From identity theft to outright cargo heists, fraud is a growing concern in the freight industry.
In an effort to stem the fraud epidemic, the Federal Motor Carrier Safety Administration (FMSCA) is in the process of updating the Unified Registration System (URS) for motor carriers. The new system requires identity verification — something the current URS lacks.
“Live fraud is coming at this industry from every angle, every corner of the industry,” said Ken Riddle, director of the office of registration for the FMCSA. “It doesn’t matter whether it’s the insurance lane, the process agent lane, a carrier or a broker — fraud is rampant.”
Fraud directly impacts a trucking company’s safety, Riddle says. “It’s taking money out of a carrier’s pocket, so they may not to be able to change the tires or fix the brakes. That’s a simple example.
URS basics
URS is the process motor carriers use to apply for a U.S. Department of Transportation (DOT) number. A DOT number is a series of digits serving as an identifier for a company recognized by the FMCSA; this number is used as a reference to track a company’s safety record, incidents and compliance. Whether a company is involved in transporting cargo, passengers or hazardous materials, having a DOT number is essential.
For motor carriers, a USDOT number is required if the company operates trucks weighing more than 10,000 pounds, operates commercial vehicles on interstates or moves hazardous materials. In addition, brokers, freight forwarders, intermodal equipment providers and cargo tank facilities must obtain a USDOT number.
A motor carrier only needs one USDOT number for the company; a unique number is not required for each vehicle operated. This number must be displayed on both sides of all the carrier’s commercial vehicles.
Verification for all
As noted earlier, identify verification is a new addition to the URS to protect carriers against fraud.
“Every time we come up with a way to address fraud, (the fraudsters) are always one or two steps ahead of us,” Riddle said, “They’ve already created a new way to commit fraud.
“We rolled out identity verification in mid-April as part of the registration process for new applicants,” he continued. “Now when you register through URS as a new applicant, you have to go through identity verification.”
According to Riddle, the FMCSA is all too aware that there are individuals and entities currently registered in the URS that shouldn’t be there — and the agency is working to correct the situation.
“We’ve got to weed them out. They’re taking money out of (motor carriers’) pockets,” he said.
Once the FMCSA rolls out the final version of the new system, all existing registrants will need to go through the identify verification process — not just new applicants.
Online option
Identity verification is a relatively simple process involving just five steps; however, the technology behind the process is quite complicated. The FMCSA has contracted with IDEMIA, a provider of biometric and cryptography solutions, to create a system that will allow all necessary databases to share information once a person’s or motor carrier’s verification is complete. IDEMIA is the same company that provides service to TSA checkpoints.
Most applicants will be able to complete the identity verification process online, Riddle says. However, in some cases applicants may be required to visit a verification center. Eventually, there will be a total of 300 centers, something he says will prevent applicants from having to drive long distances.
“Right now, we have 87 (centers), but we didn’t want to wait until all 300 were up and running before we rolled out this identity verification,” he said. “The industry could not wait. We couldn’t keep that front door open and inviting everybody in. We had to close the front door — and start protecting the front door.”
Luckily, he says, most people can complete the process without an on-site visit.
“Not many people are going to have to visit an enrollment center,” he said. “Most people are going to be able to do this at the kitchen table.”
So far, he says, nearly 98% of users have successfully navigated the online registration system.
It’s the other 2% he’s concerned about.
“That 2% are either fraudulent and shouldn’t be coming in, or they are customers that need help,” he said. “But we’ve got quite a few individuals that are trying to get in and can’t get in for a good reason.”
Already, the system has been bombarded by “bot” users that have tried to scam the system. These attempts have failed, but Riddle says the numbers are disturbing.
“That’s a lot of people trying to get through that front door that can’t get through that front door to include bots,” he said. “And the bots have not been able to get into the front door.”
Riddle believes that, once implemented, the new system — dubbed Modus — will be a “one-stop shop” for carrier verification.
“I’m very excited about the new system,” he said. “It can’t come fast enough.”
Since retiring from a career as an outdoor recreation professional from the State of Arkansas, Kris Rutherford has worked as a freelance writer and, with his wife, owns and publishes a small Northeast Texas newspaper, The Roxton Progress. Kris has worked as a ghostwriter and editor and has authored seven books of his own. He became interested in the trucking industry as a child in the 1970s when his family traveled the interstates twice a year between their home in Maine and their native Texas. He has been a classic country music enthusiast since the age of nine when he developed a special interest in trucking songs.
