Freight Forwarders - Fraud Library

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The intent of using freight forwarder checks is to ensure the shipping address where goods are being delivered is not a freight forwarder that may be shipping the goods or services to other destinations.

Other common names for these are: grey market shippers, mule, mules, PMB

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The intent of using freight forwarder checks is to ensure the shipping address where goods are being delivered is not a freight forwarder that may be shipping the goods or services to other destinations.

How Good Is It? 

Typically the freight forwarder check is used to make sure the goods or services you are providing are not being reshipped to a third party via freight forwarder. Fraudsters outside the U.S. like to use these freight forwarder services to make it look like they are coming from within the United States.

• There is a lot of inherent risk for goods and services being delivered to freight forwarder.

• Good tool to catch international fraudsters masking themselves as U.S. companies.

Considerations When Implementing or Buying This Functionality    

• How will the list of freight forwarders be compiled? Will the merchant try to compile it, or will they use an external service to provide this information?

• Does their service keep any data on fraud found with a particular freight forwarder?

• How often is their service updated with new numbers?

Estimated Costs – Typically this service is offered on a per-transaction basis, but you can also purchase it as a subscription. There are some very low cost providers online, that have hosted screens for you to input data manually as well. This service is usually fairly inexpensive.

Alternative Solutions – Fraud Scoring solution that includes this capability, Delivery Address Verification Service that provides associated phone data with an address. Do geolocation validation on the zip code or area code.

Vendors – , First Logic, Group One, Acxiom, InfoUSA

How Does it Work?  

If using it as a manual tool, you would enter the shipping address and phone information into a hosted screen or utility the IT shop has set up for the merchant. The service or application would come back with a response to indicate if the address was a freight forwarder or not.

How Do I Use the Results? 

Don’t be surprised if the phone number does not match for the address given, this will happen a lot where the fraudster uses a separate number to reach them, and the address of a freight forwarder for the goods.

This is a good tool to use with tools that provide geolocation data. If the consumer’s geolocation information on the IP address showed he was from outside the U.S. and the address and phone data showed that he was inside the U.S. and the address is listed as a freight forwarder, you probably have a fraudster. Make sure to hot list addresses of freight forwarders when you do get a fraud attempt or charge-back from their address and/or phone number.

Building This In-House 

Try to automate the lookup for freight forwarders, as it is easy to do, and if you use it with geolocation it can save you a lot of manual reviews.

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