One unfortunate fact of managing a fleet of vehicles is that you most likely will have to deal with fuel fraud. Fuel fraud is an increasingly common form of fraud, and one that can be incredibly costly for companies. However, fuel fraud can be easily dealt with by implementing simple checks, and monitoring your statements for the telltale signs.
If you are not sure how to do that, you’ve come to the right place.
In this article, we’ll discuss what constitutes fuel card fraud, how people commit it, and the strategies you can adopt to prevent it.
Fuel Card Fraud
As fuel cards become more widely used in the transportation sector, fraud has also increased, harming companies of all types. The issue of fuel fraud is one of the most important concerns fleet managers must address. In this day and age, these frauds could have devastating consequences on fleets, which already struggle because of the high cost of fuel.
Using a fleet fuel card, such as the Multi Service Fuel Card, simplifies the lives of drivers. When the driver fills up, they can save money at the pump thanks to computerized billing, thorough transaction records, and several other program options. But what if drivers misuse fuel cards by refueling more than just their vehicles? In most cases, the fraud occurs when one of the drivers uses their card to purchase fuel for another vehicle.
Businesses that use cars spend a lot of money on fuel, and fuel fraud can steal time and money that you can’t afford. Fuel fraud includes a variety of crimes that some individuals commit from the fuel use of a fleet. Fleets are typically safer when utilizing gasoline cards, but scammers can still take full advantage of them using the following methods:
- The vehicle’s fuel tank can be drained using automatic pumps, then refilled.
- When filling up their business vehicle, drivers can also fill up a different container and put it on their fuel card.
- Cashiers and drivers could collaborate to defraud the organization. In this case, the driver can request that an excessive amount be applied to the fuel card in order to split the overpayment.
It’s usually easy to identify these fuel card scams since the invoice costs will be higher than expected. The problem is that fraud is often discovered after the fact, so it is often too late to do anything about it.
The term “fuel fraud” covers both fuel card fraud and petrol theft. Internal fuel fraud can happen to businesses when, for instance, drivers misuse gas or use fleet cards to purchase cigarettes or foodstuffs. “Slippage” is the term for this unethical conduct.
Using lost or stolen cards, data leaks, and phishing scams are all examples of external fuel fraud that can affect businesses. Another risk is skimming, when criminals install software or hardware tailored to steal card details from cash machines and POS terminals. In the meantime, you can prevent fuel theft by watching for red flags and implementing prevention measures.
How People Commit Fuel Card Fraud
Knowing precisely what to watch out for will help you prevent fuel card fraud. Fraudulent fuel card scenarios include:
- Fuel is added to non-fleet vehicles by the driver.
- The driver takes the fuel card to buy food and beverages. The driver is irresponsible and fails to notice that the automated process charged twice or made a technical glitch.
- Hackers install a skimming device on one of the pumps and then take the card’s data.
Fuel Card Red Flags
Fuel fraud is not usually blatant; thus, it is beneficial to implement routine monitoring controls. Monitoring expenditures can assist in identifying fuel fraud early on before criminals have a chance to earn significant amounts.
Beware of these indicators in your business data that could alert you to fuel card fraud, fuel theft, and other problems:
- Keep an eye out for frequent fill-ups when reviewing your fuel card data and receipts. Internal fuel fraud may take the form of stealing fuel from a company vehicle, filling up a personal car with company fuel, or using a fleet vehicle for personal use.
- Fuel costs do not match with tank capacity or mileage. Fuel purchases that do not align with the business vehicle’s mileage or tank capacity may also be signs of internal fraud.
- You notice a charge coming from an odd place. Based on their routines and schedules, most regional drivers will fill up at the same gas station or a small number of stations. Keep track of the locations of gas stations, and check any filling station where your drivers don’t typically stop for purchases.
There are numerous types of fuel fraud, and receiving receipts must be compared with the car specifications in order to detect suspicious activity.
A Fleet Manager Survey Says
As many as 93% of fleet managers feel that specific drivers are engaged in potential fraud, while more than 25% of drivers have claimed to see dishonest behavior at work, according to a Shell report titled “Fraud Matters.” According to the Shell survey, about 65% of fleet managers of company cars view fuel-related theft as a big problem for their firm, and nearly 48% believe it should be done to address the issue.
As a small to a medium-sized business owner or fleet manager, it might not be easy to see trends early if you depend on paper receipts and log books. However, using back-end reports and analytics you can easily reveal and act on fraud.
