Identity Fraud: Solutions to a Growing Threat

Making hard phone calls is never easy, especially when it involves delivering bad news to a customer. For many businesses in the logistics and transportation industry, those dreaded phone calls often stem from one thing: fraud.

The rise of sophisticated fraud schemes like strategic cargo theft and fictitious pickup scams has made it easier for criminals to exploit vulnerabilities in the supply chain. According to CargoNet, cargo theft reached a 10-year high, with a staggering 600% increase in theft incidents from November 2022 to March 2023 alone. The primary driver behind this surge is strategic theft, where criminals use stolen identities and increasingly advanced technology to deceive unsuspecting parties. As a result, businesses across the industry must be more proactive than ever in protecting their supply chains, operations and customers from fraud.

To shed light on the current landscape of identity fraud and to explore strategies for combating it, I interviewed Blair Hutson, a general manager at CBT Inc., in Oakwood, Ga., and a long-standing member of TIA’s Fraud Taskforce.

Blair’s extensive experience in fraud prevention provides valuable insights into the ways criminals are exploiting the system—and how businesses can respond.

The Rise of Identity Fraud in Logistics

“We learned how to fight fraud because we were victims of fraud,” Hutson proclaims. Hutson explains that identity fraud in the logistics sector has evolved significantly over the 25 years he has been in the logistics industry. What was once a problem of simple theft is now compounded by the rise of strategic cargo theft, where criminals use deceptive tactics to gain control of shipments.

“Fraud doesn’t discriminate; unlawful brokering and other methods of fraud have been around for years, but now it’s faster and more sophisticated,” Hutson states. Fraudsters are leveraging technology to impersonate legitimate motor carriers or freight brokers, gaining access to loads and re-routing them for their own benefit. This scheme is detrimental for logistics providers, like Hutson and his colleagues at CBT, Inc.

“That empty feeling you get whenever you get a phone call, going to your customers saying their package is gone. That’s the worst phone call you can ever make,” Hutson reveals.

According to TIA’s 2024 Framework to Combat Fraud (https://www.tianet.org/wp-content/uploads/2024/08/2024-TIA-Framework-to-Combat-Fraud-20240820-FINAL.pdf), one of the reasons fraud is becoming so rampant is the decreased freight rates, which make it harder for legitimate carriers to find profitable work. Another reason is attributed to new technologies that allow fraudsters to impersonate legitimate motor carriers.

Leveraging Technology to Detect and Prevent Fraud

Fortunately, technology isn’t just a tool that fraudsters are using, it’s also a powerful asset for businesses trying to combat fraud. Hutson notes that companies like Highway are creating products that are a gamechanger in detecting fraud.

“We recently started using Highway to quickly identify bad actors. When dealing with fraud, 2-3 hours can feel like a lifetime. Highway helps us decipher the red flags, saving us a significant amount of time and effort.”

Technology enables businesses to verify the legitimacy of brokers, carriers and customers before engaging in transactions. When asked about how else to safeguard against fraud, Hutson says, “There’s a lot to consider. I would say to stay vigilant, ask a lot of questions and always seek out third-party verification.”

By leveraging third-party vetting companies, businesses can minimize the risk of falling victim to fraudulent schemes. The combination of these methods creates a defense system that makes it harder for criminals to exploit the supply chain.

The Power of Industry Collaboration

One of the most important lessons Blair has learned throughout his career is the power of collaboration. As a member of TIA’s Fraud Taskforce for 2 years, Blair has seen firsthand how the sharing of knowledge and resources can help businesses collectively combat fraud.

“Reaching out to members, being a part of the solution and sharing information is crucial,” Hutson says.

This collaborative approach has proven invaluable in addressing threats in the supply chain. The TIA Fraud Taskforce provides a platform for industry professionals to discuss trends, share strategies and be a key part of the solution. For Hutson, the value of this committee is clear.

“I’ve never had a question that’s been unanswered within the TIA community,” Hutson declares. “This group provides a platform for those involved in the nitty gritty details of combatting fraud to share resources and expertise with one another. This committee is united in their dedication to taking a proactive stance against fraud in the supply chain.”

Have you been a victim of fraud? You are not alone! Don’t miss these sessions at TIA’s Capital Ideas Conference, April 9-12 in San Antonio to stay up to date on fighting fraud.

April 10

• TIA 2025 Capital Ideas Conference Opening Session with Keynote speaker crime expert Frank Abagnale
• Building a Trustworthy Carrier Network: Beyond Loadboards
• High-Tech Heists: The New Threat to Cargo Theft
• Fortifying Freight: Insights from Cybersecurity Leadership in Logistics

April 11

• Eliminating Fraud in Your Inbox
• Fraud and the Impact on the Freight Industry
• Fraud Hack-a-Thon

There is no time to waste, register today!

Jennifer is the Digital Marketing Specialist at TIA. You can reach her at zhao@tianet.org.