Fraud is a hot topic across the industry right now, and the transport pipeline has become one of the more concerning places it's showing up.
Driving the news: Frank Zombo, VP of sales at Auto Hauler Exchange, raised the alarm on a recent episode of Daily Dealer Live.
As he explained, fraudsters are monitoring shipment notifications, identifying high-value units, impersonating legitimate carriers, and picking up vehicles before the real driver ever arrives.
By the time anyone notices, it's gone, which is why he says, without the right checks and balances in place, most dealers won't know they're exposed until it's too late.
Some background: Most dealers move vehicles through a third-party broker, someone who takes the shipment request, finds a carrier, and manages the transaction in between.
In this dynamic, the dealer pays the broker's quoted price, the broker pays the carrier, and pockets the difference.
The dealer rarely knows what that spread looks like, and more importantly, rarely knows who is actually coming to pick up the vehicle.
That, Zombo says, is the gap fraudsters are exploiting.
What he means: When a dealer hands a shipment off to a broker and never establishes direct contact with the actual carrier, there's no way to verify who shows up to collect the vehicle.
Instead, it’s just an assumption made by the dealer that the broker handled the handoff without issue.
What’s more: Zombo pointed out that the incentive structure of the traditional broker model exacerbates this.
From his perspective, brokers often actively discourage direct dealer-to-carrier contact because transparency into what the carrier is actually being paid would reveal the margin they're making on each load.
"A lot of times with the other model, they're trying to block that because they don't want you to really know what you're paying for the truck," Zombo said.
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Digging deeper: He added that the risk is concentrated on high-value vehicles because the payoff justifies the effort.
Arbitration windows play a role here, too, because when transport takes longer than expected, dealers sourcing vehicles from auction can miss the window to flag condition issues and file a claim.
By the time the vehicle arrives and goes through recon, it's too late to arbitrate.
Zombo’s advice: Before any unit ships, confirm the driver's name, phone number, and truck number directly.
Verify FMCSA scores and certificates of insurance for every carrier touching a load.
Apply stricter protocols to high-value vehicles specifically, because the risk profile isn't the same as the rest of the inventory.
And track days from purchase to delivery as a standing metric.
"Make sure you have your checks and balances in place," Zombo said, "because it is everywhere."
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