6 uncommon facts about freight bill factoring frauds
Truckers drive thousands of kilometers every month to supply freight across cities and towns, but delayed payments can seriously hamper their productivity. Freight bill factoring takes invoices for the loads that truckers supply and pays them right away, so that they don’t have to wait for their payouts. Though the process is highly effective, frauds relating to freight bill factoring have also become common. So, here are some lesser-known facts about freight bill factoring frauds:
Submitting fake invoices
Software programs generating invoices may not always have filters to differentiate genuine invoices from fake ones. So, there have been cases where a fake invoice quoting a much higher amount than what is payable has been passed on to invoice factoring companies. Such activities become even more difficult to track if the fake invoice is from a regular client. For this reason, employees in freight bill factoring companies should closely monitor the invoices through a standard process to avoid such illicit activities.
Sending invoices before the freight is supplied
If truckers send in their invoices before the freight is delivered, there is no guarantee that they will supply the freight to the destination. Invoicing companies should have strict protocols that prevent truckers from sending in paperwork before the freight is delivered to the locations. Checks should be in place to verify that the freight has been supplied.
Transactions from fake trucking companies
In some cases, the trucking company that sends invoices may not even exist. These invoices are generated by scammers, who pretend to have truckers employed under them. So, invoice processing companies should have HR policies in place to screen trucking companies before onboarding them. To avoid such scams, clients should be asked to submit documentation on the company and individual stakeholders to the invoicing company beforehand.
Sending invoices without a proper break-up of values
All invoices from trucking companies need to be checked and double-checked before being passed, but this particularly applies to round-figure amounts with no break-ups or details of what freight has been transported to which place. Many scammers directly enter round figures in invoices, demanding a lump sum for work they probably never did. So, invoicing companies should be wary of round figures that do not provide any details of freight delivery.
Noticing sudden changes in the vendor’s bank details
It is common for people to change their bank accounts for personal reasons, but it is equally common among scammers. Consequently, invoice factoring companies should take note of sudden changes in bank details, contacting the trucker to inquire about this change and provide evidence of KYC completion at the new bank.
Urgent payment requests
If a trucking company requests urgent payments, it warrants an investigation. The reason may indeed be genuine, but this needs to be established before the money is paid out. So, invoice factoring companies should ask the payee specific questions regarding the reason for this sudden demand.
Freight bill factoring is a useful tool to ensure that truckers are paid on time for the efforts they put in. But some caution is necessary to avoid freight bill factoring frauds.
