Recent conversations with Auto Dealers have had me thinking about car shipping fraud as it relates to commercial accounts. Fraud risk is annoying at best. We all know it exists as we try to maneuver in and out of our shipping transactions, watching our backs at every juncture. That often times is not enough. The target is ALWAYS at an exponential disadvantage as the fraudsters become ever more creative in their scams and know the exact plan from the beginning – WE DON’T.

There are always normal concerns when offering a load to a carrier, whether you are a broker, or the owner of the shipment. Is this carrier an ongoing concern? Does this carrier have a verifiable reputation in the auto transport industry? Is this carrier properly licensed with the US Department of Transportation? Does this carrier have a proper MC/ haul for hire Authority registration (or leased to another company that does)? Does this carrier have verifiable cargo insurance? You should ALWAYS be able to answer YES to every one of those questions. If you cannot, you are entering dangerous waters. If your freight is offered and accepted by a carrier without proper cargo insurance, it is not hard to imagine the risk you have. IF you offer freight to a company that is not properly registered, that is stopped in route for inspection/ registration review, they will be impounded, and so will your freight. You won’t lose your freight but reclaiming your shipment and getting it delivered as intended, can be quite time consuming and cumbersome. It isn’t that hard to avoid the above, basic pitfalls with the information technology available today.  

As a dealer manager, I always believed that I knew who I was dealing with.  As a transporter for the next 18 years there were often times we couldn’t get to a client’s shipment on the other side of the Country in a timely manner.  We would delegate some of those shipments to other carriers as we picked up the slack for them in the region we were loading.  What happens when one of those carriers or brokers turns out to be a potential scammer? 

THE DOUBLE BROKER SCAM BROKEN DOWN – A well-meaning carrier or broker offers your shipment to Party A for fulfillment to your dealership for say, $1000.  PARTY A THEN goes and promises PARTY B $1300 to do the job.  PARTY B fulfills the order and submits paperwork to PARTY A (Party B has no idea Party A is not the originator of the shipment).  PARTY A submits paperwork to shipper, receiving the $1000 never having done any of the work and then never pays PARTY B.  PARTY B is now left to go after PARTY A – who intentionally scammed everyone and is probably MIA after doing this to 200 others over a 60 day period.  What happens?  Well, transportation law says that if Party B can prove they did the work, with signed bill of lading and were scammed – The owner of the freight can be held liable to PAY THE BILL AGAIN to Company B.  YOU then pay it a second time and take it up with your original broker or carrier who are most likely not covered for the reason of fraud- SO, pay it again and let it go, and or sue the carrier/broker, who probably won’t be held liable as they were also defrauded by the perpetrator.  Our Sister Company, Mid America Transport LLC learned this lesson the hard way, TWICE.  Once with Caterpillar who paid the $15,000 a second time, and with a fake company out of Denver Colorado, by a man named Alex Skorev holding himself out to be an auto wholesaler.  He defrauded several transport companies to the tune of $300,000 and fled for Mexico.  He was later jailed for further fraud in Florida, released and filed bankruptcy, nullifying any and all open judgements against him.

HOW TO AVOID A DOUBLE BROKER SCAM As stated earlier, we often can’t get ahead of a targeted scam.  There are however many things we can do to help ourselves if we find ourselves in the middle of a scam, if not outright prevent them by our processes.  Scammers are always on the lookout for certain conditions that meet the criteria for their scam.  If those criteria do not exist, they will move along to other opportunities, and you will never know it.

1. Be very vigilant who has access and or possession of your vehicle releases.  Do you have an accountable chain of custody for your gate passes?
2. If you are dealer trading a unit or buying a unit from another dealer through an OVE type platform, request that dealer acquires a copy of carrier’s driver’s license in addition to the vehicle release at pick up.  As a carrier, I can tell you firsthand the MAJORITY of car dealerships do not request a copy of driver license and sometimes not even the release if I could provide the last 6 or 8 of the VIN.
3. If shipping one out, always get a copy of the driver’s license from person or transport company who picks up the vehicle from your dealership.  Asking for a copy at delivery is unheard of, won’t be looked upon kindly, but a good idea.
4. Keep in mind, the carrier/ person standing in front of you MIGHT also be an innocent party to a double broker scam.  Whether shipping out or receiving in, ask the driver “Who did you receive this order from”?  That answer should match the company YOU gave the order to. 
5. Arrange for your carrier or broker to notify you of the company picking up the vehicle for transport, if not them.  If your broker vetted and dispatched the vehicle to Company 123, and Company ABC shows up – WHO ARE THEY?  WHEY are THEY here?  Has THIS company been properly vetted?  Flags should pop up.  It is possible a dispatch company received the order and passed it to a differently named carrier – OK, BUT WE NEED TO KNOW THAT in order to properly VET THAT CARRIER (Think registration and cargo insurance).
6. YOU CONTROL THE MONEY.  PAY THE CARRIER AT DELIVERY if possible.  If you are in the middle of a double broker scam, you will be paying the correct party when paying the carrier at delivery.  There will most likely be a disagreement on the rate, but you can work that out.  The carrier should be glad you both caught it.  The car hauler will receive more than ZERO, and you just saved your company from being dragged into a potential suit or collection from the scammed carrier.  By paying a carrier COD potential double brokering scammers are locked out of the money.  They will be gone FAST once found out and will likely avoid attempting their scheme in that shipment from the beginning.  If it is a brokered shipment, request the broker take their fee separately as you wish to pay the carrier with a company check at the time of delivery. This one practice alone will nearly eliminate you from falling victim to a double brokering scam, or at least having it cost you money.  Some brokers will not be very accepting of this structure as pure rate transparency as a consequence.