Business, Forwarding, Freight News


Credit fraud on the rise, warns TT Club

[ April 14, 2025   //   ]

Credit fraud has become a major issue in the freight industry in the past 12 months, warns insurer TT Club.

Risk manager Josh Finch describes it as “primarily a financial risk as operators are left with freight costs that can’t be collected”. Losses can escalate quickly, he adds.

Criminals use different methods but they all prey on the priority of all operators to maximise revenue in a highly competitive commercial environment.

A brief example can help illustrate the dangers.  Finch explains: “A new customer approaches with a single shipment, for instance from Bangladesh to Spain. There is a suggestion this could be the start of a potentially large and lucrative contract.   A rate is agreed and a 60-day credit facility arranged. On completion of the shipment the freight account is settled within the agreed 60 days.”  

What follows, from the operator’s point of view seems favourable, as four more consignments of clothing are booked on similar terms to the first. Then the ‘sting’ is put in place as these consignments become urgent and must be sent by air. Several more air freight shipments occur regularly over a three-week period, all successfully delivered. 

However after that, communications to the customer go unanswered; the 60-day credit period expires, and the freight account goes unsettled. The operator is left with significant carrier costs and no revenue.

TT urges operators to carry out due diligence when advancing credit to new customers and points to advice from the British International Freight Association (BIFA).  Based on the unfortunate experiences of a number of its members, BIFA highlights similar characteristics of fraudulent ‘customers’:

  • The customer wants only airfreight; no customs clearance or delivery at destination required; completely new contacts, never previously engaged with operator; large volumes of cargo; customer accepts the quote without negotiation; and no record of customer ever importing or exporting previously on the UK’s HMRC Traders website

Finch emphasises: “Undoubtedly the best course is to withhold extended credit such as 60 days until a trusting relationship has been established with a customer. If commercial necessities dictate offering a more immediate credit facility then careful due diligence is vital. Full details of TT’s due diligence checklist is available at: Supply chain security 2024 guidance | TT Club – TT Club

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