Customer Fraud Prevention #3: How to Combat Fraudsters
Customer Fraud Prevention #3: How to Combat Fraudsters
Three Steps to Combatting Fraudsters Once and For All
Alright, so today brings us to our 3rd and Final topic in our customer fraud prevention series. We started this journey by discussing the different types of freight fraud, in the second one we talked about how to identify certain types of fraud associated with double brokering, and today we’re going to close out our series by discussing how to combat fraudsters once and for all.
Step One: Setting Accountability Standards
So if you haven’t already done this, the first thing you can do is set accountability standards both internally and externally. Prevention only goes so far if your broker or provider is doing a good job vetting carriers, but you’re not, and vice versa.
Internal Accountability Standards
Okay, let’s start with the internal standards. Upon arrival, make a copy of the drivers CAB card and/or driver’s license. Make sure these copies are filed in a secure location to protect the drivers identity. Next, photograph, capture on video surveillance or visually check that the MC and/or DOT number and trucking companies name on the side of the truck matches the one provided to you ahead of time by your broker. Use extra caution when loading a carrier that has makeshift or no information visible on the outside of their motor vehicle.
Make sure to always assign unique pickup numbers and get drivers to authenticate once onsite. Certain shippers have notoriously been targeted based off there rural location and/or unique product. Information such as loading times, price, commodity, and destination can easily be recovered by bad actors and used fraudulently. So verifying pick up or PO numbers and not just confirming a consignee or commodity is important. Certain geofencing visibility software can aid in combating some of these fraudsters.
Finally for internal standards, use trailer seals. Depending on the value of your shipment or your level of exposure to fraud you may want to consider a more heavy duty trailer seal such as a metal, cable or high security lock seal.
External Accountability Standards
Those are some of the internal accountability standards you can take. Now let’s talk about some of the external ones, starting with setting firm carrier requirements.
Certain parts of the country, such as California and Illinois, are notorious for fraud registration hotspots. Having a continuous authority minimum such as 1-2 years in fraud heavy locations, and a minimum requirement of 6 months, regardless of where the carrier is registered, may limit your carrier pool but will greatly decrease your exposure.
Next, require load tracking. Arguably speaking, visibility in today’s age has become one of the most important differentiators in the transportation sector. Companies like project44, MacroPoint, FourKites, and Trucker Tools are some of the leading visibility providers currently in the market. As a broker, utilizing visibility software should be just as common as having a TMS or CRM system. Furthermore, the exchange in tracking information has become relatively seamless through EDI and API integrations, as well as custom visibility portals and AI updates. And while no tracking solution is perfect, adding a level of security and visibility to your operation is never a bad thing.
Keeping on the external accountability standards, what about key management involvement? When was the last time you jumped on a call with a handful of key players at your providers organization to discuss their fraud and security protocols and how they’re striving to keep your freight safe? If it’s been a while or never at all, now’s the time to get something on the books (Hint: If there’s any type of hesitation on your providers behalf, they probably are not doing enough ????).
Finally, inspect what you expect. Periodic carrier audits of insurance certificates, authority tenure documentation, and safety score verification is a responsible way to make sure the agreed upon standards set between you and your broker are being met.
Step Two: Leveraging Your Broker’s Resources
The second step: Leveraging your broker’s resources. So, we already talked about different visibility platforms you can take advantage of through your provider, and how different types of integrations can automate updates. Now, let’s talk about utilizing your broker’s internal network.
On average, there are an estimated 50k-100k duplicate or fake loads posted daily to public load boards. Mass email and TMS blasts to dozens, or in some cases hundreds, of brokers can artificially inflate market rates, creating a false sense of purchasing power for shippers. In today’s market, it’s not necessarily about the size of your network, but more about the consistency of your network when it comes to keeping bad actors out and good ones busy. I would suggest asking your current provider what technology and resources they utilize to keep there freight loaded on reputable carriers already within their established network.
Digital freight matching software such as Parade has only made this easier for those who choose to take advantage of this type of technology. Technology which can sync directly with carrier monitoring software. Companies like Highway and RMIS have sophisticated algorithms, as well as customizable safety standards, that help keep bad actors out. They also continually monitor internal networks so if safety standards ever become unsatisfactory, automation immediately removes there active status. From tracking IP addresses to confirming ELD footprints, when it comes to safety and compliance, integration and adoption of carrier monitoring software is a must.
Step Three: Team Education
Alright, so we’ve covered accountability standards and some of your brokers’ resources to utilize. Now, let’s finish it off by talking about team education.
Unfortunately, bad actors are always looking for new deceptive ways to commit fraud. And while I don’t have the statistics in front of me, I believe the mass majority of fraudulent activity that takes place in transportation is preventable through heightened awareness alone. Simply knowing what to look for can end up saving any organization countless dollars. And the best part is… it doesn’t cost a dime.
Hopefully, your current broker or provider has taken an advisory stance on the situation and is providing relevant content regularly to help you keep your organization safe. – What about just knowing what to look for? This can be a developed skill, just as a skilled carpenter may notice a small imperfection in a piece of wood that the Average Joe may never spot. Asking the right question at the right time, or knowing what rock to look under when suspicion arises, makes a world of difference.
Finally, get buy-in from the top down. It’s not enough for just one person to understand how to combat fraud and spot bad actors, but you need buy-in from all parties involved in the decision making process. This can, and in most cases will, be challenging. However, making sure that everyone in your department understands the severity of freight fraud and cargo theft in our current environment will only add to the layers of protection surrounding your organization.
So in conclusion, while fraud is a very real concern, it is highly preventable. The steps we discussed today to combat fraudsters involve: setting both internal and external accountability standards, taking full advantage of your current advisor’s tech stack and internal network, and educating your team on new and current ways bad actors are committing fraud. I hope this 3-part series has been both applicable and educational. Make sure to check out the comment section for relevant resources to help you stay fraud-free.
Thanks for doing your part in the fight against fraud and feel free to reach out if you have any questions.