35 min
FMCSA moves on carrier/broker-registration overhaul to tamp down fraud: Detail, potential problems Overdrive Radio
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- Business
"We're going to clean up the bad actors that are in our system now." FMCSA registration office director Ken Riddle.
Ken Riddle's office handles applications for authority, updates to carrier and other entity data, third-party access to the system, BOC3 filers’ access, and more. In this podcast for April Fool’s Day, we’re not fooling around -- big changes to how carriers interact with the FMCSA’s registration system are on the way, aimed at rooting out bad actors FMCSA now at the least fully acknowledges are registered in the system today: https://www.overdriveonline.com/regulations/article/15666936/fmcsa-to-overhaul-registration-system-to-stamp-out-fraud
We’re talking all those organized double brokers and affiliated carrier entities, identity fraudsters and others. Today hear Riddle’s full talk from the Mid-America Trucking Show with an eye to give you at least some clarity on what to expect, particularly when identity and business verification tools come into play for what Rddle described as a clean-up of the entire population of currently registered carriers, brokers, forwarders and others. Part of what he had to say at MATS caught the ear of more than one Overdrive reader, too, with potential problems for sole-proprietor owner-operators. To wit, as Alex Lockie's report on the session summed up what Riddle had to say:
"FMCSA plans, in short order, to implement identification and business verification tools into the registration system, not allowing registrants to proceed until they've proven their identity and that their business exists and is registered with the IRS or the state."
It's not 100% the case that every state requires sole proprietors in self-employed situations (such as many owners) to formally register, as noted W. Joel Baker, longtime owner-operator and insurance agent and a regular contributor to our Overdrive Extra series. As sole proprietors, formal registrations outside the payment of self-employment taxes and/or other business taxes, whether with the state or IRS, aren’t always in play, Baker pointed. “We 'sole proprietors,'" he said, often “do not have, nor are we required to have, a business that is 'registered' with the IRS" for an EIN or with the state in some cases.
If business verification procedures within FMCSA’s registrations aren't implemented with a consideration made for such businesses, Baker added, “it will have a massive negative impact on the industry,” not to mention for any individual owner “cleaned up” through the process with authority revocation or other outcome.
Riddle had more to add about business verification, too, though, noting that the agency is looking for a third-party contractor to help with the verifications and that it’s fairly early days for the process. Overdrive also queried FMCSA directly about the situation Baker brought up. A rep there stressed the agency is still researching what data is available to validate businesses against, and hopes "all business scenarios can be accommodated. ... We believe the data is available, but we are still gathering details.”
Keep tuned on that front. And mark your calendars for May 29 for the agency’s next public engagement session, too, where you can bring your own ideas for ways to root out double brokers and other fraudsters who’ve been taking advantage of gaps in the system for many years now. Find information about the session via this link: https://www.overdriveonline.com/regulations/article/15667504/fmcsa-planning-stakeholder-day-on-registration-changes
Also mentioned in the podcast, Lockie's report from attorney Hank Seaton and Dale Prax's presentation centered around registered-entity fraud: https://www.overdriveonline.com/regulations/article/15667297/fighting-the-trucking-fraud-networks-in-fmcsas-registration-system
"We're going to clean up the bad actors that are in our system now." FMCSA registration office director Ken Riddle.
Ken Riddle's office handles applications for authority, updates to carrier and other entity data, third-party access to the system, BOC3 filers’ access, and more. In this podcast for April Fool’s Day, we’re not fooling around -- big changes to how carriers interact with the FMCSA’s registration system are on the way, aimed at rooting out bad actors FMCSA now at the least fully acknowledges are registered in the system today: https://www.overdriveonline.com/regulations/article/15666936/fmcsa-to-overhaul-registration-system-to-stamp-out-fraud
We’re talking all those organized double brokers and affiliated carrier entities, identity fraudsters and others. Today hear Riddle’s full talk from the Mid-America Trucking Show with an eye to give you at least some clarity on what to expect, particularly when identity and business verification tools come into play for what Rddle described as a clean-up of the entire population of currently registered carriers, brokers, forwarders and others. Part of what he had to say at MATS caught the ear of more than one Overdrive reader, too, with potential problems for sole-proprietor owner-operators. To wit, as Alex Lockie's report on the session summed up what Riddle had to say:
"FMCSA plans, in short order, to implement identification and business verification tools into the registration system, not allowing registrants to proceed until they've proven their identity and that their business exists and is registered with the IRS or the state."
It's not 100% the case that every state requires sole proprietors in self-employed situations (such as many owners) to formally register, as noted W. Joel Baker, longtime owner-operator and insurance agent and a regular contributor to our Overdrive Extra series. As sole proprietors, formal registrations outside the payment of self-employment taxes and/or other business taxes, whether with the state or IRS, aren’t always in play, Baker pointed. “We 'sole proprietors,'" he said, often “do not have, nor are we required to have, a business that is 'registered' with the IRS" for an EIN or with the state in some cases.
If business verification procedures within FMCSA’s registrations aren't implemented with a consideration made for such businesses, Baker added, “it will have a massive negative impact on the industry,” not to mention for any individual owner “cleaned up” through the process with authority revocation or other outcome.
Riddle had more to add about business verification, too, though, noting that the agency is looking for a third-party contractor to help with the verifications and that it’s fairly early days for the process. Overdrive also queried FMCSA directly about the situation Baker brought up. A rep there stressed the agency is still researching what data is available to validate businesses against, and hopes "all business scenarios can be accommodated. ... We believe the data is available, but we are still gathering details.”
Keep tuned on that front. And mark your calendars for May 29 for the agency’s next public engagement session, too, where you can bring your own ideas for ways to root out double brokers and other fraudsters who’ve been taking advantage of gaps in the system for many years now. Find information about the session via this link: https://www.overdriveonline.com/regulations/article/15667504/fmcsa-planning-stakeholder-day-on-registration-changes
Also mentioned in the podcast, Lockie's report from attorney Hank Seaton and Dale Prax's presentation centered around registered-entity fraud: https://www.overdriveonline.com/regulations/article/15667297/fighting-the-trucking-fraud-networks-in-fmcsas-registration-system
35 min