Freight Forwarding Scams Explained: How to Spot and Avoid Shipping Fraud

Freight forwarding scams cost UK businesses millions of pounds every year. The International Chamber of Commerce estimates that trade-related fraud runs into billions globally, and the UK is not immune. For someone new to shipping, handling supplier relationships, booking freight, and managing documentation, these scams are a real and present danger.

This article explains exactly how freight forwarding scams work, what the warning signs look like, and what you should do to protect your business. It is written for people who are new to the industry, so every term is explained clearly.

Table of Contents

1. The Reality of Freight Fraud, How Common Is It?
2. The 8 Most Common Freight Forwarding Scams
3. Fake Freight Forwarder Scam, How to Spot a Fraudulent Company
4. Cargo Theft. Physical and Cyber
5. Bill of Lading Fraud, How It Works
6. Invoice Fraud and Payment Diversion
7. Customs Fraud. Undervaluing and Misdescription
8. Online Supplier Scams That Affect Shipping
9. Red Flags. Warning Signs of a Freight Scam
10. How to Verify a Freight Forwarder Is Legitimate
11. What to Do If You’ve Been Scammed
12. How to Protect Your Business
13. A Real-World Example
14. Frequently Asked Questions
15. Key Takeaways

The Reality of Freight Fraud — How Common Is It?

Freight fraud is not a rare edge case. It is an everyday risk for anyone moving goods across borders.

Action Fraud, the UK’s national fraud and cybercrime reporting centre, records thousands of business fraud cases each year, and freight-related fraud is a growing category. Cargo theft alone costs the UK logistics industry an estimated £250 million annually. Invoice diversion fraud, where criminals intercept payment details, costs UK businesses hundreds of millions more.

The problem has grown because international trade has moved online. Bookings are placed by email. Contracts are signed digitally. Payments are transferred electronically. Each of these steps creates an opportunity for fraud.

If you are new to shipping, you may not yet recognise what a legitimate transaction looks like. That makes you a target. The good news is that most freight scams follow predictable patterns. Once you know what to look for, you can spot them quickly.

The 8 Most Common Freight Forwarding Scams

Here is a quick overview of the main types of freight fraud you are likely to encounter.

1. Fake freight forwarder: A company poses as a legitimate freight forwarder, collects your payment, then disappears. Your goods are never shipped.
2. Invoice diversion fraud: A criminal intercepts your email correspondence with a supplier or forwarder and changes the bank account details on an invoice. You pay the criminal instead of your supplier.
3. Bill of lading fraud: Fake or altered shipping documents are used to release cargo or get payment against a shipment that does not exist.
4. Cargo theft: Goods are stolen in transit, from warehouses, lorry parks, or ports. This can be physical theft or cyber-enabled through hijacked tracking systems.
5. Advance fee fraud: you are asked to pay fees upfront before your shipment is released or processed. Once you pay, the requests keep coming, or the contact disappears.
6. Customs fraud: A forwarder deliberately misdeclares your goods to reduce duty. This saves money in the short term but leaves your business legally liable.
7. Online supplier scam: you find a supplier online, place an order, pay a deposit or full amount, and the supplier vanishes. The goods are never manufactured or shipped.
8. Switch and bait: The goods that arrive are inferior to what was agreed. The supplier or forwarder substitutes cheaper products after payment has been made.

Each of these is explained in more detail in the sections below.

Fake Freight Forwarder Scam — How to Spot a Fraudulent Company

The fake freight forwarder is one of the most common scams targeting new shipping coordinators. The setup is simple. A criminal creates a company that looks like a legitimate freight forwarder. They may clone the branding of a real company, register a similar-sounding name, or build a professional-looking website in a matter of hours.

They then target businesses looking for freight services, often finding them through online directories, LinkedIn, or cold email. They offer competitive rates, respond quickly, and seem professional. Once you pay, they go silent. Your goods are never booked.

