Trucking fraud costs legitimate businesses $80 billion every year. Operating a trucking firm and pleasing customers can be a stressful affair. Between looking for more business, learning how to prevent fraud, and ensuring you deliver each shipment on time and remain profitable, there is little time for distractions.
Trucking fraud can cost your business a lot, not just by way of financial losses but also by the lost opportunity to do more business as you attend to the fraud.
Here is a comprehensive look at some common trucking scams to help you learn how to prevent fraud from hurting your firm.
1. Chargebacks
Chargebacks hit certain sections of the trucking industry hard, leading to merchants losing $5.8 billion in 2016 alone as a highlight of the issue. A chargeback happens when a customer disputes a transaction reflecting on their statement through their bank.
Where a merchant ignores or cannot validate the legitimacy of such a disputed transaction, the bank in question will end up withdrawing the value of the entire transaction from the merchant’s account. Not only that, but the bank will also charge the merchant an additional fee for their troubles.
Chargebacks pose a problem for trucking companies because they have the potential to hit between 5% and 15% of a firm's invoices — that then translates to around 2% to 10% of lost revenue for your trucking company. Common chargebacks include defective ticketing and late deliveries, among others.
To avoid chargeback scenarios, it is best to not take card payments in situations where it is hard to authenticate the customer's identity and billing address. Receiving such information over the phone, for example, is one scenario you should avoid despite the temptation not to lose the business.
If a customer transaction hits the $1,000 mark and you must use the phone, then you need to get voice authorization for it. Additionally, where possible, ensure you get a signed consent form from the customer once you conduct a walkthrough.
Business data analytics can help you avoid chargeback issues by identifying potential customer fraud attempts. Using data analytics, you can pinpoint chargebacks that happen due to a mismatch on the ‘address verification service’ (AVS) and the ‘card verification value’ (CVV) numbers to reduce such instances.
2. Fuel Pump Fraud
Identity theft for your trucking companies poses just as much risk as other kinds of hazards. As you give your drivers safety tips, you also need to enlighten them on the dangers of identity theft.
When it comes to fueling, skimmers tend to add magnetic strips to payment terminals so that they can steal payment card information. Some malicious actors can even go as far as placing fake keypads on top of the existing one to capture your PIN as you enter it.
Whenever you are fueling up, scrutinize the keypad or the card reader for any signs that something is out of place. Compare the payment device you have with the one next to you to spot any variations that might be of concern. Does the payment device look suspicious to you? Try physically moving it. If it stays solidly in place, then you have nothing to worry about.
Consider adopting trackable fuel cards for your fleet so that you can have an eye on each activity on the card as soon as it happens. That gives you control in curbing suspicious card activity as soon as you notice it.
Furthermore, whenever you are paying with cards, you should only use those with an EMV chip. These types of cards help keep your transaction more secure as they keep the authorization data on the card without transmitting it. Thus, a fraudster can't use a magnetic strip to capture your payment information during transmission.
3. Practice Prudent Payment Security Habits
In general, payments in one area that business frauds look to infiltrate. To combat these efforts, your trucking business needs to be proactive in how it handles payments across the board.
Whenever you are embarking on a trip, ensure that you only take the card you need to facilitate payments for that specific trip with you. If you bring a fuel card along with you, carry it separately from the fleet card to reduce the chances of someone infiltrating your payments when you lose your wallet.
Whenever you are using your fuel card, don't take your eye off of it. Ensure that you have it in view the whole time and take it back before doing something else. Along the same line, never give your fuel card number to anyone over the phone, and neither should you note it down randomly. Commit it to memory to avoid some unscrupulous person coming across it.
One of the ways that you can effectively spot any hidden fraudulent charges is by scrutinizing your fuel card reports. Make it a habit to go through them in detail instead of glossing them and immediately get in touch with your card issuer when you notice transactions that look unfamiliar. If you retain your expense receipts, it will be easier to compare them against the card statements.
When you get a blank receipt, never sign it. Draw a line across any blank space over the totals.
4. Fake Load Booking
At times fraudsters can collude with a driver to steal a load. In such a scenario, the malicious actor will steal your trucking company's identity and place it on the side of the illegitimate truck they are using. Often, scammers will use a removable door placard for this, and it is one way to spy out a potentially illicit truck.
Since the fake truck and driver look legitimate, an unsuspecting customer might entrust them with their load as they assume they are dealing with your firm. The customer's shipment will then get stolen as the fake driver and truck vanish into thin air.
To avoid this scam, ensure that you sensitize the market to confirm they are dealing with your firm at the start of each transaction. You can provide a toll-free number for them to do so.
Master the Trick on How to Prevent Fraud
Trucking is a lucrative business, and many fraudsters who know this target your hard-earned profits. To keep your business safe, you need to learn how to prevent fraud from hitting your business by identifying the types of scams being perpetrated and finding ways to neutralize such threats.
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