By David Jencks, Jencks Law, P.C.
Every factor’s onboarding checklist has a line that says something like “verify authority and insurance on FMCSA.” For years, that check was quick and mostly reliable. Right now, it is neither.
The registry is still broken
FMCSA’s new Motus registration system has had a rough rollout. On October 26, FMCSA Deputy Administrator Jesse Elison told a FreightWaves forum that the fix is “really weeks and not months,” but gave no date for a full repair, FreightWaves reported. He admitted the system is blocking “more people than just the bad actors we intended it for.” FMCSA has waived some registration requirements, and Elison’s advice to registrants was blunt: “If you don’t need to go in, don’t go in yet.”
When the agency itself is telling people to stay out of the system, a lender can’t treat the system’s output as the last word.
Meanwhile, the data keeps moving
Even while Motus struggles, the records churn. In the week of October 19 to 25, according to CarrierScrub’s count of FMCSA’s Motus data, 1,276 operating authorities went inactive, 51 of them brokers. Liability insurance dropped off 2,273 authorities. Fifty-one surety bonds or trust funds went off file. And 67 carriers changed their phone, email and address on the same day, a classic sign of a possible identity takeover.
That is one week. A carrier that checked out clean at onboarding can lose its insurance or authority a month later, and a broker you are counting on to pay can lose its bond.
Fraud doesn't wait for the fix
Fake receivables are the oldest trick in factoring, and it still works. On October 21, the IFA’s Commercial Factor reported that a California man pleaded guilty to wire fraud after submitting fraudulent invoices to a New Jersey factor. The customers on those invoices owed his company nothing, and the factor advanced more than $4.6 million. That case wasn’t a trucking case, but the method translates directly to freight: invoices for loads that never moved, owed by brokers who never booked them.
Freight adds its own twist: hijacked carrier identities. The same CarrierScrub week flagged a federal case over an alleged $12 million cargo theft scheme built on hijacked carrier identities. If the registry is slow and the contact data changes overnight, a fraudster can look legitimate on paper for longer than he should.
Legal tidbit: authority is a condition of the deal
A carrier that hauls interstate freight for hire without registration violates 49 U.S.C. 13901. Most factoring agreements make valid authority and insurance a warranty. Breach of that warranty usually gives you recourse against the client, but recourse against a vanished fraudster is worth what you can collect, which is often nothing.
Legal tidbit: the debtor's defenses travel with the invoice
Under UCC 9-404, a factor generally takes an account subject to the debtor’s defenses arising from the underlying deal. If the load never moved, the broker owes nothing, to the carrier or to you. A notice of assignment doesn’t create a debt that never existed.
What to do now
Verify with the debtor, not just the registry. Confirm the load with the broker before you fund, ideally through the broker’s own portal or a direct call to a known number. A real rate confirmation tied to a real load is worth more than a clean FMCSA screen.
Re-check monitoring daily, not just at onboarding. Watch for insurance cancellations, authority changes and contact-data changes. A same-day change of phone, email and address should trigger a call before the next funding.
Confirm insurance with the agent. A certificate can be stale or fake. A short call to the producer listed on it settles the question.
Check payment instructions every time they change. Treat any request to send funds to a new account as a fraud flag until you’ve confirmed it through a channel you already trust.
Document the work. If a deal goes bad, your file should show you verified the carrier and the load independently, not just that a government website said yes.
The other side
The fair pushback: Motus problems are temporary, and FMCSA says the system is improving. The current friction mostly hits new entrants trying to register, not established carriers you already know. And good factors were never relying only on FMCSA data; they verify loads with brokers and confirm insurance directly as a matter of routine.
All fair. If you already do all of that, this is a reminder, not a fire drill. But the registry has always worked as a shortcut, and shortcuts get used when volume is high and staff is thin. For now, the shortcut is unreliable. Make the independent check the rule, not the backup.
This article is general information, not legal advice.
