Trucking company

9 Flags of Double Brokerage

Which Motor Carriers Will Survive? Tips to Avoid Double Brokerage Fraud

What is a Double Brokering?

Double brokering occurs when a freight broker accepts a load from a shipper but instead of fulfilling it themselves, they outsource it to another broker or carrier. Sometimes, fraudulent intermediaries pose as genuine carriers or brokers and subcontract freight without shipper’s approval.

Double Brokers costs the logistics industry$500-$700 million annually

Source:TIA

Double Brokerage is deceitful and illegal. It can lead to several issues such as delayed payments, potential legal complications, and increased risk of fraud.

Motor carriers need to be aware of the common red flags of a double broker to avoid fraud and protect their businesses.

Double brokering becomes particularly deceptive when a fraudulent broker poses as a legitimate carrier. In these instances, the broker takes on the identity of a reputable trucking company to secure freight contracts directly from shippers. 

This scheme often involves these typical scenarios.

  1. Impersonating a Legitimate Carrier: Fraudulent brokers create false documents and online profiles, representing themselves as genuine carriers with their own fleet of trucks. They use these fake credentials to secure contracts from unsuspecting shippers.
  2. Stolen Carrier Information: Fraudulent brokers may steal or misuse the identity of a real carrier, including their USDOT number, insurance details, and safety ratings. Shippers or Genuine Brokers, unaware of the deception, contract these brokers, believing they are working directly with the reputable carrier.
  3. Fake Load Boards Listings: 

    Fraudsters post fake listings on load boards, presenting themselves as carriers with available trucks. Brokers, looking for available carriers, might unknowingly contract these fraudulent brokers, leading to double brokering.

  4. Forgery of Documentation: Deceptive brokers forge carrier documentation, such as insurance certificates and operating authority permits, to create an illusion of legitimacy. Other transportation intermediaries, relying on these documents, engage their services, unaware of the fraudulent activities.

When it comes to vetting brokers and avoiding double brokering, there are some key factors that you have to look at:

Vetting:

Business Longevity – How long the broker has been in business, and what is the credit score

Phone & Email Validation – Do the broker’s phone numbers and emails match to their corporate office contact information

DAT Directory – Just as brokers check carriers on Carrier 411, carriers can check brokers on SAFER or DAT DirectoryBusiness Address Verification – Cross-check brokers address using load boards directory and Google Maps to make sure it’s a real business location.

Vet brokers satellite office – many brokers work as agents under a much more massive brokerage, so verify if this is a legitimate satellite agency

Typical Red Flags of Double Brokerage

Red Flag 1: Suspicious Payment Terms. Double brokers might insist on cash payments or unconventional payment methods, avoiding traceable transactions.

Red Flag 2: Pressure Tactics: Double brokers might use high-pressure tactics to rush you into making quick decisions without giving you time to verify their credentials.

Red Flag 3: Call Center Background Noise.

Red Flag 4: Broker uses unofficial email like Gmail or a Cell Phones.

Red Flag 5: No credit score and no presence on a load board.

Red Flag 6: Unprofessional communication & poor communication, lack of industry knowledge, or unclear explanations about processes and services can indicate a fraudulent operation.

Red Flag 7: Too Good to Be True Rates. Double brokers may offer significantly higher rates than market standards. They might not negotiate and they might even rush to pickup a load. Unrealistic prices might indicate a scam.

Red Flag 8: Unverified MC Numbers: Ensure the broker’s Motor Carrier (MC) number is legitimate and matches the records of the Federal Motor Carrier Safety Administration (FMCSA).

Red Flag 9: Lack of documentation & poor documentation. Genuine brokers provide clear contracts, load confirmations, and invoices. If a broker is hesitant to provide proper documentation, it raises suspicions.

At Boston Transportation Solutions, we understand the challenges that trucking companies face in today’s complex logistics landscape. When the fraud is at all times high, we pay special attention to educating our students about all the possible pro-active measures they can take to not fail as a startup and succeed as a Pro!

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