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Dispatching

How to check a freight broker and avoid fraud

Short answer. A legal broker has active FMCSA broker authority, a $75,000 surety bond or trust fund, and a BOC-3 process agent. Check them free on FMCSA SAFER and Licensing & Insurance, check credit and days-to-pay through your factoring company, and confirm the load by calling the broker's official number.

What a legal broker must have

Where to check

WhatWhereWhat you look for
Authority and statusFMCSA SAFER Company Snapshot"Authorized for Broker", name, MC
Bond and authority historyFMCSA Licensing & Insurance (L&I)Active bond, authority date, revocations
Credit and payment speedYour factoring companyApproved or not, credit score, average days to pay

Red flags

The 6-step check for every new broker

  1. Active MC with broker authority (SAFER).
  2. Active bond (L&I).
  3. Approved by your factoring company, with credit score and days to pay.
  4. Phone and email domain match the official ones.
  5. Call the official number: does this person work there, and does the load exist?
  6. The rate confirmation comes from the same company.

Days to pay matter more than an extra $100 on a load. A broker that pays in 25 days is worth more than one that pays a little better in 70 days.

Questions

What is double brokering?

Someone takes a load and passes it to another carrier without authorization, collects the payment and disappears. The carrier who ran the load is not paid.

How much is a freight broker bond?

$75,000, required by federal rules (49 CFR 387.307). Carriers can file a claim against it when a broker does not pay.

Is a new MC number always a scam?

No, but it means no payment history. Many carriers avoid high-value loads with very new brokers or ask for faster payment.

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