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  • Rosemarie DeWolf posted an update 5 months ago

    Overdrive: 12.10.2018
    CHANNEL 19
    Avoid getting stiffed: New flag on brokers with bonds pending cancellation can be effective recon tool user-gravatar.
    Todd Dills Dec 10, 2018
    L-and-I-(life and insurance) public-FMCSA-listing-showing-pending-bond-cancellation-2018-12-10-14-39.
    In early November, FMCSA stood up what amounts to a new flag on brokers/forwarders and motor carriers whose surety bonds/insurance have been marked for cancellation by the provider.
    This example of a new surety notice of pending cancellation is in the FMCSA’s Licensing and Insurance public-facing page for a broker who notified its surety provider, Transport Financial Services, LLC. It was voluntarily ceasing business at the end of the year, says TFS President Marold Studesville. Brokers whose bonds have been canceled after a run-up in claims, too, will be thus flagged, partially sealing a loophole that allowed dishonest brokers to conduct business with no intent to pay even as they went under — or were formed with no intent to pay to begin with. This example of a new surety notice of pending cancellation is in the FMCSA’s Licensing and Insurance public-facing page for a broker who notified its surety provider, Transport Financial Services, LLC. It was voluntarily ceasing business at the end of the year, says TFS President Marold Studesville. Brokers whose bonds have been canceled after a run-up in claims, too, will be thus flagged, partially sealing a loophole that allowed dishonest brokers to conduct business with no intent to pay even as they went under — or were formed with no intent to pay to begin with.
    “The goal is to help the public who does business with these regulated entities know that an insurance company or financial institution that made the initial filing has submitted a pending cancellation of the entity’s policy in our system,” said reps from FMCSA’s Licensing and Insurance division. “The notice will remain in place until either the effective date of the updated filing has occurred, or that the authority has been revoked, due to the failure to comply with the insurance requirements.”
    Transport Financial Services (TFS) President Marold Studesville notes the new flag will be helpful to carriers vetting fraudulent brokers who attempt to game the system to run up business within the 30-60-day window that can exist between the first claim on a broker’s bond and FMCSA’s ultimate revocation of the broker’s authority. The loophole was detailed in my February 2018 “Highway Robbery” feature in part about egregious fraud cases and more dishonesty in brokerage.

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