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Training and technology can mitigate fraud risk
Matt Herr
5 min read
Fraud, theft and scam tactics have been an incredibly worrying topic of discussion across the freight industry over the past year, and the issues are only growing as technology continues to become more sophisticated.
Although Truckstop has been tracking reports of fraud across its entire customer base for 30 years, Lisa Haubenstock, vice president of product, risk and compliance solutions, says incidents of fraud have risen to unprecedented levels in the past few years.
“From the point of view of a load board, fraud is not necessarily all that different from other industries, but we do have some additional areas of vulnerability,” Haubenstock said.
That trend, she says, has been driven by a handful of factors, including vulnerabilities inherent to trucking.
“This industry is unique in that we have to fight the fraud battle on multiple fronts,” Haubenstock said. “Cyberattacks, straight theft, double brokering and other tactics, combined with technological advancements in an industry that wasn’t built to be tech-first, have created a compounding effect, making it ripe for bad actors to come and exploit every vulnerability.”
Many brokerages and other freight companies are not prepared to handle this level of fraud, according to Haubenstock. “We see all the behavioral patterns and how it’s escalated recently, and that’s because many companies are operating with an outdated framework,” she said. “That’s helped create a lot of the environment that we’ve been working to protect the entire industry from.”
A load board service like Truckstop isn’t necessarily that different from any other kind of business, which means the same tactics that apply elsewhere will also apply in freight. However, many freight companies, said Haubenstock, have not caught up with today’s security needs.
“We’ve observed that a lot of companies simply haven’t done infosec training,” Haubenstock said. “The number one reason we see fraud occurring is because of compromised accounts and credentials. One person being susceptible to a phishing attempt or using the same credentials across multiple platforms can open up an avenue to the entire company.”
If one tool or account gets compromised, a bad actor can potentially find a way to access entire systems and impersonate an employee, leading to potentially devastating losses.
“The biggest priority is to do due diligence and get regular training for your entire employee base,” Haubenstock said. “Pair that with intentional risk policy. Know your risk threshold so you have standards for trade-offs between carrier sales and risk and compliance. There will always be trade-offs and risk, so make the right trade-offs for the right reasons.”
For brokerages in particular, relation-based business operations mean that all partners and clients also need to be on board. “At the end of the day, brokers and carrier sales reps can really leverage their relationships with carriers to make sure that partners across the industry go through that same level of education and training,” Haubenstock said.
Carriers tend to be less tech-savvy and might require encouragement and help to understand how to protect their accounts.
“If you can get all carriers to go through the same level of training that you do, everyone will be a lot safer,” Haubenstock said. “Make it really clear how to detect whether an email or correspondence is legitimate.
“Before we even implement any technological solutions, this kind of foundational training is needed so we can at least all understand the basic vulnerabilities,” Haubenstock said.
According to Haubenstock, even simple, old scams are unfortunately effective. These may include a spoofed text or email asking for an address so a delivery can be completed. Many people still fall for these types of scams. Otherwise they wouldn’t continue to occur.
“Scams can be more complex, too, now, so we always have to update our training,” Haubenstock said. “For instance, we see fake QR codes, and some people will trust scanning QR codes more. That’s a new vector.”
Freight companies must carefully consider the profile of people in various parts of the industry, many of whom are not prepared for these types of attacks.
“The good news about simple scams is that relatively simple training goes a long way to combat fraud,” Haubenstock said.
Most fraud is only successful due to human behavior and mistakes made due to individual goals, needs and biases. “A salesperson is going to have naturally conflicting goals with a risk and compliance department, so a lack of across-the-board training and procedure can lead to exploitable gaps in security,” Haubenstock said.
“If you have to book an emergency load on a Friday, you might be inclined to use a more risky carrier, and that might not be aligned with risk policies,” Haubenstock said. “That’s where technology can be layered on top of risk policies to help secure the operation. It can help automate, enforce workflow and streamline processes so that you’re booking more loads faster and with a higher degree of confidence.
“You can look at a larger view and examine the kinds of characteristics that you don’t want to work with, and then you can map out trends to recognize risk,” Haubenstock said.
Operational workflow automations can escalate those decisions to another department for more review, so technological enhancement comes into play by streamlining issues that can be easy to overlook as an individual.
“Bad actors are technically more literate and faster than the population at large,” Haubenstock said. “You really have to fight fire with fire and think about the strategic technology partners you work with.”
Truckstop has access to billions of data points across its entire ecosystem. Given that many brokers don’t have the data and time to aggregate and process the trends, Truckstop has leveraged that data into a carrier-vetting product called Risk Factors to serve the industry and get visibility on these issues.
Risk Factors delivers the latest, most comprehensive insights on VoIP, VIN and IP address behavior and IP risk detection using Truckstop’s behavioral pattern recognition.
“Fraudulent behavior will continue to adapt quickly,” Haubenstock said. “It’s really important for us to have a comprehensive view so we can proactively prevent loss based on patterns.”