TransImpact Blog Listing

Detect and Prevent Parcel Fraud to Protect Your Shipping Costs

Written by Brian Byrd | Jul 11, 2025 11:36:43 AM
As e-commerce volumes surge and shipping activity grows more complex, so does the risk of parcel fraud. From unauthorized shipments to hidden billing discrepancies, fraudulent parcel activity is costing businesses millions—often without them realizing it.
 

And the worst part? Many carriers are now shifting the burden of fraud detection and dispute resolution onto the shipper. If you’re not proactively monitoring your parcel spend, you could end up footing the bill for someone else’s mistakes or fraud. 

What Is Parcel Fraud—and Why Is It Growing? 

Parcel fraud refers to unauthorized or fraudulent shipping activity billed to a legitimate shipper’s account—without their approval or knowledge. This could include stolen account numbers, fake third-party shipments, or errors that go unnoticed in carrier invoices. 

And the threat is accelerating: In 2024, freight fraud incidents rose by at least 50% year-over-year, with some areas seeing spikes as high as 200%, according to industry reporting. Shippers and brokers are being targeted by increasingly sophisticated schemes, including double brokering scams, fake carrier impersonations, and even ransomware-style operations where fraudsters hold loads hostage. 

These tactics cost businesses hundreds of thousands in direct losses and downstream disruptions. One report found that the average gross loss from a freight fraud incident reached over $400,000 in 2024. 

For business shippers, the message is clear: if you’re not actively monitoring your parcel spend, you may already be paying for fraud without even knowing it. 

How Carrier Terms Are Changing—and What That Means for You 

UPS has responded to rising fraud— but in ways that reduce its own liability rather than protect the shipper. 

In 2025, UPS updated its Tariff and Terms of Service especially Sections 51 through 53, making it harder to dispute fraudulent charges and placing full responsibility on account holders. 

Here’s what changed: 

1. Shipper Responsibility Is Now Mandatory

  • Shippers must monitor accounts regularly, and upon discovering unauthorized charges, immediately request a block on further shipping and billing. 
  • You must also provide written proof of unauthorized activity, submitted through specific UPS channels—online, via email, or by mail. 

2. 30-Day Dispute Window

  • Fraudulent charges must be disputed within 30 days of the invoice. After that, you forfeit your right to a refund. 
  • This is especially risky because many fraudulent shipments may not appear in billing systems for 30+ days—meaning your window could close before you even spot the problem. 

3. $10,000 Annual Refund Cap

  • UPS now limits fraud-related invoice adjustments to $10,000 per calendar year—aggregated across all related or affiliated accounts. 
  • This cap does not apply to Freight Collect or Third-Party Billed Charges, but only if proper blocking procedures were already in place. 

4. Strict Filing Procedures

  • Dispute requests must include the shipment date, tracking number, and a clear reason for the chargeback—and must be submitted through UPS’s designated channels. Partial payments or legal action do not count as formal disputes. 

5. “Good Faith” Clause

  • If UPS determines that your claims are baseless—or if you submit disputes in bulk without proper justification—it may deny all future requests from your account for a designated time period. 

6. Full Compliance = Mandatory

  • Failure to follow these procedures constitutes agreement to pay the invoiced amount in full. UPS has structured these terms to limit its own liability—with more responsibility placed on the shipper to detect and dispute unauthorized charges. 

 Compare UPS 2023 vs. 2025 Terms 

Is Your Business at Risk? 

Parcel fraud doesn’t just happen to the careless—it happens to companies that aren’t looking. Even sophisticated shipping operations can be exposed. 

Take this real-world example: A former University of Miami student used fake tracking numbers and return claims to defraud major retailers out of over $8 million. Thousands of unauthorized returns slipped through—because no one was watching closely enough. 

Now, ask yourself—where do you stand? 

  • Unaware: You assume fraud isn’t an issue. You’ve got an auditor—what else could go wrong? 
  • Apprehensive: You don’t want to challenge carrier charges and risk damaging the relationship. 
  • Procrastinating: You’ll deal with it later—even though your 30-day dispute window may close before you act. 
  • Proactive: You’re ready to dig into the data and recover what’s yours—before it’s too late.

How TransImpact Helps You Detect Parcel Fraud Fast 

Given these changes, it’s more important than ever for shippers to have robust systems in place to detect and address fraudulent activities promptly. TransImpact offers solutions to help businesses navigate these challenges:  

  • Proactive Monitoring: Our systems flag suspicious packages and charges promptly bringing them to your attention every week, enabling immediate action. 
  • Detailed Reporting: We provide comprehensive lists of questionable shipments, complete with necessary details to facilitate carrier disputes.  
  • Parcel Cost Variance Analysis: Our tools identify shipments that did not originate from your manifest systems, highlighting potential fraud of packages that your organization did not produce.  
  • Cost Reduction Opportunities: Beyond fraud detection, our services uncover additional areas for parcel cost savings.  

Take the next step—get your free fraud analysis or a 21-day free trial of our services, allowing you to assess the benefits firsthand. 
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