Double brokering

FMCSA has noted that double brokering is not a term defined by statute or regulation, and that most people who use it mean entities acting as brokers without proper authority. The fraud version adds deception: a fake or borrowed carrier identity takes the load, re-posts it at a lower rate, collects from the original broker, and never pays the carrier who actually hauled it.

For a factor it cuts both ways. If your client is the double broker, the invoice you bought is for a load your client never hauled, and the real carrier's claim against the broker can freeze payment. If your client is the victim, it hauled for someone posing as a broker, and the debtor you are relying on may owe nothing. Non-recourse terms typically exclude both cases.

A broker is a person who, for compensation, arranges transportation by an authorized motor carrier (49 CFR 371.2). FMCSA has said it can pursue penalties for unauthorized brokerage only through the Department of Justice. See double brokering from the factor's side.