---
title: "Double factoring"
url: https://carrierkyc.com/glossary/double-factoring
description: "Double factoring is selling or pledging the same invoice, or the same receivables, to two or more factors or lenders, so each believes it owns the payment."
---

# Double factoring

**Definition:** Double factoring is selling or pledging the same invoice, or the same receivables, to two or more factors or lenders, so each believes it owns the payment.

Also called: Duplicate factoring, Double financing, Duplicate invoicing. Category: Fraud.

It happens in a few ways: the same invoice on schedules at two factors, a spot sale of invoices already covered by a whole-ledger factor's lien, or receivables pledged to a merchant cash advance lender and then sold to a factor. Each funder thinks it owns the payment, and only one can get it.

The UCC sets the order. Competing perfected interests generally rank by time of filing or perfection (§9-322), so the factor with the earlier [UCC-1](https://carrierkyc.com/glossary/ucc-1) usually has the better claim. The broker, meanwhile, discharges its debt only by paying the assignee that notified it under §9-406, so two [NOAs](https://carrierkyc.com/glossary/notice-of-assignment) for one carrier usually mean a broker holding payment until the factors sort out who is owed.

> **Red flag: Red flags** A recent UCC-1 from another factor or funder against your client. A broker saying another factor's NOA is on file. A client that factors only some loads from a debtor it uses every week. The same load or BOL number appearing twice. A client that resists a [UCC search](https://carrierkyc.com/tools/ucc-search) or a verification call.

Factors can't see each other's schedules, so the practical defenses are UCC searches at onboarding and periodically after, NOA confirmation on every [verification call](https://carrierkyc.com/glossary/verification-call), and the steps in the [double factoring guide](https://carrierkyc.com/guides/double-factoring-fraud). General information, not legal advice: priority disputes turn on facts, so involve counsel early.

## Related

- [Double factoring: how it happens and the checks that stop it](https://carrierkyc.com/guides/double-factoring-fraud)
- [Two NOAs, one carrier: when another factor claims the same invoices](https://carrierkyc.com/guides/conflicting-noas)
- [UCC-1 financing statement](https://carrierkyc.com/glossary/ucc-1)
- [Notice of assignment (NOA)](https://carrierkyc.com/glossary/notice-of-assignment)
- [50-state UCC search directory](https://carrierkyc.com/tools/ucc-search)

## Sources

- [UCC §9-322: Priorities among conflicting security interests](https://www.law.cornell.edu/ucc/9/9-322) (Cornell LII)
- [UCC §9-406: Discharge of account debtor; notification of assignment](https://www.law.cornell.edu/ucc/9/9-406) (Cornell LII)