How to spot a fake forwarder:

• Their website has no physical UK address, or the address does not check out on Google Maps
• They have no verifiable Companies House registration number
• They are not members of BIFA (the British International Freight Association)
• They push you to pay by bank transfer immediately, often to a new account
• Their email domain does not match the company name on their website
• They avoid phone calls or video meetings
• They have no verifiable reviews, or their reviews are very recent and generic

Research into freight forwarding fraud has found that many fake operations set up a company and open accounts with legitimate logistics providers. They run the scam using net payment terms, collecting money from victims while letting their own supplier bills go unpaid. They then dissolve the company and start again under a new name.

Cargo Theft — Physical and Cyber

Cargo theft happens in two ways: physical and cyber-enabled.

Physical cargo theft is exactly what it sounds like. Goods are stolen from lorry parks, ports, warehouses, or in transit. The UK has several high-risk hotspots. Motorway service areas in the Midlands and South East are particularly vulnerable. Unsecured overnight parking is one of the most common points of loss.

High-value goods such as electronics, pharmaceuticals, and food products are the most targeted. A single theft can cost a business tens of thousands of pounds. If your goods were not insured correctly, you may have no recourse at all.

Cyber-enabled cargo theft is a newer and growing threat. Criminals gain access to cargo tracking systems, port systems, or freight management platforms. They use this access to redirect shipments, falsify collection orders, or pose as authorised parties to pick up goods at the port.

What you can do:

• Use only BIFA-member freight forwarders with verified security procedures
• Ensure your goods are covered by appropriate cargo insurance. Do not assume the forwarder’s liability covers the full replacement value
• Require multi-factor authentication on all logistics platforms
• Never share login credentials by email

Bill of Lading Fraud — How It Works

A bill of lading (B/L) is one of the most important documents in international shipping. It is issued by the carrier and serves three functions: it is a receipt for the goods, a contract of carriage, and a document of title. Whoever holds the original bill of lading has the legal right to claim the goods at the destination port.

This makes it a target for fraud.

How B/L fraud works:

• A criminal creates a fake bill of lading, making it appear that goods have been shipped
• They present this document to a bank or buyer to get payment or draw on a letter of credit
• The goods either do not exist or have already been sold to another party
• The buyer pays, and receives nothing

B/L fraud is especially common in trade finance transactions involving letters of credit or documentary credit. Banks release funds against the document. If the document is fake, the buyer loses their money.

In some cases, a legitimate B/L is altered after the original is issued. The consignee name, port of discharge, or quantity is changed.

What you can do:

• Use electronic bills of lading (eBL) where possible. These are harder to forge
• Verify the issuing carrier directly, not through the forwarder alone
• Work with your bank to check documents carefully before releasing payment
• If you are using a letter of credit, ensure it requires verified shipping documents from named carriers

Invoice Fraud and Payment Diversion

Invoice diversion fraud, sometimes called business email compromise (BEC), is one of the most financially damaging scams in freight. Here is how it works.

A criminal monitors email correspondence between your business and a supplier or freight forwarder. At the point when an invoice is about to be sent, they intercept the email or send a near-identical one from a spoofed address. The invoice looks genuine: same logo, same layout, same wording. But the bank account details have been changed. You pay what appears to be a legitimate invoice, and the money goes directly to the criminal.

By the time you discover the fraud, the funds are usually gone. Banks rarely recover transferred money in these cases.

Real-world cost: A single invoice diversion fraud can cost a UK business anywhere from £5,000 to over £500,000 depending on the shipment value and how quickly it is detected.

What you can do:

• Always verify new or changed bank details by phone, using a number you have on file, never a number provided in the email
• Set up a two-person authorisation rule for payments above a set threshold (for example, £2,000)
• Use email security tools that flag spoofed domains
• Train your team to recognise phishing emails. Look for subtle changes in the sender’s address, such as an extra letter or a different domain extension

Customs Fraud — Undervaluing and Misdescription

Customs fraud happens when goods are deliberately misdeclared to reduce the import duty or VAT payable. This can be done by undervaluing the goods, using an incorrect commodity code (HS code), or misdescribing the product entirely.

