Double-brokering scam jumped 400% in the fourth quarter of 2022 from the same period the year before, according to Truckstop.
Double brokering is a scam that happens when a fraudster steals the identity and information of a legitimate carrier and books a load from a broker. Then, the fraudster posts the same load on a load board, acting as a broker, and finds another carrier to haul it. When the load is delivered, the fraudster charges the original broker for the service, as if they were the carrier, and collects the payment. Meanwhile, the actual carrier who delivered the load may not get paid or face legal issues if the load is damaged, lost, or stolen. Double brokering can cause serious losses and damages for both brokers and carriers in the trucking industry. In this article, we will explain how double brokering works, how to spot it, and how to avoid it.
How to Spot Double Brokering Scams
Double brokering scams can be hard to detect, especially if the fraudster is skilled and experienced in deceiving brokers and carriers. However, there are some red flags that can alert you to a possible double brokering scam. Here are some of them:
- Email address: If the broker or carrier who offers you a load uses an email address from a free service like Gmail or Yahoo instead of a professional domain name, that can be a sign of a double broker. A legitimate broker or carrier would have their own website and email address that matches their company name and authority. Nowadays, they would even have a domain that is almost the same as the authentic just a few letters difference.
- Phone number: If the phone number of the broker or carrier does not match with the one listed on the FMCSA website or they use multiple phone numbers to communicate with you, that can be another sign of a double broker. A legitimate broker or carrier would have a consistent and verifiable phone number that corresponds to their MC number and USDOT number.
- Blind shipment: If the broker or carrier does not disclose the identity of the shipper or the consignee to you, that can be a sign of a blind shipment. A blind shipment is when the broker or carrier hides the origin or destination of the load from you, so that you do not know who you are working for or delivering to. This can be a way for a double broker to prevent you from contacting the original shipper or consignee and finding out that they have subcontracted your load without their permission.
- Addresses: If the addresses on the bill of lading (BOL) and the rate confirmation (Rate Con) are different or they change them at the last minute without explanation, that can be a sign of a double broker. A legitimate broker or carrier would provide you with accurate and consistent addresses for the pickup and delivery locations of the load and would not alter them without a valid reason.
- Fonts: If the fonts on essential information in the Rate Con, such as the rate, payment terms, cancellation policy, or signature, are suspicious, that can be a sign of a double broker. A suspicious font can be one that is different from the rest of the document, smaller, larger, blurry, or distorted. This can indicate that the double broker has altered the document without authorization and changed some of the terms or conditions to their advantage
- Higher rate than market: If the rate offered by the broker or carrier is higher than the usual spot rate for the same lane, load, and equipment, that can be a sign of a double broker. A legitimate broker or carrier would offer a competitive and realistic rate that reflects the market conditions and the demand and supply of the freight. A double broker may offer a higher rate to attract more carriers and then take a cut from their payment or not pay them at all. Therefore, you should always compare the rates offered by different brokers and carriers and check the current spot rates on reliable sources like DAT or Truckstop.
These are some of the red flags that can help you spot double brokering scams. However, these are not conclusive and there may be other signs that are not listed here. Therefore, you should always be vigilant and cautious when dealing with unknown brokers and carriers and trust your instincts. If something sounds too good to be true, it probably is.
How to Recover from Double Brokering Scams
If you are a victim of a double brokering scam, you may not realize it until you try to charge the load from the customer or if you use a factoring company, they will inform you that the load has already been paid to another carrier. This can be a frustrating and stressful situation, as you may have lost your time, money, and reputation. However, there are some steps you can take to recover from a double brokering scam and prevent it from happening again. Here are some of them:
Contact the original broker or shipper
The first thing you should do is contact the original broker or shipper who hired the fraudster and explain the situation to them. Provide them with proof of your service, such as the BOL, Rate Con, GPS tracking, and photos of the load. Ask them to verify if they have authorized the fraudster to subcontract your load and if they have paid them for it. If they have not paid the fraudster, ask them to pay you directly for your service. If they have already paid the fraudster, ask them to file a claim against them and cooperate with you in pursuing legal action.
Contact a collection agency
If you cannot get paid by the original broker or shipper, or if they are unresponsive or uncooperative, you may need to contact a collection agency that specializes in recovering unpaid freight bills. One we recommend is Baxter Bailey. A collection agency can help you track down the fraudster and demand payment from them. They can also report them to credit bureaus and other authorities and take legal action if necessary. However, be aware that collection agencies may charge a fee or a percentage of the recovered amount for their service.
Report the fraudster
Another important step you should take is to report the fraudster to the relevant agencies and authorities that regulate and monitor the trucking industry. This can help prevent them from scamming other brokers and carriers and hold them accountable for their actions. Some of the agencies and authorities you can report to are:
- The Federal Motor Carrier Safety Administration is responsible for enforcing safety regulations and overseeing the registration and authority of brokers and carriers. You can file a complaint against the fraudster on their website or call their hotline at 1-888-DOT-SAFT (1-888-368-7238).
- The Transportation Intermediaries Association is a trade association that represents brokers and other intermediaries in the transportation industry. They have a code of ethics and a certification program that promote professionalism and integrity among their members. You can report the fraudster to their ethics committee or their watchdog program on their website or call their office at 703-299-5700.
- DAT Solutions is a leading provider of load boards, freight rates, and other services for brokers and carriers in the trucking industry. They have a security department that investigates fraud cases and alerts their users about potential scams. You can report the fraudster to their security team by emailing security@dat.com or calling 800-328-5329.
These are some of the steps you can take to recover from a double brokering scam and prevent it from happening again. Remember that double brokering scams can be avoided by doing your due diligence, watching out for red flags, having clear contracts, and monitoring your shipment status. By following these tips, you can protect yourself from double brokers and ensure that you deliver your loads safely and efficiently.
It is very important to do your due diligence before booking a load from a load board. You should check the background and reputation of the broker or carrier who offers you the load, verify their contact information and authority, and call the shipper directly to confirm their authorization. You should also have a step by step process when booking a load in your company that would decrease the chances of this happening. You should watch out for potential frauds, such as email addresses from free services, phone numbers that do not match with the FMCSA website, blind shipments, different addresses on the BOL and Rate Con, and suspicious fonts on essential information in the Rate Con. By following these tips, you can protect yourself from double brokers and ensure that you deliver your loads safely and efficiently.
