Truckers' Protection Against Fraudulent Payment Methods and Double Brokering Act

Energy & Infrastructure Transportation
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Purpose:
The purpose of this bill is to enhance the protection of truckers, independent owner-operators, and the broader trucking industry from fraudulent practices, including the use of skimmed payment methods and double brokering. By implementing stronger regulations, enforcing transparency, and providing resources for detection and recovery, this legislation aims to create a safer, more secure environment for trucking professionals and ensure the integrity of the industry.

Section 1: Definitions

  • Skimmed Payment Methods: The use of stolen or fraudulently obtained payment information (such as credit card numbers or bank account details) to pay for trucking services or transactions.

  • Double Brokering: The practice where a freight broker re-brokers a load without authorization from the original carrier or shipper, potentially involving fraudulent acts, lack of insurance, and non-payment to the trucking company completing the delivery.

Section 2: Prevention of Skimmed Payment Methods

  1. Mandatory Payment Verification Standards:

    • All freight carriers, brokers, and logistics companies are required to implement multi-factor authentication (MFA) for payment transactions, including electronic and wire transfers.
    • Payment processors must utilize real-time fraud detection software that screens for fraudulent or suspicious transactions using stolen payment methods.

  2. Secure Payment Systems:

    • Freight companies and brokers must use tokenization and secure payment gateways that prevent the storage of sensitive payment data, reducing the risk of fraud if payment details are compromised.
    • Payment systems must adhere to the Payment Card Industry Data Security Standard (PCI-DSS) guidelines for card transactions.

  3. Real-Time Payment Alerts:

    • Financial institutions and payment processors should send real-time alerts to truckers, shippers, and brokers for any payments made with flagged, high-risk, or unusual payment methods (such as those linked to previous fraud cases or stolen card information).

  4. Enforcement of Payment Reversals:

    • If a fraudulent payment is identified after services have been rendered, the freight carrier or trucking company must be allowed to reverse or dispute the payment without penalty. Reimbursement should be expedited to minimize financial impact on truckers.

Section 3: Combatting Double Brokering

  1. Licensing and Registration of Freight Brokers:

    • All freight brokers must be licensed by the Federal Motor Carrier Safety Administration (FMCSA) or an equivalent state agency.
    • Brokers are required to register with a nationally recognized database that tracks legitimate brokers and freight transactions. This database should be available to all carriers, truckers, and shippers to verify brokers’ legitimacy and prior business history.

  2. Double Brokering Reporting System:

    • Establish a nationwide reporting system to track instances of double brokering. This system should be accessible by truckers, brokers, and regulatory authorities to flag suspicious brokers and their activities.
    • Encourage truckers and trucking companies to report cases of double brokering without fear of retaliation or loss of business, with protections for whistleblowers in place.

  3. Clear Contracts and Documentation:

    • Freight contracts must clearly outline the roles and responsibilities of each party in the shipping process, including the prohibition of double brokering without the consent of the original carrier.
    • Require that proof of cargo ownership, contractual agreements, and payment receipts be exchanged between the shipper, broker, and carrier at each stage of the shipment process.

  4. Penalties for Double Brokering:

    • Anyone caught engaging in double brokering should face substantial fines and penalties, including the suspension or revocation of their freight broker license.
    • Truckers who are victims of double brokering should be entitled to financial restitution from the broker or responsible party. Additionally, freight brokers who engage in double brokering should be held liable for non-payment of services rendered by legitimate carriers.

Section 4: Strengthening Law Enforcement and Industry Oversight

  1. Dedicated Fraud Prevention Task Force:

    • Establish a fraud prevention task force under the U.S. Department of Transportation (DOT) and FMCSA to investigate cases of fraudulent payment methods and double brokering in the trucking industry. This task force would work alongside law enforcement to target and dismantle organized fraud rings.

  2. Industry Collaboration:

    • Partner with trade associations such as the American Trucking Associations (ATA), Owner-Operator Independent Drivers Association (OOIDA), and National Association of Small Trucking Companies (NASTC) to provide truckers with educational resources on how to identify and prevent fraud and double brokering.
    • Encourage industry-wide collaboration on technology solutions that prevent fraud, such as shared databases, secure payment systems, and software that flags suspicious activities.

Section 5: Support for Truckers and Small Fleet Operators

  1. Financial Protection and Insurance for Truckers:

    • Mandate that all freight carriers and brokers offer fraud protection insurance for truckers and fleet operators to mitigate the financial impact of fraudulent activities. This could include coverage for stolen payments and recovery for losses incurred due to double brokering.

  2. Financial Assistance Programs:

  • Establish a funding program to assist truckers and small fleet operators who are victims of fraud, including reimbursement for unpaid loads and costs associated with resolving disputes or fraudulent charges.

Section 6: Implementation and Oversight

  1. Regulatory Compliance:

    • The FMCSA, U.S. Department of Transportation (DOT), and other relevant regulatory bodies will oversee the implementation and enforcement of these provisions.
    • Freight companies, brokers, and payment processors must submit annual compliance reports to ensure adherence to fraud prevention practices and double brokering regulations.

  2. Public Awareness Campaign:

    • Launch a nationwide public awareness campaign to educate truckers, fleet operators, and shippers about the risks of skimmed payment methods and double brokering, as well as steps they can take to protect themselves.

Section 7: Penalties for Non-Compliance

  • Fraudulent Payment Methods: Companies that fail to comply with secure payment practices or do not implement fraud detection measures may face civil fines and be prohibited from doing business with certain industries until compliance is met.

-Double Brokering: Any freight broker or carrier involved in double brokering will face hefty penalties, including license revocation and financial restitution for truckers and carriers harmed by the practice.

Conclusion:
This proposed bill aims to protect truckers and the trucking industry from the growing threats of fraudulent payment methods and double brokering. By enforcing stricter regulations, encouraging transparency, and creating systems for reporting and prevention, we can reduce fraud in the trucking industry and ensure that truckers are paid fairly and promptly for their services. With strong enforcement and industry collaboration, this bill can significantly improve the financial security and integrity of the trucking profession.

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