The carrier vetting checklist for small factoring companies

A carrier vetting checklist for a factor should cover eight stages: the application, the applicant's identity, operating authority, insurance, the bank account, UCC and NOA status, ongoing monitoring, and bank-change requests. The first six happen before the first advance. The last two never stop.

Use it as a starting procedure and adjust it to your book, your bank and your insurer. Small factors rarely lose money because they skipped an obscure check; they lose it because a standard check was skipped on a busy day.

• Legal name, any DBA, USDOT number and every MC or docket number the carrier holds.
• Formation documents and the state of organization, plus the IRS letter confirming the EIN.
• Names, titles and contact details of every owner and officer.
• Physical address and mailing address, with an explanation if they differ.
• Business phone and email, and how long the carrier has used each.
• Signed W-9 in the carrier's legal name.
• Main brokers and shippers, and the current or previous factor, if any.
• Bank account details for funding, which you will verify in Stage 5 rather than trust as given.
• Signed factoring agreement and written authorization to verify everything on this list.
• Whether the company official has claimed the USDOT record in FMCSA's Motus system, and who that official is.

Gaps are information. An applicant who can't name its previous factor, or whose email domain is a week old, has told you where to look next.

• Match a government-issued ID to a live selfie or video, not a photo the applicant emails you.
• Confirm the person is an owner or officer on the state business filing.
• Compare the person to the officers listed on the carrier's FMCSA record.
• Call the carrier on a phone number you found independently, not the one on the application.
• Check how long the phone number and email domain have been in use, and treat brand-new ones as a reason to dig.
• Search the company, its DBA and its officers on OFAC's Sanctions List Search.
• Record what you checked, the result and the date in the client file.

FMCSA's Motus system now requires new registrants to pass identity proofing with a government ID and a face scan. That verifies whoever registered the carrier, at that moment; it doesn't tell you that the person on your onboarding call is the same person. This stage is where you close that gap. The Motus guide explains what FMCSA does and doesn't check.

OFAC notes that its search tool uses approximate matching and is “not a substitute for undertaking appropriate due diligence,” so treat a possible match as something to resolve, not as a final answer either way.

• Operating authority is active and of the right type: a property carrier, not only a broker.
• The USDOT number is active, with no out-of-service order.
• Authority age is computed from the grant date, never from the size of the USDOT or MC number.
• Revocation and suspension history has been read in both the frozen legacy L&I data (to 2026-05-14) and the daily Motus data (since).
• Any reinstatement has an explanation that fits the history.
• A process agent (BOC-3) is on file.
• The MCS-150 hasn't been updated suspiciously close to the application date.
• No phone, email, address or officer is shared with revoked, suspended or out-of-service carriers.

Our free carrier check covers most of this list in one lookup, with the source dataset and date on each fact. Treat shared contacts with bad carriers as the strongest signal on the list, because that is how chameleon carriers usually show themselves.

• Liability coverage on file with FMCSA meets the federal minimum for the carrier's freight: $750,000 for for-hire carriers of nonhazardous property in vehicles of 10,001 pounds or more, and more for many hazardous materials.
• Cargo coverage meets what the carrier's main brokers require.
• The certificate of insurance came from the agent, not from the applicant.
• You called the agent on a number you found yourself and confirmed the policy is in force.
• You are listed to receive notice of cancellation.
• There are no recent cancellations or gaps in the carrier's insurance history.

FMCSA revokes or involuntarily suspends operating authority when a carrier fails to keep the required insurance on file, so a lapse can end a client's ability to haul overnight. A carrier that has lapsed before deserves a monitoring alert, not just a note.

• The account holder name matches the carrier's legal entity, confirmed through account-ownership verification or directly with the bank on a number you looked up.
• For a sole proprietor, the account holder is the owner whose identity you verified in Stage 2.
• The account isn't in the name of a third party, a dispatcher or an unrelated company.
• A voided check or bank letter is treated as a lead, not proof: both are easy to fake.
• A recently opened account gets extra questions.
• A second person approves the payee setup before the first advance.

This is the check that protects the money itself, and public FMCSA data can't do it. It also lines up with the ACH rules: Nacha's fraud-monitoring rules, in force for all non-consumer Originators since June 2026, require risk-based processes reasonably intended to identify payments that are unauthorized or authorized under “False Pretenses,” which Nacha defines to include misrepresenting “the ownership of an account to be credited.” Ask your bank how those rules apply to the way you originate payments.

Our Verified Payee product exists for this stage and Stage 8; small factors can request a pilot.

• UCC search run in the carrier's state of organization, using the exact legal name. Our UCC search directory links to every state's filing office.
• Any existing UCC-1 on accounts receivable is explained: a prior factor, a lender or an equipment financer.
• A prior factor's filing is resolved with a release letter and a UCC-3 termination or amendment, or a payoff, before you fund.
• Your own UCC-1 is filed.
• A notice of assignment goes to each broker or shipper you will collect from, and you have confirmation it was received.
• Each broker's records now show you as the payee for that carrier.

Two parts of the UCC drive this stage. Under §9-515, a filed financing statement is effective for five years after filing and lapses unless continued, so a filing from a factor the applicant left years ago may still be live. Under §9-406, once a broker receives an authenticated notice that a receivable has been assigned, it can discharge the debt only by paying the assignee, and the notice must reasonably identify the rights assigned.

Read UCC searches before you fund for the search itself. This is general information, not legal advice; ask counsel about your agreements and filings.

• Authority status, suspensions and revocations, checked daily from FMCSA's Motus data.
• Insurance cancellations and process-agent (BOC-3) cancellations.
• Out-of-service orders.
• Changes to the carrier's phone, email, address or officers in FMCSA records.
• Ownership changes, whether reported by the client or found in state or FMCSA records.
• New UCC filings against the client.
• Brokers reporting another factor's NOA, a payment to someone else, or a load your client says it didn't haul.
• Status re-checked on the funding date for every schedule, not just at onboarding.

The FBI's April 2026 warning on cargo theft describes criminals who take over a legitimate carrier's accounts and then change its contact information with FMCSA and update its insurance information. A contact change on an existing client is therefore not a formality. Treat it as a reason to call the owner you verified, on the number you verified.

• Never change payment details on the strength of an email, a phone call, a text or a document alone.
• Call the owner back on the phone number verified at onboarding, not one in the request.
• Confirm the person asking is the verified owner or officer, with a fresh identity check if anything feels off.
• Verify that the new account belongs to the carrier's legal entity, exactly as in Stage 5.
• Have a second person approve the change.
• Wait a set cooling-off period before the first payment to the new account, and tell the client through the original channel once the change is made.
• Log every step, including who approved it and when.

The FBI's advice to the freight industry is the right rule for this desk: familiar names or email addresses “alone do not confirm authenticity.” The bank-change checklist turns this stage into a printable procedure, and how to verify a remit-to change explains each step.