Warns of a new fraud model – fictitious carriers

Tadas Volbikas
2 days ago
4 min read

A few years ago, the majority of damage suffered by logistics companies in the European Union was related to traffic accidents or other unintentional errors by carriers. Today, the situation has changed dramatically. The share of damage caused by criminal incidents – theft, robbery, fraud, damage caused by migrants – is growing rapidly.

It is important to understand that these threats have long ceased to be a problem only for the logistics sector. Every company that produces, sells or simply transports its goods can become a target for criminals. It is in this context that another extremely dangerous scheme has emerged, causing enormous losses to business - fictitious carriers. From isolated cases to a systemic threat A fictitious carrier is a person or an organized group acting for fraudulent purposes, pretending to be a legitimate participant in the logistics market in order to seize cargo. In modern supply chains involving forwarders, subcontractors and customers from different countries, such carriers can "insert" at any point in the chain. In practice, there are cases when fraudsters acted both as hired carriers and as customers.

Scammers are constantly improving

“The schemes of fictitious carriers are constantly changing and becoming increasingly difficult to recognize. Previously, fraudsters were given away by the email domains used or obviously forged documents, but today technology has become an effective tool for criminal schemes,” says Tadas Volbikas, CEO of UADBB “Legator”. T. Volbikas also draws attention to the fact that fraudsters are able to exploit legal loopholes. “Previously, the carrier was required to leave his stamp on the waybill. Today, legal acts no longer require this, which makes it easier to remain undetected, because the production of stamps and their transfer to accomplices throughout Europe would have previously been a complicated and expensive process,” notes T. Volbikas.

According to him, schemes that are harder to trace now dominate – copying real companies or acquiring them for criminal activities. Fraudsters take over company data, create similar domains and control communications, making it almost impossible to recognize a fictitious carrier with the naked eye. It is worth noting that fictitious carriers invest in their schemes: they buy used trucks, obtain real licenses and hire qualified transport managers.

"This shows that behind such schemes there are organized structures with financial and legal resources. Logistics professionals who are well versed in transportation processes work here," emphasizes T. Volbik.

From millions in losses to a damaged reputation

Financial losses incurred when dealing with a fictitious carrier can range from tens of thousands to millions of euros per incident - it all depends on the nature of the cargo.

"Most often, liquid, high-demand goods are targeted - alcohol, cosmetics, electronics, non-ferrous metals, vehicles or their parts," says T. Volbikas. However, non-financial consequences are also important - the loss of cargo can disrupt production, supply chains, and lead to violations of contractual obligations. In such situations, companies risk their reputation and may eventually lose part of the market.

Time to worry about business

According to Roman Demidenko, chief claims expert in the legal department of insurance claims administration company L Claim, the problem of fictitious carriers has already become a systemic problem. "Its scale is such that it is time for both the business community and state institutions to be seriously concerned. Although we see some momentum in Lithuania in the proposed amendments to the legal acts, the schemes are widespread throughout Europe," says R. Demidenko.

According to him, the number of cases and their complexity clearly indicate organized, international crime networks.

Common mistakes and signals that businesses overlook

According to R. Demidenko, one of the most common business mistakes is to rely solely on the data provided by the hired carrier via electronic communication and not compare it with publicly available information.

It is difficult to recognize a well-organized fictitious carrier, so the expert advises paying attention to the following warning signs:

The carrier avoids providing recommendations or provides them at unusually long intervals and in atypical ways.
They are trying to divert attention by suggesting checking other, at first glance reliable data, thus "biting the bullet".
The company has not declared the results of previous financial years or publicly available data does not match the information provided by the carrier; frequent changes of managers or shareholders are observed. Carrier representatives avoid direct communication by phone, ask to communicate only via WhatsApp or Viber, often indicate that they are on a business trip or vacation.
Unlike mobile data, such communications are more difficult to trace.
The number of employees indicated in public databases does not correspond to the actual volume of transport offered.
The company name or other details differ minimally from well-known market participants – for example, by one letter or symbol.
The country of registration of the vehicle's license plate number upon arrival does not match the country indicated on the documents. Vehicle details are often changed at the last minute and loading is rushed, especially before weekends.

None of these signs alone necessarily indicate fraud, but together they should be a serious signal to conduct additional checks.

What to do if you suspect a fictitious carrier?

According to lawyer R. Demidenko, the sequence of actions in such situations is critically important. The first step is to immediately contact the police, without waiting for the insurer's decisions. It is necessary to inform independent investigators who can collect evidence and assess the possibilities of recovering the cargo. In practice, there are cases when a fraudster re-hires an unsuspecting carrier. If the data of the actual carrier was collected and verified in advance, the cargo can still be directed to a safe place with the participation of local law enforcement.