The International Factoring Association recently posted their Top Commercial Factor Articles of 2023. “Does Your Factoring Software Protect Carriers from Rate Sheet Scams” article written by WinFactor CEO Mike Kingham, was selected as one of the top ones. The article discusses the ways Factors can use software to protect themselves from rate sheet scams. The article discusses a fraudulent scheme in the freight industry known as altered rate sheet confirmation fraud. This scam involves a fraudster posing as a legitimate broker by manipulating rate sheet confirmations to deceive carrier companies. The process starts with a legitimate load contracted through an intermediary like a load board. The scammer, using a falsified Federal Motor Carriers Safety Administration number, initially acts as a carrier. Later, they pose as a broker by stealing a real brokerage company’s identity.
The critical element of this fraud is a modified rate sheet confirmation that displays a reputable broker’s name but contains the scammer’s contact details. These altered confirmations, complete with forged logos and enticingly high rates, trick victim carriers into believing they have a genuine load. The victim carrier hauls the load, submits paperwork to the scammer, expecting payment, while the scammer requests discounted quick-pay from the actual broker.
This cycle can continue for weeks, leaving victim carriers unpaid and unaware until they investigate. By then, the scammer has likely targeted multiple carriers and can disappear by shutting down communication channels, leaving unpaid loads in their wake. A single unpaid load can severely impact a carrier’s finances, taking multiple additional loads to recover the lost revenue.
To prevent such fraud, factors must assist carriers in identifying fake rate confirmations before accepting loads. One of the best ways to fight this fraud is to ensure your factoring software mitigates your risk with fraudulent rate sheet detection features.
Recommendations include checking offered rates against market averages, verifying broker information through official channels, scrutinizing email domains for discrepancies, comparing load numbers with recent records, and analyzing rate confirmations for subtle alterations.
The aim is to empower carriers with tools and knowledge to detect fraudulent rate confirmations and avoid falling victim to this damaging scheme. WinFactor gives Factors one of the most powerful tools to fight rate sheet fraud with our crowdsourced data. See bonafide rate sheets marked with our “golden documents“ mark of approval, so that you can compare and spot fraud. WinFactor is the most reliable factoring software on the market, because we give factors real-time date to make informed decisions and mitigate risk. Learn more about how you can use WinFactor’s software to fight rate sheet fraud.
See the full article on the International Factoring Association Website here.