Didyou know

Freight Forwarders are also known as gray market shippers and mules.

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 a 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 a freight forwarder. It's a good tool to catch international fraudsters masking themselves as U.S. companies.

 

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Freight Forwarderstechnique overview

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: gray market shippers, mules, PMB

Key considerations when implementing or buying this functionality include:

  • 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?

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 you 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., 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.

additionalresources

  • OVERVIEW OF ECOMMERCE FRAUD PREVENTION TECHNIQUES.

    A core curriculum course providing an introduction to 30 plus fraud prevention techniques; what they are, high level discussion on how to employ them and big picture considerations for using them.

  • Introduction to Ecommerce Fraud Fundamentals.

    Provides participants foundation level knowledge about the theories, best practices and terminology surrounding electronic payment fraud. Presented in a standard format covering the history of eCommerce Fraud, consumer fraud, merchant fraud, fraudster motivation, fraud trends, identity verification and phishing.

  • Ecommerce Fraud Moving from Tools to Solutions.

    This session covers what constitutes a fraud solution and categorizes the many types of third party fraud tools. The course outlines the common terminology of fraud solutions and describes the capabilities needed to implement a fraud solution.

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keynotes

  • 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.
  • 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.
  • 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.
  • Sample Vendors -