A valid MC number tells you a carrier is registered. It does not tell you whether the carrier has a history worth trusting. That gap is where a lot of freight fraud lives.
What Continuous Authority Tells You
Operating authority is the federal permission for a company to haul freight for hire. Getting it is not difficult, and that is part of the problem. A carrier can apply, receive a USDOT and MC number, and be operating legally within a short window. Nothing in that process requires a track record.
This is why SCS requires at least 365 days of continuous FMCSA operating authority before we clear a carrier for standard booking. The standard is not a federal rule. It is an internal threshold that reflects a simple principle: a legitimate carrier accumulates a visible history over time. Inspections, insurance renewals, safety data, and the ownership record all leave a trail. A carrier that is only a few months old has had little opportunity to build that trail, and a fraudulent one has every reason to keep its footprint short.
The FreightWaves guide to spotting fraud makes the same point in plainer terms: new carriers are not automatically bad, but zero history can spell trouble. Brokers are advised to verify newly issued authority directly against FMCSA records before engaging the carrier.
Why New Authority Is a Higher-Risk Signal
New authority is not evidence of fraud. It is evidence of missing information. When a carrier has been operating for six months, you have six months of data to evaluate. When it has been operating for six weeks, you have almost nothing, and the decisions you make on that thin record are essentially guesses.
The risk compounds when the carrier is also asking for loads at competitive rates, pushing for fast booking, or resisting verification steps. Those behaviors are common in legitimate new businesses too, which is why the vetting process has to look at the full picture rather than any single flag.
What Fraudsters Do With New Authority
Fraud rings use several approaches, and most of them depend on the same weakness: a carrier that looks real on paper but has no history behind it.
Fictitious carriers. In one federal case out of the Northern District of Illinois, the defendants created multiple fictitious carriers, obtained USDOT and MC numbers for them, and then used those carriers to win contracts from legitimate brokers. The carriers existed only as paperwork and phone numbers, and the freight was never meant to reach its destination.
Buying dormant or reinstated authority. Rather than applying for new authority, some rings now purchase inactive MC numbers or dormant carriers and reactivate them. The number carries credibility because it appears legitimate, even though the operation behind it is new. A 2025 analysis by WTW describes recently activated or reinstated MC numbers with no operating history, and changes in ownership of MC numbers, as warning signs that warrant investigation.
Chameleon carriers. DAT’s cargo theft and double brokering research describes carriers that repeatedly change identity to avoid scrutiny. FMCSA refers to them as chameleon carriers, and they frequently have two or three prior MC numbers. Each new number starts with a clean slate, which is precisely what makes it useful to a fraudster.
Reincarnation after enforcement. Authority is also used to get around sanctions. In one case reported by the DOT Office of Inspector General, a Louisiana woman allegedly tried to restart a company under a new USDOT number and authority after its out-of-service order, and falsely stated on the application that she had no relationship with any other FMCSA-regulated entity in the prior three years. A new authority application is the simplest way to attempt that kind of restart.
Cloned and borrowed identifiers. Fraudsters often pair new authority with cloned MC numbers, stolen insurance certificates, and professional-looking email domains. A carrier that presents a valid-looking certificate and a current authority number may still be borrowing both from a real company.
The scale of the problem is significant. The Transportation Intermediaries Association’s State of Fraud in the Industry report estimated per-load fraud costs above $40,000, and about a third of the reported fraud cases were linked to double brokering or other unlawful brokerage activity.
Red Flags That Often Travel With New Authority
New authority rarely shows up alone. The most useful signals are the ones that suggest a carrier’s identity is less stable than it claims. Watch for recent changes in ownership, address, or insurer. Watch for an MC number on the driver’s paperwork that does not match the number the broker was given. And watch for mismatches between what a carrier says it operates and what the data shows. Highway has identified that mismatches between cash flow patterns and equipment usage data is a red flag for double brokering. A carrier that claims a fleet but has no verifiable equipment or ELD activity deserves scrutiny regardless of how long its authority has existed.
How SCS Applies the 365-Day Standard
Under SCS’s carrier qualification procedure, a carrier with less than one year of continuous authority is not an automatic disqualification, but it does trigger a manager override process. The override requires live tracking, a copy of the driver’s CDL, the VIN of the equipment, and a conversation with the driver before a load is released. Each requirement addresses a specific risk: tracking confirms the truck is where it says it is, the CDL and VIN tie the carrier to real equipment and a real driver, and the conversation tests whether the driver knows the company they claim to work for.
Review the Supply Chain Solutions Carrier Vetting Checklist>>
When a Manager Override Might Be Justified
An override should be the exception, and it should be earned by evidence rather than by a carrier’s willingness to sign paperwork. Legitimate new carriers do exist. A owner-operator who has spent years driving for a verified carrier and is now starting a company is a different case from a shell entity with no prior history. The distinction matters, and it should be documented.
A reasonable override case usually has several elements in place. The carrier has a verifiable physical and digital footprint, or an active ELD connection through Highway. Its insurance has been confirmed directly with the insurer rather than accepted from a certificate alone. The principals’ ownership history has been disclosed and checked, including any connection to previously out-of-service entities. The equipment matches the VIN, the driver’s identity and CDL are verified, and the carrier has agreed in writing to live tracking. The load itself is appropriate for a carrier with limited history, meaning a lower-value or lower-risk move rather than a high-value shipment on a lane that is frequently targeted.
Equally important is knowing when to decline. It’s not a good practice to override when: 1) the ownership history links the principals to a carrier that was previously shut down, 2) when identifiers do not match across systems, 3) when the carrier resists live tracking, or 4) when the carrier is also carrying another flag such as broker authority, a non-domiciled driver, or an identity alert. Those combinations are the pattern fraud rings rely on, and an override in those cases gives the fraud a legitimate-looking exception.
The Bottom Line
Continuous authority is not a perfect filter, and a year of history does not guarantee legitimacy. But it sets a baseline that makes fraud more expensive to execute. Carriers that clear 365 days have had time to show who they are. The best practice for carriers that do not meet the 365-day requirement is to make them earn their way through a documented, evidence-based override.
If your provider cannot explain how they handle carriers with less than a year of authority, what documentation they require, and who signs off on exceptions, that is a useful question to ask at your next review.
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