In today's digital age, where transactions occur at the click of a button, fraud and identity theft have become ever-present risks. The problem has gained significant momentum in the trucking industry in recent years as digital freight matching has left organizations more vulnerable to online fraud, and intense competition for shipments has resulted in expedited—and insufficient—background checks of businesses.
One of the most prevalent types of fraud and identity theft in the trucking industry is the unauthorized use of a legitimate motor carrier's assigned U.S. Department of Transportation (DOT) number. These unique numbers are issued by the Federal Motor Carrier Safety Administration (FMCSA) to monitor and regulate commercial motor vehicles. When unscrupulous individuals use these numbers, they not only harm legitimate trucking companies, but they deceive shippers, brokers and the authorities as well.
For legitimate trucking companies, these fraudulent practices can have profound effects, including, but not limited to:
Financial Losses – Carriers often suffer substantial financial losses due to fraud and identity theft. These losses may arise from non-payment issues and lost goods. And, if an accident occurs while an unauthorized carrier is operating under the company’s USDOT number, the legitimate carrier may be burdened with bogus insurance claims and legal expenses.
Compliance and Regulatory Issues – If a motor carrier's identity is stolen, it can lead to non-compliance with various industry regulations, fines and penalties, and negative Safety Measurement System (SMS) results.
Operational Disruptions – Dealing with the aftermath of fraud or identity theft can be time-consuming, which can distract from primary operations. Businesses may need to spend time investigating fraud, working with law enforcement and implementing new security measures.
Increased Operational Costs – Carriers may need to invest in additional safeguards, screening procedures and technology to protect against identity theft and fraudulent transactions. These costs can add up and affect the company’s bottom line.
Reputational Damage – Incidents of fraud can also inflict serious reputational damage. They can harm relationships with customers and partners who feel betrayed or deceived, even if the carrier was itself a victim.
To combat this invisible threat, trucking companies need to stay updated on new tactics used by perpetrators and watch closely for signs of identity theft.
An effective method for carriers to detect the unauthorized use of their USDOT number is to regularly log into their FMCSA SMS portal account with their assigned PINs and check SMS results. By logging into the FMCSA SMS portal, rather than using the public website, carriers can see more detailed information, including pending roadside inspections/accidents not yet visible to the public and their associated driver names and licenses. If there are inspections, drivers or accidents that don’t look familiar, the carrier’s USDOT number may have been compromised.
If identity theft is detected, swift action is key. FMCSA has prepared a bulletin listing the steps companies should take to minimize the damage, along with resources on how to prevent load brokerage fraud.
The rise of fraud and identity theft represents a major challenge for long-haul trucking companies. But, by understanding the risks and implementing prevention strategies, businesses can help protect their financial health, reputation and operational stability. Amidst this invisible threat, the power of awareness, preparedness and swift response cannot be underestimated.
