Redefining Transparency in Freight Interactions With Know Your Trucker
Learn how facial recognition technology can stomp out double brokers and other bad players from freight transactions.
As freight fraud tactics become more sophisticated, there is a pressing need for more innovative solutions to keep up with these advanced tactics. The fraud attempts of yesterday have been amplified thanks to the misuse of technology, making a compelling case for a robust technological response.
Current Trends in Freight Fraud
The freight industry has witnessed a dramatic surge in fraudulent activities in recent years, with technology playing a key role in enabling these crimes. While technological advancements have streamlined logistics and supply chain operations, they have also opened new avenues for scammers to exploit.
Skyrocketing Cargo Theft through Digital Means
2023 saw an alarming increase in cargo theft numbers, with a significant rise in shipment misdirection by fraudulent means. According to CargoNet, there was a 59% increase in thefts in the United States and Canada compared to the previous year, highlighting a worrying trend. Traditional cargo theft, which involves physically stealing cargo, rose by 63% in the first half of 2023 alone. However, a more insidious problem is cargo theft achieved through deception, with rates growing exponentially - up to 600 to 700% in some comparisons year-over-year.
The Digital Landscape: A Double-Edged Sword
The integration of data and automation into the freight industry has been a game changer. However, it has also created vulnerabilities. As Brent Hutto from TruckStop notes, the movement of carrier, freight, and broker information through digital channels has opened cyber doors for criminals. The misuse of digital platforms for fraud, including identity theft and broker impersonation, highlights the need for advanced solutions.
Strategic Theft: A New Breed of Cargo Crime
Strategic theft has emerged as a sophisticated form of cargo crime. It involves a series of steps where thieves steal the identity of a shipper or broker, book a load under this false identity, and then misdirect the cargo to steal it. This method is akin to laundering, where the identity of the cargo is continuously altered through cross-docking and reissuing of paperwork, making it difficult to trace.
Fraudsters may spoof or falsify credentials, logos, or email addresses to appear as legitimate carriers or brokers and then engage in various fraudulent activities, such as requesting upfront payments or stealing loads in transit.
The Rise of Double Brokering Scams
Double brokering, though not always directly linked to cargo theft, has significantly contributed to the rise in freight fraud. It involves the unauthorized transfer of a load from one freight broker to another without the shipper's consent. In late 2022 and early 2023, complaints related to double-brokering increased by 400%, indicating a staggering rise in this type of fraudulent activity.
Challenges in Combating Freight Fraud
Tackling freight fraud is akin to navigating a complex maze with moving walls. The intricacies of identifying and preventing such fraud stem from several key factors:
- Evolving Fraud Schemes: Fraudsters continuously adapt and refine their tactics, making it challenging to keep up. As soon as one method is countered, they devise new strategies to bypass security measures.
- Sophisticated Deception Techniques: The use of advanced technology by criminals has led to more sophisticated deception techniques. This includes everything from creating convincing fake identities to hacking into digital freight systems.
Limitations of Traditional Verification Methods
- Inadequate Data Verification: Traditional methods often rely on surface-level data verification, which isn't foolproof against sophisticated frauds.
- Delayed Response: The traditional verification processes are time-consuming, often leading to delayed responses that give fraudsters a window to execute their plans.
The Human Factor and Technological Gaps
- Human Error: Even the most vigilant staff can fall prey to well-crafted scams, especially under high-pressure conditions or due to lack of training.
- Technology Shortcomings: Existing systems might not be equipped to handle advanced fraud techniques, especially those exploiting digital platforms.
- Lack of Comprehensive Monitoring: Continuous monitoring is essential, but many systems lack the capability to detect anomalies in real-time, allowing fraudsters to slip through the cracks.
These challenges highlight the need for an agile, technology-driven approach that can adapt quickly, offer advanced verification, and minimize human error to effectively combat freight fraud.
