TIA Unveils Guide to Combat Cargo Fraud

This story appears in the April 21 print edition of Transport Topics.

TUCSON, Ariz. — The Transportation Intermediaries Association took a step to help brokers combat fraud by issuing a report that stresses preventing theft-related losses.

The “Framework to Combat Fraud” aims to counter cargo, financial and identity theft, prevent fraud and identify follow-up steps once a crime occurs. It was created by a task force and rolled out April 12 at TIA’s annual meeting here.

“Identity theft and other kinds of theft are on the rise,” Kari Dobrovolny, chief operating officer of Pioneer Transfer, based in Sioux City, Iowa, told Transport Topics. “Crooks are stealing carrier information, cargo or carrier payments by impersonating legitimate companies.

Dobrovolny, who headed one of TIA’s subcommittees that worked on the report, said the report aims to give TIA members guidelines and resources.

One prominent fraud case involved 300 carriers and brokers who were bilked out of $2.7 million by three men, all of whom were convicted and imprisoned in 2009. The men posed as brokers or carriers, or created fictitious companies on the Internet, to steal payments.

However, most theft and fraud goes unreported, Dobrovolny said, largely because of the difficulty in obtaining convictions. She said some cases that are solved are never brought to trial and that the location of theft and fraud often cannot be established, complicating possible law enforcement actions.

“Often, there is no one to report [fraud or theft] to because we can’t determine where it happened. So brokers and motor carriers don’t report it,” Dobrovolny said.

“Prevention is obviously the key here,” she continued. “The most important thing is to verify with whom we are doing business.” Dobrovolny added that current identity fraud efforts are generally focused more on consumers than on businesses.

TIA said it doesn’t have any comprehensive statistics on the extent of fraud and theft. However, one statistic cited at the meeting was that the location of one-third of cargo theft occurrences wasn’t specified or known when it was reported.

Recommended prevention steps for brokers before a load moves include closely reading insurance policies, verifying carrier paperwork and independently verifying carrier-supplied information.

To counter identity theft, the report urges verification of carriers’ information, looking particularly for words in different type fonts that could have been changed by a thief. Insisting that carriers maintain accurate records and that they monitor their own information also will help, and brokers can further protect themselves by not posting license or bond details on their own websites, the report said.

Other steps that were recommended include studying carriers’ safety information, determining how long they have been in business, initially limiting loads to prevent exposure to larger losses and obtaining fleet safety policies.

Driver data also should be checked, the report said, through license scanners, obtaining a thumbprint or receiving actual licensing or tax documents. Post-theft recommendations included acting quickly and knowing insurance policy terms and coverage.

The report also urged designating individuals and creating procedures to cope with incidents. Those procedures should include a complete list of contact information for theft or fraud incidents, including police, private investigators, federal agencies, fuel-card providers and information from shippers.

The report said brokers should write up a scripted statement with specific details to use after a theft occurs such as truck numbers, markings, manufacturer and vehicle identification numbers.

“This framework presents a compilation of best practices that TIA members and fraud task force participants have used to protect themselves,” said Geoff Turner, chairman of TIA’s board and CEO of Choptank Transport.

Michael Nervick, founder of logistics company AFN, who chaired the committee, said the group plans to continue developing its initial effort.

“We know that it is important to get ahead of the curve on an issue of such enormous importance,” Nervick said.

Other subcommittee chairs are Chris McLoughlin of C.H. Robinson Worldwide, Mark Boyer of Con-way Multimodal, James Lee of Choptank Transport and Dianna Whitby of H&M Bay.