By Luis Lopez, AI transportation consultant, CEO of Go Hub.io Holdings Corp and subsidiaries, and host of the Freight Guru Podcast
Payment redirection fraud is one of the quieter threats in freight. There is no stolen trailer and no missing pallet. Instead, a broker or shipper receives what looks like a routine email from a carrier, vendor, or customer saying the bank account has changed. The next payment goes to the new account, and the real payee never sees it. By the time anyone notices, the money is usually gone, and two legitimate businesses are left arguing over who has to absorb the loss.
How the Scheme Usually Works
The pattern varies, but the core steps are similar:
- A fraudster gains access to a real email account, or creates a look-alike domain that differs by a letter or two from the real one.
- They watch conversations or study invoices to learn who pays whom, how much, and when.
- They send a request to change remit-to information, often with a convincing letterhead, a void check image, or a bank letter.
- The payer updates its vendor records and sends the next payment, or several, to the fraudulent account.
- The real payee follows up on the unpaid invoice weeks later, and the fraud surfaces.
Variations include fake phone calls, voice impersonation, and requests that arrive through a carrier onboarding portal. The newer voice-based tactics are covered in deepfake voice fraud in freight.
Factoring and Notice of Assignment Confusion
Factoring adds a layer that fraudsters exploit. When a carrier factors its receivables, the factoring company typically sends the broker or shipper a notice of assignment instructing them to pay the factor instead of the carrier. That is a legitimate and common change in payment instructions.
The trouble is that a fake notice of assignment can look just like a real one. And when a carrier switches factors or ends a factoring relationship, there may be competing instructions. A payer who sends money to the wrong place can face a claim from the party that should have been paid. How assignment notices work, and why payers need to handle them carefully, is part of understanding factoring for trucking companies.
The safe practice is to treat any new or changed notice of assignment the same way you treat any other change in bank details: verify it independently before acting on it.
Callback Verification to Known Numbers
The single most effective control is a callback using contact information you already had on file, not information provided in the change request. A sound procedure looks like this:
- Never update bank details based only on an email, even if it comes from a familiar address.
- Call the payee using a phone number from your existing records, the original onboarding packet, or a public source you trust.
- Speak with someone you can identify and ask them to confirm the change and the account details.
- Require a second internal person to approve the change before it takes effect.
- Hold or flag the first payment to a new account until the payee confirms receipt.
- Notify the payee through the old, known channel that a change was made.
Pressure is a red flag. Requests that are urgent, arrive late in the day, come with a new contact person, or push you to skip normal steps deserve more scrutiny, not less.
Contract Clauses on Changing Payment Instructions
Broker-carrier agreements, shipper contracts, and vendor terms can address payment changes directly. Clauses worth considering include:
- A required procedure for changing remittance information, such as written notice plus verbal confirmation through a designated contact.
- A statement that payment made according to verified instructions satisfies the payer’s obligation.
- An obligation for each party to notify the other promptly if it suspects its email or systems have been compromised.
- Allocation of loss when one party’s compromised systems lead to misdirected payment.
- Requirements for how notices of assignment must be delivered and confirmed.
Clear terms will not stop a fraud attempt, but they give both sides a shared rulebook and make it easier to resolve the dispute if money goes astray. A broader look at drafting these agreements is in broker-carrier agreement clauses.
Who Bears the Loss
There is no single rule that decides liability in every case. The outcome depends on the contracts between the parties, the applicable law, and the specific facts. Questions that often matter include:
- Whose systems were compromised? If the fraudster sent the request from the payee’s real email account, the payee’s security may be at issue. If a look-alike domain was used, the payer’s verification process may be scrutinized.
- Did the payer follow its own procedures and any procedure required by contract?
- Were there warning signs, such as a new account in a different name or region, that a reasonable business should have questioned?
- Was a valid notice of assignment in place, and did the payer honor it?
- Did either party delay reporting the problem in a way that made recovery harder?
Because the answer turns on contracts and facts, businesses on both sides of a payment should assume they could be the one left holding the loss and act accordingly.
Documentation Matters
If a payment is misdirected, the record you keep before and after the event will shape what happens next. Preserve:
- The original change request, including full email headers.
- Your vendor record history showing when and by whom the bank details were changed.
- Notes of any callback, including who was called, the number used, and what was said.
- Payment records and bank confirmations.
- The timeline of when the fraud was discovered and reported.
Act quickly when fraud is suspected. Contact your bank immediately to attempt a recall, notify the other party through known channels, and report the incident to law enforcement. Speed improves the odds of recovering some or all of the funds.
Crime and Cyber Insurance
Insurance can help, but coverage for payment redirection is not automatic. Commercial crime policies and cyber liability policies may treat social engineering or funds transfer fraud differently, and some cover it only through a specific endorsement with its own limits and conditions, such as requiring verification procedures. Review your policies with your agent to understand what is covered before an incident happens. The broader picture is covered in cyber liability in trucking and logistics.
Where AI Fits
As an AI transportation consultant, I see detection tools as a useful second layer. Systems can flag look-alike domains, unusual changes in sender behavior, or a new bank account that does not match a payee’s history. They should feed a human review, not replace the callback.
Bottom Line
Payment redirection fraud succeeds when a single email can change where money goes. Independent callback verification, dual approval, clear contract terms, careful handling of assignment notices, good records, and the right insurance make that much harder and put your business in a stronger position if it happens anyway.
For more conversations on freight and AI, subscribe to the Freight Guru Podcast.
About the author: Luis Lopez is a Miami-based AI transportation consultant and logistics entrepreneur, the CEO of Go Hub.io Holdings Corp and subsidiaries, and host of the Freight Guru Podcast.
This article is general information for the freight community, not legal advice. Talk to a transportation attorney about your specific situation.
