Trucking Risk and Insurance Podcast

Driver Inc and Driver Fraud

March 04, 2022 John Farquhar & Chris Harris Season 2 Episode 19
Trucking Risk and Insurance Podcast
Driver Inc and Driver Fraud
Show Notes Transcript Chapter Markers

John and I revisit quickly the Driver Inc, info and then the real topic is TRUCK DRIVER FRAUD during application time. How is it happening and how to prevent you being and your company a victim.

CRA "Truck Drivers" webpage:

Driver Inc Video:

John Farquhar
Summit Risk Solutions:
1 226 802-2762

Chris Harris
Safety Dawg Inc:
1 905 973 7056

Hey, good morning, everybody. It's 10:00 AM and we are live trucking risk and insurance podcast this week. We're talking about driver Inc, and drivers who commit fraud in the application process. So I will put a link to the previous video where John and I did talk about driver Inc. And because it was, it's a topic that is very hot at the moment. Right now. Let me bring John in and we're going to talk about that for just a minute. Good morning and joining. Hey, Good morning, Chris. Good morning, everybody. Welcome to the trucking risk and insurance podcast here. This is pretty cool. Yeah. Hey virtual. Yeah. John, you remember that? I reached out to, who did I reach out to? Her name was Hannah and I shut my email down, but media relations for the government. And I asked for a guest to discuss driver Inc on the podcast and not surprisingly the government declined. Yes, they did send us an email about driver Inc. And what did you think about that? Fantastic. Informative, revealing email. Sorry. Yeah. It's yeah. All it did was basically directly to their website. Yes. And it is this website that they direct us to, Which, which don't get us wrong is, is great information. It's it's still, it, it helps to define the drive rink driving model, but it's not what we were looking for because we'd heard other things. So Well, we had heard in that truck news article and where you at that? The fleet safety council meeting where the lady spoke? Yes, Because I asked her some very pointed questions. So yes, I was there. Oh, you Were the bad guy. The, I was the bad guy asking the questions. Yes. I was very inquisitive. Yeah. It didn't quite get the answers I was looking for, but nonetheless, That's not what I wanted. But anyway, the, the, we we'll put on here, we'll make that just a little bit smaller. So that lady implied that CRA was going to crack down this year and they had 40 companies that were, they knew of that were substantial companies and they were going to crack down on the driver Inc. And it could very well affect the owner operator model, which yes, the driver Inc model get rid of it. I'm all excited about that. The driver or the owner operator model would drive a real serious impact to the truck. So anyways, yeah, I did put the link to this website for truck drivers and for trucking companies in the show notes, I would encourage you to go there and take a look at it. It is very informative. It just, it's not new. That, that's what I was hoping for was something a little bit. Yeah. Yeah. Well, it's kind of funny because I I've had a number of customers go well, if they just had some rules around this driver Inc model, we could follow them. And I'm like, there are the rules. Are there guys? Here's the website I shared the link. The problem is there's no enforcement of these rules, which revenue, Canada or IES ECDC is supposed to be getting on board with. So that's what we're waiting for is the enforcement and then see how the enforcement rolls out. So Yeah, I mean, as you see here, they've got neutral facts and other facts. I forgot what they call them, but you know, here, I just pulled up here indicators that a worker is an employee, you know, requires the truck driver to accept all loads and trips assigned to them, requires a truck driver to follow a specific route. Well, these are kind of the things that we all most trucking companies say, here's your route, here's your load driver. Go get them. And basically the driver has one of the other things that points out is the driver has no costs. You know, who's paying the fuel, who's paying the insurance, things like that. So anyways, it's, it is an informative website. And I do think, you know, the relations people that I forgot what branch of the government she works for, but the media release, Oh, sorry. You know, for keeping us informed, it just wasn't anything new or terribly exciting, but I was hoping for it. Yeah, exactly. Exactly. We're so close. So close. I do want to switch subjects now let's switch subjects and let me bring, bring in sneaky, Pete. See, oops. Sneaky peach shrunk. Well that's cause he was running away. Right? I tried to make a sneaky Pete here because we want to talk about fraud. You had an incident this week. There we go. All right. Tell the people what the heck happened. So not surprising, you know, we've seen this before, but this was an opportunity to help the client and help them to better understand. So a situation arose with a risk evaluation that I did hear the other day. And in all my risk evaluations, one thing I asked for is driver abstracts and then a list of drivers, date of hire, date of birth, blah, blah, blah, blah, blah. So I could do some comparison investigation. And this one driver in particular had gotten his license in late 20, 21. He had completed his melt program, his road test and whatnot. And then they hired him in January through a driver service, a personnel service, I guess you could say. And interestingly enough, with the, the documents that I received, that it's specified that they don't hire anybody unless they have at least two years of driving experience. So I really thought this was odd when they stated very strongly, they don't hire anybody with two years experience yet here's a driver who barely has six months and they hired him through an agency. So, so that was what spurred it. And then in sitting with the customer, I brought it up and I explained why they targeted this driver. And they said, well, no, no, that's wrong because the driver has over two years experience. I said, oh