposed “carrier” via quickpay.
This is part of a new and emerging scam in the industry. Typically, it unfolds as follows: Scammers pose as freight shippers, reaching out to unsuspecting freight brokers. The fake shipper initiates communication with seemingly legitimate questions and inquiries, such as the freight broker's shipping capabilities within specific areas or routes, their capacity and capability, and modes of transfer. Once the conversation is established, the fake shipper will present the broker with an “opportunity” and once the freight broker agrees, the fake shipper will send a confirmation, “hiring” the freight broker to transport the load.
The success of this scam hinges on a crucial factor: the freight broker taking to post the load on the loadboard. From there, the fake shipper will pose as a carrier, calling on the very same load that they assigned to the freight broker. The fake shipper/carrier will book the load, and provide fake updates to the broker during the duration of the transit, as well as forged paperwork, showing pick up times, delivery times and signature, etc.
Finally, the scam ends with the fake carrier invoicing the freight broker using quick pay. The freight then bills the client, and awaits 30-50 days for the check, as can be the norm for shipper payments.
By the time the freight broker realizes they have been duped, and that there will be no payment, the fake shipper has severed all communication lines and moved on to the next victim, having effectively swindled money from the freight broker for a job that never existed in the first place.
As disturbing as this may seem, this scam is not impossible to sniff out. A freight broker must do the following:
1. Exercise Reasonable Suspicion:
With the state of the industry, it is unlikely that shippers are reaching out directly to freight brokers. While exceptions do happen, such instances are rare.
2. Be cautious of Foreign presence in a predominantly American shipping industry
Second, as funny as this may sound, but watch out for accents. Freight movements in the US, as largely coordinated by American operators. There are expectations of course. However, and with all the respect to the hardworking eastern European and Indian carriers, the scams in our industry tend to stem from those particular regions and demographics.
3. Vet the carrier
Watch who you hire. With a vast array of tools available to the freight broker, there is no excuse to hire a scam artist. When you hire a legitimate carrier, even if you are dealing with a fake shipper tendering a non-existent load, in the worst case scenario it may cost you a Truck Order Not Used, instead of thousands of dollars, as a real carrier will alert you to the fact no such load exists.
4. Shipper and Consignee Contacts
Also, verify paperwork from the carrier. If you are working with a shipper for the first time, insist on having a point of contact at both pick up and delivery locations. A quick phone call will allow you to verify if the load did in fact pick up, as well as if the paperwork presented to you by the carrier matches with what the shipper has on file.
How does this affect factoring and carrier companies? Well, for one booking a ghost shipment, even with a legitimate broker, can cost time, fuel and hours. For factoring companies, the risk is even greater, especially if the factoring company is factoring for their broker clients. In this particular scam mentioned, the factoring company will be the one left holding the bag.