Learning from Fintech: The KYC Analogy
Just as KYC (Know Your Customer) has transformed the fintech industry by enhancing transparency and trust, KYT (Know Your Trucker) aims to achieve the same in the trucking sector. KYC checks in fintech serve a dual purpose:
- Risk Assessment: They enable fintech companies to evaluate a customer’s risk profile.
- Fraud Mitigation: More importantly, KYC checks are crucial in confirming a customer's identity. By verifying that financial institutions are dealing with the correct person, KYC helps prevent financial fraud and identity theft.
Similarly, KYT brings this concept of thorough identity verification and risk assessment to the trucking industry. By making sure that freight brokers and carriers are dealing with legitimate and trustworthy individuals, KYT aims to reduce the risk of freight fraud significantly.
How KYT Redefines Fraud Prevention in Freight
The Centrality of Facial Recognition: At the core of KYT’s approach to combatting freight fraud is its facial recognition technology. This feature is key in assessing the authenticity of individuals involved in freight transactions:
- Immutable Identity Verification: Fraudsters may change their names, company details, emails, and phone numbers, but they cannot alter their faces. KYT’s facial recognition technology effectively prevents individuals from hiding behind false identities.
- Deterring and Stopping Repeat Offenders: This approach not only deters bad actors from engaging with legitimate freight brokers but also stops them from rebranding and repeating fraudulent activities if they are flagged in the system.
- Protection for Both Brokers and Carriers: KYT’s facial recognition technology offers a strong layer of protection for both brokers and carriers. It safeguards brokers from scams and protects carriers from having their information stolen and misused.
Facial Recognition Association: This feature enhances the platform’s security by:
- Monitoring Carrier Associations: Like phone number association, facial recognition association notifies freight brokers if a motor carrier is linked with any other carrier on the platform and the last date of association.
- Preventing Undetected Rebranding: If a user is flagged for serious misconduct, such as double brokering or cargo theft, every broker on the platform is notified. That means this bad actor cannot re-enter the industry undetected, no matter how many shell companies they open.
Solving Real-World Problems in Real-Time: Within this company, an agent named Bob is flagged for double brokering. If Bob then tries to rebrand and establish a new company, KYT’s system promptly identifies and flags Bob’s face for his past misconduct. Moreover, other agents from the original shell company, John Doe Trucking, cannot evade detection. Should any of these individuals attempt to pass KYT’s verification process — even after altering their name, email, or phone number — the system will recognize them. It immediately reveals their prior association with the flagged John Doe Trucking, including the date of their last interaction. Essentially, any user linked to a carrier previously caught for double brokering will be identified, allowing for continuous accountability and transparency in the network.
Additional Features of KYT
While facial recognition is the backbone of KYT’s platform, other features complement this technology:
- AI-Powered Solutions: Advanced algorithms detect and flag unusual patterns, staying ahead of evolving fraud schemes.
- Real-Time Verification: Instant verification processes, including driver’s license validation, significantly reduce the window for fraudulent activities.
- Advanced Security Features: Additional features like phone number network information aid in identifying discrepancies.
By focusing on facial recognition and supplementing it with other advanced features, KYT stands out as a comprehensive solution in the battle against freight fraud, creating a safer and more transparent environment for all parties involved.
These advanced features are just the beginning of what KYT offers to redefine freight security. KYT makes the process seamless and user-friendly – there's no need for an app download, as everything is conducted smoothly via a secure text message. Importantly, the focus is on verifying the identity of the person booking the freight, not every trucker – targeting the root of potential fraud.
Take a closer look at how KYT works.
KYT is a free tool for carriers, providing a vital safeguard for your Motor Carrier (MC) number against unauthorized use among KYT brokers. As for brokers, KYT is so confident in the platform's effectiveness that new users will receive $100 worth of free credit to explore KYT. There are no strings attached, no credit card required. If you're not convinced by what you see, there's absolutely no loss.
The era of elevated security, transparency, and trust is now. Your customers expect it, and KYT delivers. Choose KYT for the assurance your operations need. Visit the KYT websiteThe freight industry has witnessed a dramatic surge in fraudulent activities in recent years today to secure your operations and lock the door to bad actors in freight transactions.