really? Okay, please provide evidence to that. And interestingly enough, they pulled up the driver file as we were going through it. And they pulled out the abstract, they received from the agency who sent over all the paperwork. And interesting enough on the abstracted showed that the driver had completed his melt training and his road test in 2019 yet the current abstract stated 20, 21 sneaky Pete getting through. So yeah, so it was kind of all of a sudden it left us asking a bunch of questions and I brought this to the insurance attention and they're like, this is weird. Why, why would this be like this? And I said, well, let's look at the document here. Let's look at it. Interesting enough. On the current driver abstract, there was a driving violation for speeding in 2020, interestingly enough, it was not listed on the other driving abstract that they had received prior to hire. And interesting enough, the date on that abstract as to when it was pulled was late 2021. So it was like, wow, they pulled off the speeding violation and they changed the dates of his, his, his melt training and his road test. So we got looking at it some more and I said, okay, here's a really, really funny anomaly that get the paper properly. You can see that this document has been altered and what it was is on the bottom of the abstract. As we know, there's, you know, you're going to full abstract on the page of every abstract is a footer note from the ministry. Okay. Which, which kind of gives a disclaimer, interestingly enough, on this document in particular that we, we have deemed as being altered, that footer was up at the bottom of the text, not at the bottom of the page, like all the other pages, even though there was a big gap in there, it was a footer note while they had it. Obviously it looks like they've cut out a section, moved it up, but didn't do a good enough job because they didn't keep that footer to the bottom. So They weren't even good at committing the fraud. However, they were good enough, the guy, huh, Exactly it, you know, from a, from a quick glance, it was, it was enough to fool somebody who didn't realize that that footer should be at the bottom and that something's going on. So what this helped us to determine was regardless of the document that you get from the driver or from the agency in this case, you need to pull your own as well. You know, whether you have a third party, pull it on your behalf or you pull it yourself because you need to confirm that the document you received is not been altered or fraudulent. Well that, and also let's do some due diligence here. If an applicant comes in and applies for a job within the first, I would suggest 90 days because most companies do give a new applicants, a 90 day probation period. You should be upholding your own abstracts. And then secondly, what it's really important that you know how to read that abstract. So what would, you know, put you on the spot here, but what are some of the highlights that somebody should be looking for on an abstract? Well, interesting enough, same client, different driver. You want to go down through that list, right? From the top of the page that describes the driver's information, this driver's license number, does it have enough numbers as it should, should start with a letter for Ontario, you know, the sex licensed classification and stuff along that line. Interesting enough. This one driver, he had a G license yet he drives an a it's like, whoa, we're driving it. He drives a tractor trailer. So he should have an, a license. And we're like, whoa, whoa, whoa. This guy has got a G how long has he been on the road? Well, he's worked for us for 20 years. Well, why didn't nobody catch this? Well, they caught it because I told them the night before I wanted to look at this driver file during the evaluation and they were just sort and stuff and they caught it and I said, you caught it now. So they called the driver and funny enough, the driver turned 65 late last year. So he was now required to do an annual road evaluation. Okay. And a medical. Well, unfortunately the MTO is holding up his medical. They were able to get ahold of the MTO. Yes. The day before and found out the MTO was holding up the medical because it was ineligible or allegeable in legible. They couldn't read it. The copy that got faxed over to them or emailed over, didn't come through clear enough. Well, they sent a letter to the driver three months ago and the driver ignored the letter because he thought, oh, my company sending the medical, I don't need to worry about it. Well, if he had opened it, they would have said, Hey, we need a new copy of your medical. So what they did is they downgraded his license from an eight to a G and he was in the U S making his way home. And just to be clear there, you misspoke about a required of a road test. When you turn 65, you, don't not that got changed a while ago being over 65. I know you annual medicals are required. Right. And the road test has gone by the wayside Because interesting enough on his that's right. You're you're correct. I forgot about that. But interesting enough, on his abstract, he did have a road test completed. So I'm not sure why now, but he just turned 65. Now I know you've got to do a road test. If you have a certain number of violations or collisions or something like that. But, but he had nothing, it was clean. It just said, road test. So I'll have to go back and figure that out. But nonetheless, so, so you're looking, the information you're looking for is to make sure that it is correct and accurate information and making sure that he is licensed. And then the other thing that you're looking for is down in the body of the context below the license information you're now looking for, does it list his medical, any conditions the driver may have like the Zed endorsement by have to wear glasses or something along that line. But also in that area, if that driver is eligible to travel to the us, it will not state that. It will just say everything's okay. But if the driver's not eligible to go to the U S for medical reasons, he has epilepsy hearing impairment or