Double-Brokerage

Double-brokering frauds happen often. Around $100 million in losses go down the drain each year due to this fraudulent activity.

What are Double brokered loads?
The way a load gets completed is simple. A customer/shipper gives a load to a broker, the broker gives the load to the carrier, and after the carrier completes the load, he/she gets paid.

 

However, double brokered loads are when the original broker or carrier hands a load to a different broker/carrier, with the intention of never paying or paying less than the original value of the load. Double brokering is illegal since 2013.

Risks of Double Brokering

If you knowingly or being a victim of fraud complete a double brokered load, many consequences may
arise.
● Payment for the load may never come, or you get paid less than the value of the load
● Your MC carrier authority from the FMCSA may get revoked
● Insurance may not cover any claim or losses.

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The Following are some of the ways double brokering happens

Identity Theft

Identity theft is one of the main methods of double brokering. Someone gets a load from a genuine broker (Broker A) posing as a carrier, then they post the load online, pretending it to be
from another broker (Broker B) by stealing their identity, without broker B’s knowledge.
After an unsuspecting carrier completes this load, he reaches out to the broker B for the payment,
and (Broker B) replies that it was not their load. Carrier is left to fight with the shipper and
original broker A for the payment.


Collusion
A carrier is working with a fraud broker to cheat other carriers. In this situation a carrier gets a
load from an original broker (Broker A) and gives it to a fraud broker friend (Broker B). Broker
B posts the load online as their own load, with the intention to never pay or pay less than the
original amount. An unsuspecting carrier books the load with Broker B. Later this carrier gets paid less than what
they could have been paid if they had booked the load with the original Broker A.

Loads Handed Down the Ladder by carriers.
The original carrier receives the load from the broker. Instead of hauling it themselves, they hand
down the duty to another carrier to complete the load. What then happens is the original carrier
gets paid and they never pay the secondary carrier.

How to avoid getting caught in a fraud of double brokering?

Looking out for the small details can help to avoid them.


1. First of all, check the name of the carrier listed on the BOL. It should be your company’s name
on the BOL or the Broker’s Name as the carrier. If some other company’s name is listed on the
BOL, you should write down your own company’s name, driver’s name, and sign just to be on
the safe side stating that your company is the one that completed the load.


2. Second, check the email on the Rate Confirmation or in the notes to where invoices need to be sent to.
Fraudulent brokers may add “LLC” or “INC” in the email to make everything seem legitimate.
If taking a load for the first time from a certain broker, it will be very hard to catch fraudulent
activity. That is why working with our factoring company lowers the risk. We work with many of the
same brokers and have the correct invoicing emails on file. Do not send the POD’s directly, let us
send the PODs.


Incorrect-                                                                  
Mike@NTGFREIGHTLLC.COM  

Correct-

Mike@NTGFREIGHT.COM


Third, check the MC number. Sometimes you may want to do a load for a broker that you have
never seen before. By inputting the MC number into our system's credit check, you will find out
whether or not it’s worth taking the risk to try doing a load for a broker. If you do not check, you
may later find out that the broker pays after 3 months or even not at all. Also, check if the broker is an authorized broker, with a valid broker authority and a bond. Every broker must
have an active broker MC number to be the middleman between a customer and the trucking company.
https://safer.fmcsa.dot.gov/CompanySnapshot.aspx.

 

4. Fourth, Be cautious of loads that brokers give by calling you, especially if it is from someone
you have never done business with before. Even if he/she says they are from a reputable broker,
always call back at the number provided in Safer to make sure it is a valid load. If the load rate is
unusually high as compared to market rates, that may be a very large red flag.

5. Lastly, If you have been in the business for quite some time, you will begin creating
relationships with brokers. Continue hauling loads from reputable brokers with your experience.
You will feel safer in doing business with them, rather than hauling for unrelated, unreputable
brokers.

What to do if stuck in a Double brokerage Situation.

Contact your account manager today and they will assist you further. We may need to contact
the customer, the bond company, or even the collection agency. In this business, fraudulent
loads can be just around the corner. If you get stuck in a sticky situation, our account managers
will persistently work to get the payment for the carrier.