Fraudulent Activities Have Increased. When Does Cargo Theft Take Place?

Natalia Zuy, Head of the Legal Department, TELS Group

Due to the increase of criminal incidents in the cargo transportation market, the Legal Department of TELS Group reminds its employees and partners once again of the importance of the rules preventing cargo theft and the procedures allowing to admit contractors for transportation.

Fraudsters act skillfully and in a sophisticated manner as they have good knowledge of both cargo transportation and psychology. They easily gain managers’ confidence trying to dull their vigilance and impel to negligent actions aimed to bypass the admission instructions.

According to the number of the insured events declared by the TTClub at the end of 2019, the following cargo groups were stolen most often:

  • 28 % of food and drinks
  • 13 % of electronics
  • 10 % of alcohol and tobacco products
  • 7 % of products for the automotive industry
  • 6 % of consumer goods
  • 5 % of building materials
  • 31 % of other products (metals, fuels, chemicals, etc.)

The analysis of the insured events allows to make a list of typical situations which may result in cargo theft.

Placing orders via the Internet

Fraudsters find cargo transportation offers online, get in touch with the managers and offer transportation services at attractive prices. It is advisable to exclude online offers and use the Internet only to find, check and outsource subcontractors for possible transportations.

Getting in touch with subcontractor only via the mobile phone or public services

Fraudsters are the first to get in touch with the managers. They offer free cars in different regions. They ask for orders insistently thereby fishing for information on the types of transported goods and the costs. Significantly, all the communication is carried out by the phone and / or e-mail and instant messengers from public domains like Gmail and Yandex.

It’s important to find out subcontractor’s landline number as well as their corporate website, e-mail address and the office address where the company is physically located.

No mentions or references on the Internet

Any reputable transport company will have credible references on the Internet. Besides reviewing company’s feedbacks online, it’s important to study their website.

Large fraudsters clone websites of real transport companies. The site may differ by only one letter, so you need to pay attention to this as well and compare the websites of potential contractors in various sources on the Internet.

Suspicious registration documents

Don’t hesitate to raise a red flag if the identity of the provided documents is under question, if the business is registered or re-registered in the current year, if the owner of the company has changed or the company owns only one car.

Fraudsters often use the documents and data of the existing companies which have been previously received by fax or downloaded from the public websites. Naturally, the real company will deny their involvement in any transportation after the theft.

That’s why it is important to check the authenticity of the registration documents with the information available on the official websites responsible for business registration. It’s also advisable to get in touch with company’s managers independently.

“Friday syndrome”

Most cases of cargo theft fall for Fridays involving deliveries to remote destinations after the weekends or holidays. Fraudsters disappear with the cargo and sell it conveniently within the agreed timeframe. It is best to refuse employing unverified subcontractors for transportations during such periods even if this will result in a penalty for the late placement of a vehicle.

Subcontracting orders

Even the most thorough verification of a subcontractor to be involved loses any meaning if the latter is subcontracting the order to someone without verification. Don’t be deceived by the hope that such a negligent subcontractor will compensate for the losses. In real practice, they will either go bankrupt or will use any chance to avoid large financial liability. It is advisable to either prohibit further subcontracting of certain orders or agree on the contract conditions limiting uncontrollable involvement of third-party companies.

Involving reputable carriers and drivers into fraudulent schemes

One of the traditional fraud schemes implies the attraction of reputable carriers having all the required registration documents including the valid insurance policy. During transportation the carrier or their driver receives an instruction (sometimes by the phone!) from a fraudster’s subcarrier referring to the cargo owner and asking to deliver the cargo to a different address. Thus, the cargo easily gets into fraudster’s hands and the carrier who has fulfilled the order refers to the instructions given to them directly from the customer.

If you are forwarding expensive marketable goods with a new dealer, make sure that the carrier and the driver will not re-address the cargo without a direct confirmation from the shipper.

Replacing the vehicle

Fraudsters send information about the replacement of the vehicle just before the loading day. The forwarder simply has no time to check the new car or pays little attention to the replacement by simply changing the car number in the transportation documents.

It’s important to be careful with the replacements of a vehicle by clarifying the reasons for the replacement, checking the new vehicle and the driver, warning the shipper about the Impossibility of loading to an unverified vehicle.

Invalid insurance policy

Cases when companies with a valid insurance policy commit frauds are very few. Generally, fraudsters provide a fake, third-party, unpaid insurance contracts or contracts for a short period, usually for the period of the expected loading.

To verify the validity of the policy, send a written request to the insurance company that issued the policy or call them to learn more information on the policy. Don’t forget to record the name of the insurance agent who provided you the requested information.

How does TELS verify its contractors?

TELS updates the instruction allowing to admit contractors for the transportation of goods on a regular basis according to the new types of fraudulent schemes. The execution of the instruction goes along with program and organizational control systems. We verify the supplier by the history of the creation of the transport company, changes in founder members, compliance of the documents with the samples approved by competent authorities in the country of registration as well as check company’s background. According to the Instruction, the following characteristics may witness of an unfair business:

  • the information in the provided documents is different from the information obtained from our information sources;
  • lack of any supplier’s activity;
  • change in ownership and type of activity in the past 1.5 years;
  • company’s legal address coincides with the mass registration address;
  • no website at all or a doubtful website (created recently, filled poorly, no information on the developer, etc.);
  • no landline number or the landline number specified in the documents belongs to a mediator (dispatcher) or does not exist at all;
  • no information on mandatory financial statements.

There are over 20 points helping our employees define unfair businesses, but we would prefer not to disclose them all as not to reduce the controlling effect.