a waiver on his license. It will actually specify in there that the driver cannot travel to United States. Now that's only an Ontario from what I understand right now, the other provinces aren't doing that. But it doesn't actually say you can't go to the states as a commercial driver. How has it record it? Because you've got to know how to read it. Right. Right. Well, yeah. Cause it's, it has something it's about, you're not eligible to operate a commercial motor vehicle. Well, no, it's got the endorsement of a why isn't it? Yeah. But no, I don't. It actually does say it. It will say you're not eligible to actually say you're not eligible to travel to the United States operating a commercial motor Vehicle. I've never seen one of those. Yeah. I've Seen a couple of them there. They're very rare. They're very rare to be honest with you, but nonetheless, and then, and then below that is going to list your, any violations. You may have collisions you were involved in that you were charged for, not and that's, and I'm talking the MVR, which is the personal abstract. So a couple of key things to be checking for is the name, the class of license, the expiry date, the endorsements, and the medical expiry date for records. Those are, and that's coming off the top of my head. I may have missed something, but certainly class of licenses rather important. Well, and an interesting enough to add to the fraudulent side where I'd mentioned that footer should be at the bottom of the page. There's also a little phrase that says end of document. Right? So if it's a one page, it should say, end of document. If not, it should say continued. And then there'd be a second page. Well, and just to add to the fraud thing, we've all heard about fraud. Fraud is prevalent. Even I gotta say this is 25 years ago when, oh God, it's longer. Oh, it's a long, long time ago. When I was a recruiter, I was interviewing a driver and he gave me his driver's license and it looked and felt perfect. The only problem was when I looked at it, I happened to notice that he had a female's driver's license number. And so when I inquired, he said, well, my name is so common. They had to make up a new number. And yeah, so anyways, I conducted the interview as normal, of course, inside my alarm, bells are ringing like crazy. And after that gentleman left, I phoned the police to say, Hey, you know, this is what happened. The police were at my door in 20 minutes. They just happened to be looking for this driver because they, I guess immigration Canada had this driver on the list to be ousted from the country. And they said, you wouldn't happen to have a copy of that driver's license. Would you? And of course, we've just gotten, this is how old, this was our color photocopier. And it was our standard operating procedure to take a photograph of every applicant. Right. That was just what we did against the height chart. So the police were very impressed with our, but that's our SOP standard operating procedure, everyone who I had a height chart in my office and every applicant we just made stand against the height chart and take a photograph because it helps identify somebody, you know, what's our height. Yeah. What do you know? Yeah. But without height chart had helped a lot. I mean, I can't remember in this particular case, if it was a Polaroid or whether we've just bought our digital camera, that's a lot, but I felt this driver's license and there was nothing wrong with it. Wow. The number fraud's been going on for years, you've got to watch for it. The last thing I want to talk about John, is that you mentioned this driver came from an agency. Yes. Okay. So what did this cost, what did your trucking customer, so the end user of that driver, what steps did they take to make sure the driver met their minimum? Because, sorry, let me go back a bit. When I hire a driver agency, I want to specify to the driver agency, these are my hiring standards. I want 50 years of experience and the drivers got to be older than 90. What, whatever it is, obviously I'm being a little bit ridiculous, but you want to issue your hiring standards to that company, to your driver agency company, because the insurance company that you have, obviously he's going to ensure that driver and you told your insurance company, these are your standards. You didn't say these are my standards, but I don't care about the agency. Right? So anyways, what happened here with the agency? So they have worked with this agency previously and they had conveyed. So their, their conveyance was their standards are this and the driver must meet those standards. Unfortunately, when the agency provided them a certain amount of documentation, they didn't verify that documentation. I guess you could say they did take the driver for a road test. And it made comment in their road test document that the driver was very good, you know? And he was a very diligent young man, but that was about as far as they went, they basically believed all the information that was provided and then thought there was no need to go any further. Unfortunately, when we talked about it, it was like, but you're missing a lot of information for what's required in a driver qualification file. And they felt well that wasn't their responsibility. They felt that was the agency's responsibility. And unfortunately, when we talked about the ownership of responsibilities, it's their ultimate ownership of the responsibilities to meet the regulations and requirements. So there's drivers operating in and out of the U S so he has to meet the requirements of FMC USA. And with that, they didn't have enough documentation in the file to confirm that. So one of the perfect opportunities that we discussed was previous references. There was a page that listed the references, but there was no documentation to say that the references were followed up. So couple of things there, let me ask you this skill testing question. I know, you know, the answer, but for our listeners, It's three it's three, three. All right. So if first of all, when can MTO walk into your office? What do they have to make an appointment? Oh, no. They