DAT steps up fight against freight fraud, but is it enough?

DAT Freight & Analytics on Tuesday acknowledged the rise of freight fraud and double brokering while introducing its plans "to reduce the risk of fraud and double brokering in the trucking industry."

To some in trucking, the new initiatives represent a step in the right direction, but still fall short of the decisive actions needed to cut out the "cancer" of double brokering. 

“Fraud is on the rise, and DAT is committed to providing the resources our customers need to fight back,” Jeff Hopper, DAT Chief Marketing Officer, said in a press release. DAT said it would rely on “a combination of technology, education and enforcement in our ongoing effort to stop bad actors and help freight brokers, carriers and shippers protect themselves in today’s climate.”

The main freight-fraud fighting steps are as follows:

• Multi-factor authentication (MFA) to verify a user’s identity for logging in to DAT One. MFA is being introduced to customers on a rolling basis this month and will protect against the theft of login credentials. Now, instead of just logging in on a computer, users will be asked to verify on a phone or another device. 
• The DAT Fraud Protection Program, "a microsite with free security-related information." 

Those steps make up the technology and education legs of DAT's freight fraud initiative. As for enforcement, DAT is mostly stepping up, or just talking about, existing initiatives. 

[Related: Broker intrusions on the rise with ubiquitous location tracking capability]

The company said it "expanded its Network Integrity Unit (NIU) by 40% during the past two years," and that the "DAT NIU works with the FMCSA, FBI and other law enforcement agencies to identify freight-related fraud."

The company said in 2022 it blocked access "from more than 3,000 accounts because of suspected fraud," with another 3,000 accounts blocked already in 2023. Also, "DAT blocks access from countries where there is an elevated risk of fraud," it said. 

DAT is using "smart technology and automation" to spot trends among "bad actors to better identify potential fraud" and has expanded its "data science capability," as well, it said. The company pointed to its CarrierWatch and DAT Directory as tools for users to better vet listings, carriers and brokers.  

“The DAT network hosted nearly 400 million truckload shipments in 2022, and the total number of DAT customers has increased by nearly 42% since January 2021,” Hopper said. “As the use of load boards has grown, so has the aggressiveness and sophistication of scammers. These new tools will help users validate the brokers and carriers they want to work with, protect their login credentials and build relationships based on trust.”

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[Related: Double brokering a 'cancer' requiring whole-of-trucking battle plan]

One carrier who has been the victim of identity theft and freight fraud before spoke to Overdrive anonymously for fear of retaliation, called the measures "word salad." 

One step the carrier thought would actually help was the MFA. "Multi-factor authentication is long overdue, so we are pleased to see this being implemented," they said. 

The education aspect also earned some praise: "There isn’t much new information here. It’s just a bit more organized than it used to be on their site."

As far as the NIU's expansion and efforts go, the carrier took a much dimmer view. "Fraud on DAT has gotten nothing but worse over the last two years. Perhaps it could’ve been worse without the NIU expansion, this fact is not a ringing endorsement of the efficacy of this program, as it’s the last two years which have led to the most rampant fraud on the platform."

The 6,000 some carriers blocked from the platform, this carrier found "hard to believe," as DAT cited no sources or methodology for the number. Blocking carriers from "countries where there is an elevated risk of fraud," to this carrier reads as "entry level fraud prevention," which any motivated fraudster could get around using a VPN, or virtual private network, that can make a user appear to be in another country. 

[Related: The third parties following you around the freight networks]

Furthermore, the carrier took issue with DAT's CarrierWatch feature, and showed Overdrive copies of communications with the load board wherein the carrier flagged suspicious insurance company behavior. 

"There have been insurance fraud cases opened with the Nevada and California insurance licensing boards that DAT has been made aware of, but DAT accepts customers using that insurance provider," the carrier said. "While their CarrierWatch system may monitor motor carrier insurance, if they are not willing to purge and call out bad actors, it is a useless protocol."

Other carriers, like Overdrive's June Trucker of the Month Debbie Desierato, have accused DAT of pushing rates down by using carrier data like their availability listings. 

Overdrive reached out to DAT for comment, and will update this story if we hear back. 

Overall, the unnamed carrier said that with "no mention of any forensic audit of their existing customer base" nor any plans to make "improvements on how to communicate fraud to DAT, and how DAT will investigate and communicate findings of said fraud," the new initiatives fall short. 

[Related: Sens., Reps push for OIG task force on double brokering, other fraud]