Following persistent complaints from truckers, brokers, and insurance companies, federal regulators are establishing a dedicated team to combat widespread fraud in the trucking industry.
The newly formed Federal Motor Carrier Safety Administration’s Registration Fraud Team will operate within the agency’s registration office, focusing exclusively on aiding victims of registration fraud and devising strategies to prevent its occurrence.
“It’s a small team that doesn’t exist now, but we think it will go a long way towards helping the industry,” said Ken Riddle, director of FMCSA’s Office of Registration. “… We’ve heard from every corner of the industry about how bad fraud is right now, and the one thing we’ve heard loud and clear is, ‘How can FMCSA help?’ We took that very seriously, so we’re looking at every way that we can help mitigate it.”
Instances of fraudsters infiltrating the FMCSA’s registration system, utilized for granting motor carrier and broker operating authority, as well as certifying insurance providers, have been reported. These perpetrators register fictitious drivers and companies, resulting in motor carrier identity theft and hindering the FMCSA’s safety monitoring efforts.
Immediate measures being implemented or planned by the FMCSA include suspending online PIN requests for accessing accounts and transitioning to multifactor authentication for all public-facing IT systems.
“We used to send those numbers online per request, but we can’t do that anymore because there was too much fraudulent activity with that,” Riddle said. “Now, the only way to get a PIN number to access an account is to request it, and we will mail it to the address on file. It’s not convenient or expeditious, but it’s a small measure we took to help reduce the fraud.”
Moreover, stricter criteria are being enforced to verify principal places of business during registration.
“This will help prevent some of these virtual, fraudulent, fake addresses that applicants are submitting for the sole purpose of committing fraud on the industry,” Riddle said. “We’re going to have the 800,000 existing registrants go through this identity verification process in order to weed out the bad actors that may already exist in the system.”
In the long term, the FMCSA intends to enlist external contractors to offer identity and business verification services. These short- and long-term initiatives will be integrated into an updated registration system, which is slated to replace the existing Unified Registration System.
Recently, the FMCSA announced its intention to seek approval from the White House Office of Management and Budget to collect new information crucial for establishing the revamped system.
Source: FreightWaves
