With recovery efforts in the wake of Hurricane Helene in full swing and Hurricane Milton expected to surge through the middle of Florida on Wednesday, the risk of freight fraud in the trucking sector is reaching new levels.
“Fraudsters never let a crisis go to waste,” Lewie Pugh, Owner-Operator Independent Drivers Association vice president, told FreightWaves. Independent truckers and owner-operators, with their built-in schedule flexibility, are in prime position to move storm-related emergency loads.
“There’s a strong possibility these fraudsters are on the load boards either trying to steal loads or offering FEMA loads. They may offer a load and you haul it, but you never get paid because they’ve brokered it from someone else. Or they may have it hauled to a fake warehouse and then steal the cargo outright.
“Also, we usually tell our members that if a rate is too good to be true, it probably is. But now because of the demand for emergency supplies, you’re going to have some really good rates going into these disaster areas, so the chance to separate what’s real from what’s fraudulent are going to be tougher for a while.”
The window for an uptick in freight fraud could last for months as the devastation left by Hurricane Helene alone is unfolding as a massive recovery effort.
Hurricane Milton, which registered as a Category 4 story on Tuesday, has the potential to be one of the most destructive on record for west-central Florida, according to the National Hurricane Center, and its effects are already appearing in Florida freight markets.
These major storms come at the same time that freight markets are “under siege” from increasingly sophisticated fraud schemes, according to the Transportation Intermediaries Association.
In its “State of Fraud in the Industry 2024 Report” published in September, TIA emphasized that truckload freight — which provides a significant amount of hurricane recovery capacity — is the primary target of fraud, with 98% of respondents to TIA’s survey identifying it as the most vulnerable mode.
TIA highlighted eight types of fraud in the report — spoofing, unlawful brokerage scams, fictitious pickups, phishing, identity theft, email/virus, inbound phone calls and text messages — all of which could see an uptick in the midst of recovery efforts, according to Pugh.
The loosening of federal regulations to make response efforts easier and more efficient can also inadvertently provide fraudsters loopholes to exploit, including temporary hours-of-service waivers initiated on Friday by the Federal Motor Carrier Safety Administration, and the decision by the agency on the same day not to enforce Temporary Operating Authority Registration fee provisions.
“We usually see broker fraud conducted by people that haven’t had their authorities very long, so lifting fees for temporary authority could be another way to invite in bad actors,” Pugh said.
“Unfortunately there are people that are going to do anything to take advantage of folks.”
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