Some importers do this knowingly to save money. Others have it done without their knowledge, by a dishonest forwarder acting in their name.

Why this matters to you:

HMRC holds the importer legally responsible for the accuracy of customs declarations, regardless of who filed them. If your forwarder misdeclares goods in your name and HMRC investigates, you are the one who faces the fine, the back-payment of duty, or the seizure of goods. In serious cases, HMRC can pursue criminal charges against the importer.

The penalties are significant. Undervaluation or misdescription can result in fines of up to three times the unpaid duty, plus interest. Goods can be seized at the border with no compensation.

What you can do:

• Never instruct a forwarder to undervalue your goods or use an incorrect HS code, even if they suggest it will save everyone money
• Ask your forwarder to provide a copy of every customs entry they file on your behalf
• Check that the declared value on each entry matches your commercial invoice
• Use a BIFA-member forwarder. Members are bound by a professional code of conduct

Online Supplier Scams That Affect Shipping

Not all freight scams start with the forwarder. Many begin with a fake supplier.

You find a supplier on a B2B marketplace or through a Google search. They have a professional website, a wide product catalogue, and prices that seem very competitive. You request a quote, exchange a few emails, and place an order. They ask for a deposit, sometimes the full amount, by bank transfer. You pay. Then nothing happens.

The supplier does not exist, or exists only as a shell. The goods are never manufactured or shipped. Your money is gone.

This scam is particularly common when:

• The supplier is based overseas and cannot be visited easily
• The price is well below every comparable quote
• They ask for full payment before any contract is signed
• They communicate only by email or messaging apps
• Their website was registered very recently

What you can do:

• Request a video call before committing to any major order
• Use a trade platform with buyer protection where possible
• Pay by letter of credit rather than bank transfer for new suppliers. This gives you document-based protection
• Use a sourcing agent or third-party inspection service to verify the supplier before payment is made

Red Flags — Warning Signs of a Freight Scam

Use this checklist when evaluating any new freight forwarder or supplier. If you see two or more of these signs, stop and investigate before transferring any money.

About the company:
– No verifiable UK address, or the address is a virtual office with no physical presence
– No Companies House registration, or the registration is very recent (under six months)
– Not a BIFA member or member of another recognised trade body
– Website with poor grammar, generic stock photos, or no named staff
– Email domain does not match the company name on their website

About the quote or deal:
– Price is well below every other quote you received
– They push you to commit quickly, “we need to book today”
– They request payment to a new or different bank account
– They ask for payment by bank transfer only, with no other options
– No written contract or terms and conditions provided

About the communication:
– They avoid phone calls or video meetings
– They respond only outside normal UK business hours
– Their phone number is a mobile only, with no landline or office number
– They use a free email provider (Gmail, Yahoo) rather than a business domain

About the documents:
– Documents look slightly off: different fonts, misaligned logos, inconsistent formatting
– Invoice bank details differ from those you have previously used with this company
– Tracking numbers do not resolve on the carrier’s official website

How to Verify a Freight Forwarder Is Legitimate

Before booking any freight with a new forwarder, run through these four checks. They take ten minutes and can save you thousands of pounds.

1. Check Companies House

Every legitimate UK freight forwarder is registered at Companies House. Go to find-and-update.company-information.service.gov.uk and search for the company name or registration number.

Check that:
– The company is active (not dissolved or in liquidation)
– The registered address matches what they have given you
– The company has been trading for a reasonable length of time
– The directors and filing history look credible

2. Check BIFA Membership

BIFA, the British International Freight Association, is the main UK trade body for freight forwarders. Members must meet professional standards, hold appropriate insurance, and abide by the BIFA Standard Trading Conditions.

Search for members at bifa.org. If a forwarder claims to be a BIFA member but does not appear in the directory, do not use them.