just have that probable cause and they'll show up, Right? So they can show up at any time. And if they showed up at this carrier's office, is it possible that they could say, let me see this driver's file. And the fact that he's from an agency, does that matter? Nope. Nope. You're still responsible. So that means what if I can interpret the trucking company is supposed to have a full and complete file on their premises for that dryer, even though he's agency, Even though he's agency. So yep. Read the rules and rule say that it doesn't matter where the driver comes from because you know, th th the driver agency has zero responsibility here. It's the motor carrier, the motor carriers, the ultimate employer. And who's paying the bill, should this inexperienced unqualified driver crash. Oh, that would be the trucking company. Yeah. It would be really an interesting lawsuit. When the trucking company sues the agency saying you didn't follow our protocol, but in this case, we have no evidence that the agency was complicit in the fraud. Right. So we don't Know if the driver fooled the agency or whether the agency help the driver running. We got no idea. I mean, certainly a legit agency wouldn't but not every truck company, not every safety consultant is legit. Right. And unfortunately, you know, we, we came to some assumptions on this because of the background of the agency. We won't name them by any means, but it has a reputation. And then on top of that, the driver did inform the employer, not the agency, the employer that the agency was paying him as driver, Inc again, is all wrong because the employer is expecting a driver who is going to be taken care of, because the idea of using an agency is like a payroll service, right? I'm paying you extra money to make sure that the driver has WSAB coverage. You're going to be taking his taxable deductions as required. And you know, if you say that he's got benefits, then that's cool because they are paying a substantially higher price for this driver than they are their own drivers. So it does it. Doesn't that just wrap it up in a bow. You, John, you brought it right back to the beginning when we're talking about driver, Inc. So driver Inc. Read the website. We put the link in the show notes down below driver, Inc. If you're interested in that, we talked about fraud, it's still happening today. John mentioned that in this case, the phone numbers weren't even legit. I've had the funniest one I had when I phoned one of the phone numbers is I dial the phone number and immediately the person starts speaking to me. I hadn't even introduced myself and they're going, oh yes, very good driver, very good drivers. And I'm saying, oh, hi, my name's Chris. And I'm from this trucking company. And I like to do a reference, so please do your due diligence out there fraud. And I can get duped just like anybody. But in this case, it was pretty evident with a little bit of research that this fellow was stretching you, you said six months experience. And he claimed two years. Yeah. Well, and, and, and one other piece of evidence I want to throw in there to make sure that people to help cross-reference is the driver's license. They had a copy of his driver's license, which was funny because it said that his license was issued in 2021, not 2019 when it said on the original abstract. So, you know, it's, it's, again, back to the evidence it's, it's, cross-reference look at it and then realize, so they could've picked it up right away when they hired the guy, if they'd looked at it and compared it. But again, they were relying on the agency to do all the Dylan's. I did the due diligence and the agency's not paying the big bucks. So, And I'm pretty sure that their contractual agreement says you have to hold us harmless of anything. I would be positive that's in need. However, there probably is a whole harmless, but I wonder what a lawyer could do if they could prove fraud. Exactly, Exactly. I think I'm sure that would defunct the, the contract by all means for you, But it would be difficult to prove fraud. I suspect. However, if it was a multi-million dollar loss, you might want to spend the money. Anyhow. Yeah. So, Well, it comes back to what you and I talked about before, regardless of whether it was the agency that caused us fraud or the driver that caused this fraud, the agency did not do their due diligence. If it was the driver who caused the fraud, they didn't follow up properly. So they're still held liable to a certain extent, but they're not going to be held viable for the crash, because that becomes the responsibility of the motor carrier for hiring that driver through the agency. Yeah. It's just, it's crazy. Anyways, fraud, watch out for fraud. Watch out for fake driver's licenses, altered documents. If you look at the CVR document, compare the records on the CVR to the application form because they have companies listed, pulled the PSP report and do the same comparison and then do your references. Yep, exactly. Johnny, I think we're right at 29 minutes. Oh my God. It is a good start to the weekend. And we do have some guests coming up because unfortunately this week's guest had a family emergency and had to cancel, but we've got a couple of really cool guests coming up very shortly. You won't listen to John and I as much, but yeah, No, no. We'll ask a few questions and we'll let them speak. Beautiful. Johnny, have a great weekend. All right. You too, Chris, take care of everybody and make sure to hit the subscribe button and the lake bell or the like button and subscribe and like hit them all. Yeah, let me hit that there. We'll we'll hit that. Come on now, come on. There we go. There is this subscribing, like you're doing a good job, Johnny. That's why you're on the show. Oh, there you go. Hey, if you don't like this show hit the donate button twice. Perfect. That wraps that one up. All right. Thanks everybody. That's another episode of the trucking risk and insurance podcast. Your host John Farquhar of summit risk solutions and myself Chris Harris safety docs. That's it for this week seeing next Friday.

Driver Inc
Driver Fraud