Freight Fraud: Uncovering the Types of Scams and How to Prevent Them

The transportation industry is the backbone of commerce, ensuring goods move efficiently and securely. But with its growth comes a persistent and evolving threat: freight fraud.

Fraud in the trucking sector is not just an inconvenience—it’s a calculated and sophisticated attack on shippers, carriers, and the broader economy. As bad actors become more adept at exploiting vulnerabilities, businesses must stay ahead with vigilance, education, and proactive measures.

At S-2international, we understand the gravity of this issue and are committed to helping companies protect themselves. Below, we’ll break down the most common types of freight fraud, warning signs to watch for, and best practices for mitigating risk.

What is Freight Fraud?

Freight fraud, also known as trucking fraud, involves deceptive practices that undermine the integrity of the supply chain. These scams target shippers, freight brokers, and carriers, creating inefficiencies, financial loss, and reputational damage. Fraudsters leverage technology to forge documents, fake credentials, and manipulate transactions, making it harder to distinguish legitimate businesses from bad actors.

5 Common Types of Freight Fraud

Understanding how fraudsters operate is the first step in prevention. Here are some of the most common scams plaguing the industry:

#1. Double Brokering Scams

This type of fraud combines elements of impersonation and misrepresentation.  A fraudster accepts a load as a carrier, then re-posts the load to a load board and re-brokers it to another carrier.  In some cases, the fraudster may be a broker that re-broker’s freight without a co-broker agreement and without customer knowledge.

Double brokering is not legal and puts all involved in the load at risk.  The shipper and/or broker is unable to properly vet the actual carrier moving the load and loses visibility in transit.  In the most severe cases, the double-broker may disappear after they are paid by the shipper but never pays the actual carrier.  Furthermore, there are times in double-broker scenarios that freight is stolen.

This scam increases risk and, in many cases, causes significant financial harm.

#2. Fuel Advance Scams

Fraudulent carriers request fuel advances (prepaid fuds for fuel) after booking a load but never show up for pick up.

#3. Impersonation Fraud 

Fraudsters may pose as a legitimate carrier (Carrier to Shipper or Broker) or in other cases may pose as a legitimate shipper (Shipper to Carrier or Broker).  

Carrier impersonation:

• A person uses the MC/DOT number of a real carrier. 
• They accept a load from a broker or shipper, often sending falsified COI documents.
• They then may re-broker (double broker) the load to a legitimate carrier but pocket the payment.
• In some cases, they may physically steal the freight after pick up and disappear.

Shipper Impersonation:

• A fake shipper posts loads or contacts a broker, sometimes including real company names and locations.
• Often, the shipper is also posing as a carrier to have freight “awarded” to them by a broker or actual shipper.
• Once the broker books a carrier the “shipper” might:
  • Trick provide false delivery location to steal freight
  • Provide the real shipper/broker with actual delivery confirmation (the load picks up and delivers where it should) and receives payment as a “carrier” from the shipper/broker.  The broker that actually arranged the movement legally with the carrier, pays the carrier but is ghosted by the fake shipper and never receives payment

#4. Insurance Scams

Some bad actors provide falsified insurance certificates, making it seem as though cargo is fully covered. When damage or loss occurs, shippers realize too late that no real coverage exists, leaving them unprotected and without compensation.

#5. Identity Theft/Hijacked MC Number

Beyond traditional cargo theft, fraudsters use stolen credentials (MC number, insurance certificates, etc.) from a real carrier or broker to operate under false pretenses. The criminal will mimic a real carrier’s identity using spoofed websites, emails or phone numbers. They will reroute, double-broker or steal freight.

These scams are dangerous for the trucking industry and the shipping public.  Fraudulent activities violate FMCSA regulations, create liability and legal exposure for 3PLs, brokers, carriers, and shippers.  This adds significant cost to the supply chain.

