In recent months, there has been a surge in scammers impersonating freight companies to engage in double brokering scams. These schemes pose significant business risks, from financial losses to insurance cancellations.
Double brokering scams occur when fraudsters impersonate legitimate transportation companies to bid on shipment contracts. Once they secure the bid, they subcontract the job to less reliable carriers at a lower price, pocketing the difference. This leaves the subcontracted carrier unpaid and risks nullifying insurance coverage for the shipment, a major concern for the businesses involved.
According to a report by threat researchers at Cloudflare, instances of double brokering have increased in 2024. In one example, a Fortune 500 food and beverage company experienced around 10 such incidents per month. Cloudflare attributed this rise to the large number of transportation companies available to impersonate, particularly those without websites, making it easy for scammers to create fake sites and conduct fraudulent transactions.
How the Scam Works
Scammers monitor freight boards for shipment postings and pose as legitimate carriers to bid on the job. After securing the contract, they repost the shipment on other freight boards, offering it to carriers at a lower price. The scammer profits from the price difference, while the legitimate carrier is left unpaid.
Legitimate freight brokers typically help businesses find suitable carriers for specific shipments based on price, load size, or delivery timeframe. However, these double brokering scams can have devastating consequences. If the fraudulent carrier mishandles or loses the shipment, it can lead to damaged goods, delivery delays, and reputational harm for the business, all while insurance coverage may be voided.
Shippers and Carriers: Both at Risk
Not only are shippers at risk, but legitimate carriers can also fall victim to this scam. Scammers may repost the load at a higher price to convince a real carrier to take on the job. However, when payment is due, the scammers vanish, leaving the carrier without compensation.
Protecting Against Double Brokering Scams
To avoid falling prey to these scams, businesses should adopt strong defenses similar to those used against other business email compromise (BEC) attacks. Here are a few tips:
- Verify the Legitimacy of Contacts: Always double-check the legitimacy of the freight brokers or carriers reaching out, especially by inspecting domain names. Scammers often create fake domains by adding names like “LLC” or “INC” to a legitimate company.
- Conduct Due Diligence: Carriers should verify if a load has been reposted, especially if the price seems unusually low. If there are discrepancies in the Bill of Lading, such as different carrier or broker names, it’s essential to ask questions before accepting the shipment.
In a world where shipping reliability is critical, don’t let scammers derail your business. Stay vigilant and safeguard your operations. Call us at (407) 995-6766 or CLICK HERE to schedule your FREE Discovery Call, and learn how to protect your company from double brokering scams and other Cybersecurity threats!