BIFA membership is not a guarantee of perfection, but it is a strong indicator of legitimacy. Most established UK forwarders are members.

3. Verify Their Physical Address

Search their registered address on Google Maps. Does it look like a real office or warehouse? Call the number on their website and confirm you are speaking with someone at that location. If the call goes to a mobile voicemail or is not answered during business hours, treat that as a warning sign.

4. Confirm Bank Details by Phone Before Every New Payment

This is the single most effective defence against invoice diversion fraud. Before transferring money to a supplier or forwarder for the first time, or any time their bank details change, call them on a number you have independently verified. Do not use a number from the invoice or the email. Confirm the sort code and account number verbally.

This one step catches the vast majority of payment diversion attempts.

What to Do If You’ve Been Scammed

If you suspect you have been the victim of a freight scam, act immediately. The faster you move, the better your chances of recovering funds or limiting further damage.

Step 1: Contact your bank immediately

Call your bank’s fraud team and tell them you have made a payment to a fraudulent account. Ask them to initiate a Faster Payments recall. UK banks operate a voluntary reimbursement scheme for authorised push payment (APP) fraud. The sooner you report it, the higher the chance of a recall succeeding.

Step 2: Report to Action Fraud

Report online at actionfraud.police.uk or call 0300 123 2040. You will receive a crime reference number. This is important for any insurance claim and any later police investigation.

Step 3: Report to HMRC if customs fraud is involved

If you believe a forwarder has misdeclared goods in your name, report it to HMRC’s fraud hotline: 0800 788 887. You can also report online through gov.uk.

Step 4: Contact the National Crime Agency

For large-scale or organised freight fraud, the NCA handles complex economic crime. Submit a report via nationalcrimeagency.gov.uk.

Step 5: Notify your insurer

Check your trade credit insurance or cargo insurance policy immediately. Document everything: emails, invoices, bank transfer records, all communications. Your insurer will need this for any claim.

Step 6: Preserve all evidence

Do not delete emails, even if they are embarrassing. Do not confront the scammer. This can prompt them to disappear faster. Save all correspondence, screenshots, and documents in a secure location.

How to Protect Your Business

Prevention costs far less than recovery. These are the practical steps every shipping coordinator should put in place.

Build a verified supplier and forwarder list. Only use companies that have passed your due diligence checks. Document your checks and keep them on file. Do not let urgency or a good price cause you to skip this process.

Create a payment authorisation process. No payment above a set threshold, for example £1,000, should go out without a second person approving it and verbally confirming the bank details.

Train your team regularly. Invoice diversion fraud relies on people acting quickly without checking. Brief your colleagues on what to watch for. Even a five-minute team update can stop fraud before it happens.

Secure your email. Enable multi-factor authentication on all business email accounts. Ensure your domain uses DMARC, DKIM, and SPF records to prevent criminals from spoofing your address.

Get the right insurance. Cargo insurance should cover the full replacement value of your goods, not just the carrier’s limited liability. Specialist freight insurance brokers can advise on appropriate cover levels.

Use BIFA-member forwarders. BIFA membership brings professional standards, trading conditions, and a clear complaints process. It significantly reduces your risk exposure compared to using an unverified provider.

Read the BIFA Standard Trading Conditions. These set out the legal terms under which BIFA-member forwarders operate, including liability limits. Knowing these helps you understand what you are and are not covered for before a problem arises.

A Real-World Example

Here is a scenario that reflects how many UK SMEs encounter freight forwarding fraud for the first time.

A small UK clothing retailer, call them Broadfield Apparel, needed to import a container of garments from a manufacturer in Turkey. Their usual forwarder was fully booked, so they searched online for an alternative and found a company called “UK Global Freight Solutions”. The company had a professional website, a UK phone number, and a competitive quote.

After a brief email exchange, Broadfield Apparel agreed to proceed and paid a £4,200 deposit by bank transfer. The forwarder sent a booking confirmation and what appeared to be a bill of lading. Two weeks later, when the goods were due to arrive, the forwarder stopped responding. The phone number went to voicemail. The website disappeared.