Warning Signs: How to Spot Freight Fraud

Fraudsters thrive on deception, but businesses can stay ahead by recognizing key warning signs including but not limited to:

• Incomplete or Inconsistent Paperwork: Watch for missing licenses, altered certificates, or mismatched business details. 
• Unusual Payment Requests: Be cautious of requests for upfront payments, fuel advances, or sudden changes in banking details without proper verification.
• Requests for Sensitive Information: Fraudsters often ask for financial records or confidential data under false pretenses.  Always verify the requester.
• Unsolicited Offers or Contracts: Beware of unexpected business proposals from unfamiliar companies, especially if it seems too good to be true.
• Urgency: Beware of unusual urgency to book freight or someone’s willingness to significantly overpay.
• Inconsistent Contact Information: Look for discrepancies in addresses, phone numbers, or email domains (e.g., P.O. boxes vs. physical locations; a hyphen in a website address that doesn’t match the company website). 

How to Protect Your Business: Freight Fraud Prevention Checklist

With fraud tactics evolving, prevention requires a multi-layered approach. Implement these best practices to safeguard your operation:

Verify Every Partner and Customer

• Conduct thorough background checks on carriers, brokers, and customers.
• Confirm operating authority, Motor Carrier (MC) numbers, and safety records.
• Validate insurance coverage directly with providers to ensure authenticity.
• Employ an on-going monitoring system beyond your initial verification. This is particularly important with insurance fraud.
• Work with 3PLs and brokers that have documented vetting procedures.
• Verify potential customers/shippers, not just carriers and brokers.  
• Verify credit applications from customers.  Ensure emails match the company domain.  Call the number off of the website to confirm the person/position/request.

Strengthen Payment Security

• Use established payment platforms with multi-layer authentication.
• Require dual approval for payment changes or large transactions to prevent unauthorized fund transfers.
• Do not provide bank information to shippers prior to authentication of their company.

Enhance IT Security

• Protect digital systems with firewalls, encryption, and regular security audits.
• Stay updated on cybersecurity best practices to defend against online threats.
• Do not make key documents like authority, W-9, or insurance certificates readily available on your website.  Provide these only to those who have been verified.

Train Your Team

• Educate staff on common fraud tactics and red flags.
• Encourage a culture of vigilance and proactive reporting of suspicious activity.

Leverage Third-party Verification Tools

• Utilize industry tools like Highway, FreightValidate, Carrier 411, and SaferWeb to verify credentials and assess risk factors. These tools can uncover anomalies and some offer rating systems for their validated carriers and/or brokers.
• Build and maintain long-term, trusted relationships to minimize reliance on high-risk spot markets, unknown entities, and commoditized load boards.

Seek Out Alternative Sources of Information

• Social media groups and forums offer information from the “trenches.”. LinkedIn, Facebook, and Reddit all have communities and groups that can provide useful information and alerts to fraud incidents.
• Industry publications and websites like FreightWaves, Transport Topics, and Inbound Logistics are resources not only for the state of fraud in the industry, but they provide general industry information as well.  
• Sign up for newsletters and alerts—DAT Fraud Alerts, CargoNet Alerts, and FMCSA email updates, and companies like S-2 all provide important information.
• If you are a 3PL, broker, or carrier, join industry associations like the Transportation Intermediaries Association (TIA), National Association of Small Trucking Companies (NASTC), or Air Forwarders Association. These offer great networking opportunities and can keep you up-to-date on the latest industry happenings, including topics like freight fraud.

What to Do If You’ve Been Targeted

If you suspect freight fraud, act quickly to limit the damage:

1. Alert Your Network: Notify shippers, carriers, vetting sites, and financial institutions to prevent further losses and protect others.
2. Gather Documentation: Collect and preserve all related contracts, rate confirmations, bills of lading (BOLS), communications, and invoices for investigation.
3. Report the Fraud: Contact local law enforcement, federal agencies, and the Federal Motor Carrier Safety Administration (FMCSA).
4. Seek Legal Guidance: Consult an attorney experienced in transportation law for assistance.  This can help in navigating the legal process and to explore potential remedies.
5. Analyze and Reinforce: Conduct a thorough review of how the fraud occurred and strengthen internal controls and preventive measures.

Stay Ahead of Freight Fraud by Partnering with S-2

Fighting freight fraud takes diligence, collaboration, and trusted partnerships. At S-2international LLC, we are committed to transparency, security, and excellence in transportation management. Our vetted carrier network, industry-leading tools, and deep expertise ensure your freight moves safely and reliably—giving your business peace of mind.

Partner with a team that puts integrity first. Contact S-2 today to learn how we can support your transportation needs with confidence.

To learn more about working with us, contact our team today.