Spotting Freight Broker Scams: The Carrier Vetting Trap

As the logistics industry evolves, so do freight scammers. Freight schemes are getting more intricate and harder to recognize, leading to substantial financial and reputational losses for brokers and carriers alike. That’s why staying informed about both existing and new scams is crucial for anyone in the logistics sector aiming to safeguard their operations and finances.

To highlight one of the latest schemes, we interviewed Alex Winston, the president of Expedite All and the Godfather of STL with a rich background in law. Alex shared the experience of one of Expedite All’s carriers, who encountered a new freight scheme we have dubbed "the carrier vetting trap."

The New Scam Scheme Unveiled

So, what is "the carrier vetting trap?" Here’s a detailed breakdown of how this scheme works:

Broker Hires a Carrier:

The scam begins with the broker hiring a carrier for a load, establishing a seemingly legitimate business relationship.

Carrier Delivers the Load:

The carrier successfully delivers the load, fulfilling its part of the contract.

Broker Refuses Payment:

Instead of paying the carrier, the broker demands that the carrier registers for a carrier vetting platform before any payment is processed.

Costly Vetting Platform:

The vetting platform requires the carrier to pay hundreds of dollars per month (the carrier in Alex’s story was told to be charged $300 per month and $50 per truck), adding an unexpected and significant expense.

Hidden Ownership:

The broker’s owner also owns the vetting platform and has taken measures to obscure this connection, creating a conflict of interest and further exploiting the carrier.

Red Flags to Watch Out For

Are there any red flags to watch out for to avoid getting caught in "the carrier vetting trap?" Sure! Here they are:  

• Paying to Be Trusted

Carriers should not have to pay for vetting services. Legitimate vetting platforms provide value to brokers, who typically bear the cost. If a platform charges carriers, it’s a major red flag. Vetting should be a tool for brokers to ensure they work with reliable carriers, not a revenue source extracted from the carriers.

• Timing of the Vetting Process

Vetting should occur before the load is delivered, not after. Proper vetting involves verifying the carrier's credentials and reliability upfront to ensure the safe and timely delivery of goods. If a broker demands vetting after delivery, it’s likely a scam. This tactic is used to trap carriers into paying unnecessary fees.

• Unknown Vetting Platforms

Several vetting platforms are recognized in the industry for their reliability and trustworthiness. Stick to well-known and reputable platforms like Carrier Assure Inc., Highway, MyCarrierPortal, and RMIS. Using unknown or obscure platforms can expose carriers to fraud. It is always a good idea to research and verify the credibility of any vetting service before committing to it.

Protecting Yourself from Scams

Informed means protected. Here are several things to keep in mind to protect yourself from scammers’ actions.  

Due Diligence

Research and verify the legitimacy of brokers and vetting platforms before entering into any agreements. This includes checking reviews, industry reputation, and any affiliations with recognized organizations. A little research upfront can save significant trouble later.

Signs of a Scam

Common indicators of fraudulent activities include requests for unexpected fees, especially for vetting services, and demands for payment post-load delivery. Be wary of brokers pushing unknown vetting platforms or those with hidden ownership structures.

Why Expedite All is a Great Alternative

At Expedite All, we pride ourselves on our thorough vetting protocol. We know our drivers and carriers personally, have their driver’s licenses on file and trust them to deliver loads reliably. These are the drivers and small fleet companies with whom we have established relationships over the years, ensuring trust and accountability in our operations. We guarantee 100% protection against fraudulent brokers, allowing you to focus on your core business while we handle your logistics. 

Conclusion

As freight scams, like the carrier vetting trap, become increasingly sophisticated, recognizing red flags, such as paying for vetting services, the timing of vetting, and unknown platforms, is essential to avoid falling victim. Staying vigilant and informed, as well as sharing experiences and spreading awareness, is key to protecting your business and the logistics community from both existing and new fraudulent schemes. 

If you are looking for the ultimate anti-fraud protection, consider partnering with Expedite All. Our rigorous vetting protocols and established relationships with trusted drivers and carriers ensure your loads are in safe hands.