Fraud and Identity Theft In the Trucking Industry

Most people consider identity theft to be a personal issue. Yet this occurrence can affect businesses too, often with the intention of committing fraud. Within the trucking industry, criminals may pretend to be a broker or steal a motor carrier’s USDOT number.

In one increasingly common scenario, a fraudster takes on the trucking company’s identity and uses the stolen USDOT number to post the need for loads. They accept payment for the loads but never compensate the driver who carried out the task. The frustrated driver then reports the legitimate business for fraudulent, illegal practices.

Understand how this happens and what you can do as a trucking company.

How Identity Theft Against Freight & Trucking Companies Occurs

The Federal Motor Carrier Safety Association (FMCSA) issues a U.S. Department of Transportation (USDOT) number to a trucking company to track the performance, shipments and behaviors of all registered trucking companies and brokers.

In more recent years, the FMCSA introduced a system of digital freight matching. Their background check process was also streamlined when the COVID-19 pandemic increased demand for ecommerce and contributed to more goods being shipped.

The FMCSA requires all trucking and freight companies to update their Motor Carrier Identification Report (MCS-150) every two years, revising information about drivers monitored and mileage traveled. Entities can do this online with a PIN provided by the FMCSA’s SAFER site or have the option to make updates by mail or fax.

When completing this task, carriers may discover that their information has been altered, uncover that someone requested a PIN on behalf of their business, or learn that someone submitted paperwork with their letterhead.

Further complicating this scenario, the FMCSA started requesting that trucking and freight companies provide copies of their commercial driver’s licenses (CDLs) to verify their identifies. Scammers posing as brokers also ask for copies of a carrier’s CDLs before taking on a load. With this information, the scammer uses the copied CDLs to submit a paper MCS-150 application with the legitimate company’s name and information.

Effects of Fraud and Identity Theft on Trucking Companies

These schemes can majorly impact the finances and reputation of trucking companies. Issues arising from identity theft and fraud include:

  • Drivers do not receive payment for the loads and goods transported.
  • Trucking companies are blamed and expected to take the financial hit when the scammer using their USDOT number gets into an accident.
  • Fines are issued for violating industry regulations.
  • Trucking companies receive a negative Safety Measurement System (SMS) reputation.
  • Time and resources are allocated toward investigating claims of fraud with law enforcement.
  • Costs increase to screen drivers and put additional safety and fraud detection measures in place.
  • Relationships with drivers, brokers and vendors become damaged.

What Your Company Can Do

Before your trucking business becomes a victim of identity theft:

  • Make sure your company routinely logs into the FMCSA SMS portal with your assigned PIN. The portal provides information on all associated drivers, licenses, accidents and inspections. Review this information for inaccuracies.
  • If you spot signs of identity theft, follow the FMCSA’s procedure for reporting fraud.
  • Start to develop long-term relationships with brokers, rather than relying on load boards for drivers to haul your shipments.
  • As a broker or carrier, always confirm the contact information of the partnering entity and check this information against their FMCSA or SAFER listing. Also make sure their insurance certificate is up to date.

Make sure your trucking or freight company is adequately insured, including against accidents, stolen shipments and to recover from reputational damage. Contact HUB/Ion Insurance to update your suite of commercial policies today.