Broadfield Apparel reported to Action Fraud and contacted their bank. The bank traced the payment to an account opened just three weeks earlier, almost certainly a mule account. The money was gone.

What they should have done:

• Checked Companies House before paying. The company had been registered just six weeks earlier with no filing history
• Searched the BIFA member directory. The company was not listed
• Called the forwarder’s phone number from a number found independently. The “UK office” number rang to a mobile with an overseas voicemail greeting
• Verified the bill of lading directly with the carrier named on the document. The carrier had no record of the booking

The direct loss was £4,200. But the delay also cost Broadfield Apparel their peak-season stock delivery and a retailer contract worth around £18,000 in lost revenue. The total real-world impact was more than £22,000, from a ten-minute due diligence check that was never done.

Frequently Asked Questions

What is a freight forwarding scam?

A freight forwarding scam is any fraudulent scheme that exploits the international shipping process to steal money or goods. This includes fake freight forwarders who collect payment and disappear, invoice diversion attacks that redirect payments to criminal bank accounts, and document fraud using fake bills of lading.

How do I know if a freight forwarder is legitimate?

Check their Companies House registration, verify their BIFA membership at bifa.org, confirm their physical address on Google Maps, and call them on a number you have found independently, not one they have provided. A legitimate forwarder will welcome due diligence without hesitation.

What should I do if someone changes bank details on an invoice?

Stop. Do not pay. Call your supplier or forwarder on a number you already have on file, not the number in the email, and ask them to confirm their bank details verbally. If the details have genuinely changed, get written confirmation from a named director, then verify again by phone before making any payment.

Is invoice diversion fraud covered by insurance?

It depends on your policy. Some business insurance policies include cover for cyber-enabled fraud or business email compromise. Check with your insurer. If you are not currently covered, specialist policies are available from around £300 to £600 per year for small businesses.

What is BIFA and why does it matter?

BIFA stands for the British International Freight Association. It is the UK’s main trade body for freight forwarders. Members must meet professional standards, hold appropriate insurance, and operate under the BIFA Standard Trading Conditions. Using a BIFA member does not eliminate all risk, but it provides a clear accountability framework and a complaints process if something goes wrong.

Can I recover money lost to a freight scam?

It is possible but not guaranteed. The fastest route is through your bank’s fraud team. If you report quickly, they may be able to recall the payment. Action Fraud handles the crime report, which you will need for insurance purposes. Some funds are recovered through civil proceedings if the fraudster can be identified. Payment fraud insurance, if you hold it, is typically the most reliable recovery route.

Are customs misdeclarations always deliberate?

Not always. Mistakes happen, particularly with complex commodity codes. But HMRC distinguishes between genuine errors and deliberate fraud. If you discover a misdeclaration, correct it proactively with HMRC rather than waiting for them to find it. A forwarder who suggests misdeclaring goods to save duty should be dropped immediately.

Where do I report freight fraud in the UK?

Report to Action Fraud at actionfraud.police.uk or call 0300 123 2040. For customs-related fraud, contact HMRC on 0800 788 887. For large-scale organised freight fraud, report to the National Crime Agency at nationalcrimeagency.gov.uk.

Key Takeaways

• Freight forwarding scams cost UK businesses millions of pounds every year. They are not rare.
• The most common scams are fake forwarders, invoice diversion fraud, bill of lading fraud, and cargo theft.
• Always check Companies House and the BIFA member directory before using a new freight forwarder.
• Never pay a changed bank account without verbally confirming the details by phone first.
• A price that seems too good to be true almost always is.
• If you are scammed, contact your bank immediately, then report to Action Fraud.
• Prevention is far cheaper than recovery. Build a due diligence process and apply it every time.
• HMRC holds the importer responsible for customs declarations, not just the forwarder. Know what is being declared in your name.