Recognize These Scams Targeting Trucking Companies

• By Devin Partida
• Sep 22, 2021

Trucking companies face many hazards, from poor road conditions to inclement weather to mechanical failure. One less obvious but equally pressing threat facing this industry is fraud. Scams are an issue for any business, and they have become more common as companies have come to rely more heavily on digital technologies. Trucking businesses, which often deal in large paydays and may lack sufficient anti-fraud measures, are ideal targets.

Here are few common types of scams targeting trucking companies that these businesses should recognize.

1. DOT Impersonation

One of the most common ways scammers target trucking companies is by impersonating government officials, especially from the Department of Transportation (DOT). Scammers will often message companies or even show up in-person and ask for financial information or demand payment for a regulatory violation. Since these appear urgent, employees frequently fall for these scams. The DOT will never request financial information or related data through email, mail, text, phone or fax. Companies can also call or email the DOT to verify the validity of an interaction or request. Teaching employees these steps can prevent falling for these schemes.

2. Phishing

Phishing is a similar scam that takes place over the internet, most often email. Scammers will impersonate an official source like a government official, business partner or co-worker from another department to gain sensitive information. Business email compromise, a type of phishing, costs businesses more than $1.7 billion in 2019 alone. The best way to defend against phishing is to train employees on how to spot it. Phishing emails may contain spelling errors or come from an email with an unusual domain. Workers should also never give away personal information or passwords over email, regardless of the context.

3. Factoring Scams

Factoring, where trucking companies request advances on invoices, has become a major target for fraud as has grown increasingly popular. Scammers will send fraudulent advance invoices, either inflating the numbers of a real invoice or requesting payment for a service they will not provide. Now that advance invoices are common, they may not immediately stand out as suspicious. Trucking companies should always verify the legitimacy of their business partners before agreeing to send any money. Cross-checking suppliers, carriers and factoring companies with Better Business Bureau records and client reviews can help discover potential fraud cases.

4. Double Brokering

Double brokering, not to be confused with the perfectly legal co-brokering, is another common trucking scam. Carriers will agree to haul freight for a broker, then re-broker it to another carrier, putting both parties in a complicated financial situation. The fraudulent carrier will receive payment for no work while the real carrier and broker face billing issues, miscommunication and potential lawsuits. Like with factoring scams, trucking companies can prevent this type of fraud through thorough vetting. Companies should never do business with a carrier or broker without thoroughly investigating them first to verify their trustworthiness.

5. Repair Shop Impersonation

Repairs and maintenance can cost $15,000 annually per truck, making them an ideal target for scammers. Fraudsters often impersonate repair shops or tow services, sending a false invoice to a company for a repair that may not have happened. Often, they will target brokers, not carriers, making it more difficult to verify the repair’s validity. Once again, brokers should only work with researched, trusted carriers and vice versa. The responsibility for paying repair bills should also always fall to the carrier, not the broker, so brokers receiving these invoices should be suspicious.

Stay Safe From These Scams. While scams targeting trucking companies are prevalent, they are not unavoidable. When businesses and their employees know scammers’ tactics, they can spot potential fraud more easily. The secret to preventing many types of fraud is taking the time to ensure various parties’ validity. Researching companies and government agencies may take time, but it can prevent potential losses that could reach millions of dollars.