Every year, thousands of carriers end up with a load they had some questions about, that they ended up moving without getting sufficient answers. And quite often, those are the loads that end up being double brokered with inflated rates. When they inflate the rate, it is a predatory action, the scammers are taking against the trucking company.

To stop a double broker scam you have to understand how they work. The scammer needs a carrier side, that a legitimate broker will give a load to. And then a brokerage side that a legitimate carrier will move a load for. Say their carrier side gets a load from a legitimate brokerage for $1000. But instead of moving it themselves, they also have a separate DOT/MC for a brokerage side, they post that same load from their brokerage for $1300 or $1500, trying to get another carrier to move it, knowing they aren’t going to pay them. When the actual delivering carrier sends the paperwork to the scam brokerage that hired them, they in turn send the paperwork to the legitimate brokerage, with an invoice from the carrier side they believe they hired. And most of the time, they are taking a 3-5% discount to be paid quickpay, since they never know how long a specific scam will go.

By the time the actual delivering carrier realizes they aren’t getting paid, the double broker scam is already out of business and probably moved on to running the same tricks under a new authority. Many aren’t even located in the Western Hemisphere, much less the US address they’ve used to register their company. On top of that, in the last 5 years, instances of people using others paperwork to pull these double broker scams, has gone up well over 1000%.

So what can you do as a carrier, to shield yourself from a double broker scam?

First and foremost, have a plan for approving credit, and stick to it. That is the part of owning a trucking company most people don’t realize at first. If you own a trucking company, you have to extend credit and act like a bank, and float loans for brokers. That is the payment model for 95% of the trucking industry in the United States. So all the risk is with the carrier, hoping that the broker pays them. So make sure you have a procedure with set standards, that companies you are extending credit to meet.

5 Things to check

  1. Are they factorable? If your factoring company says they won’t factor their loads, that is because of something in the brokers past. You need to find out what that is and be comfortable with it or find some other broker to move a load for.
  2. Do the email addresses and phone numbers match up, with what is publicly out there. You should be able to find plenty of contact info on any freight brokerage through search or going directly to the FMCSA website. If someone has a different number or email address, have them explain it, then, without telling them, call the main number listed with the FMCSA for that broker and verify that the person using the contact details you are dealing with, is authorized to broker loads for that brokerage.
  3. Is the brokerage based in an empty field, a virtual office in the most expensive building in the southeastern United States, etc. Google their address and see where they are located. If it’s a church, or something else that just doesn’t add up, ask questions and move on if the answers are not 100% sufficient. On a double broker scam is, the location of the brokerage doesn’t matter at all to the scammer. They won’t ever be there, they won’t ever get mail, etc. They just use it to get the carrier to move the load, nothing more. Because when the scammer gets paid, its their carrier side.
  4. Does it make sense? If a broker is brand new, are they really getting a bunch of loads from fortune 500 companies and able to broker them out for much more than the larger brokerages? Doesn’t make sense does it?
  5. Does it seem too good to be true? Is it paying 2x the normal rate for an empty trailer move? Did they immediately agree to a pay bump, on a fair priced load? Let you control the amount for detention, etc?

Protect Yourself

When you actually move a load for a double broker scammer, 99% of the time, you are going to lose money. That’s just the way it is, they jacked up the rate and you figured everything off of that instead of the real rate. So how do you make sure to set yourself up to recover as much as possible, when you do get burned?

1-Going through a lot of this one currently, double brokered loads, that are turned into blind shipments, with redacted BOLS are very difficult to collect on.. The driver gets the real bol at the shipper, but the scammer sends over a “corrected” one, that lists no one. Any time someone gives you a blind shipment bol, it is imperative that you have your driver send you a copy of the original bol from the shipper, for your files. Never delete or throw it away until you are paid in full on the load. This should be standard practice.

2-Even more so, not deleting driver logs should be standard practice. ELDs have caused a bunch of bumps in the road, but as far as collecting on a load you did that was double brokered, there is nothing more valuable than your ELD download/driver logs. Legally they have to stay in the system 6 months, but the standard operating procedure you should inact, is to keep the logs for any load you haven’t been paid on, until you are paid on them, regardless of it being 3 or 13 months.

Set your companies standard to checking as many points as you can, believe your factor, and call and actually talk to references, if the references have 1 truck and no inspections, take them with a grain of salt. The story all has to make sense!

About the author 

Bill Ivey operates https://brokerwatchlist.com and has 15 years uncovering freight broker scams, and helping carriers recover unpaid freight bills.