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Check fraud in trucking leaves agencies with unrecoverable upfront payments
In a common setup, agencies bind a standard load policy after a trucker’s check is submitted, then later face losses when the check bounces as insufficient funds within the clearing window.
Insurance Business describes a recurring check fraud pattern in the trucking sector, where agencies may not realize the process until after payment fails.
In the scenario outlined, a trucker needs coverage for a specific load, the carrier binds a standard policy, the trucker writes a check, and the haul is completed before the check returns within the period for it to clear.
Insurance Business says the check comes back as insufficient funds, even though the insurance was already used and is therefore no longer needed, leaving the agency holding what Applied Systems president of strategic business units Chase Petrey calls the minimum initial payment, or MIP.
Petrey told the outlet that agencies are losing money on payment fraud in trucking, because the bad check can be returned after the trucker has already completed the haul.