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Is this dispatch service legal? What are the red flags?

A dispatch service is legal without a broker licence only if it stays on the carrier's side: a written agreement with you, paid by you, not handling broker or factoring money, and not moving your loads to other carriers. If it fails those points it may be acting as an unlicensed broker.

Federal guidance from FMCSA (June 2023) lists nine things that point to "no broker authority needed" and seven that point to "broker authority needed". The lists are not exhaustive, and a service does not need to hit every item. Use the broker-authority self-check on this site to see how a service you are looking at scores.

The quick red flags for a carrier: the service wants to be paid by the broker or your factoring company instead of by you; it will not give you a written agreement; it books for you under its own MC number; it talks to shippers instead of brokers; it also represents several carriers and decides which one gets each load; it guarantees income; it charges a large setup fee or locks you into a long contract.

Why it matters to you: if a service is brokering without authority, the carrier can be pulled into the problem. Federal law sets a civil penalty of up to $10,000 per violation for knowingly authorizing or permitting unauthorized brokerage, and it can fall on companies and on their officers and principals.

Example. A desk offers to book your truck, takes the money from the broker, keeps its cut and sends you the rest. That is a payment-handling pattern FMCSA counts toward needing broker authority. A desk that books the load for you, you get paid by the broker or your factoring company, and you send the desk a 6% invoice each week looks like the safer pattern.

General information, not legal advice. Rules change. Check the sources and talk to a transportation lawyer before you sign or start.

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Last reviewed Thu, Nov 12, 2026 · Where our data comes from