However, a few common hurdles keep fleet managers from undertaking the required steps. The study revealed that:
- More than 35% of fleet managers lack driver awareness.
- 32% don’t have enough time to engage in fraud investigations, and 30% lack the necessary resources.
- 20% find that the data needed to detect gasoline fraud is missing.
- 19% of people don’t think the threat is severe.
According to Shell, 48% of fleet managers believe that enhancing procedures to prevent fuel fraud might lower fuel costs by 5% or more, so spending time and money on fleet management may be worthwhile.
Strategies For Fuel Card Prevention
What precautions can companies take then to lessen the danger of card theft and counter the fraudsters’ ever-evolving strategies? In order to achieve the highest levels of security, card issuers, fleet managers, partners, and card users need to work together. Preventing fraud before it starts is the best scenario, and there are several ways to do so:
- All drivers should be required to provide a personal identification number (PIN) and a vehicle number before using a fuel card: The adoption of this policy will require all drivers to provide personal information before they are allowed to withdraw petrol. A driver could theoretically enter their PIN and unit number at a different pump to fill up for another motorist, but doing so would draw attention to a claim over who was monitoring fuel card activities.
- Limit the daily fuel spending cap by pre-funding your fuel card or setting a daily spending limit: The best method to stop your drivers from assisting other drivers on the road may be to restrict their access to money. The driver won’t be able to assist in filling up another truck on the road if there is just a fixed quantity of fuel that can be spent out of concern that they won’t be able to finish the route and consequently lose money.
- Inform drivers of the penalties of fuel card fraud: Fraudulent behavior by a driver is not only bad for the business; it is also against the law and can result in job loss.
How to Check if Your Employee or Driver is Involved in a Fraudulent Act?
Although it’s preferable to stop fraud before it starts, there are situations when it isn’t possible. If fraud does occur, it’s crucial to recognize it right away so you can take action. Monitoring your statements and knowing what to look for are the keys to figuring out whether a fuel card is being utilized improperly.
Keep a watch on the number of daily fill-ups a driver or employee makes. If they frequently happen in one location, there’s a significant chance that something is fishy. In some cases, double billing can occur in the same visit, but it still needs to be monitored.
You should be aware of the amount of fuel needed by the cars in your fleet. A truck that gets 5 miles per gallon and spends $150 on fuel should be able to drive at least 750 miles on a tank of fuel.
Compare fuel invoices to logs
In some cases, a driver will hide some details in the hopes that they will complete the transaction without being scrutinized. Ensure you’re spending the right amount by carefully examining each bill and report, and comparing it to the receipts.
Make your drivers your support
If you want your fuel fraud prevention strategy to be successful, you must cooperate with your drivers rather than blaming them. You should avoid accusing and blaming your drivers for fraud, particularly if you have no proof to back up your claims.
You’ll likely upset the drivers devoted to your business and condemn those who may have made an honest mistake. You can assist drivers in recognizing the seriousness of the issue by describing the damage fuel card fraud causes to the business. After they understand how crucial it is to stop fraud, they will want to join forces with you. The end of this fraudulent activity may require some financial loss on your part.
Educate your drivers
In some cases, the fraud isn’t committed by drivers or employees; people within an organization know who is using fuel cards and make cheap attempts to steal the card directly or through hacks. Here are some tips that drivers can use to prevent external fuel card fraud:
- Take their documents and fuel cards with them when they leave their car, since criminals know where to hide valuables.
- Plan their stops when they depart and ensure they stop at reputable parking lots that are safe.
- Make sure to keep their identification and credit cards while parked, and lock the car from the inside.
- Drivers are accountable for their vehicle, so they should never ignore any indications of a burglary when someone from the office staff visits them. Even if nothing was stolen, notify their organization immediately of any suspicious activity. The information on their card’s magnetic strip may have been copied.
- During a break, drivers need to be aware of who keeps an eye on them or their car, attempting to contact them intrusively or inquiring about the route.
- Drivers should notify their company if someone tries to convince them to sell the card or make it available so they can read data from the magnetic strip. Authorities will find this information to be of great value, especially if it happened near parking lots or service stations.
- Drivers must assess their data security procedures. Scammers contact people and pretend to be business workers to get account and card details. To guarantee their security, use the upcoming Best Practices.
- Drivers should be aware of strange calls and emails, and they should contact customer service if they have doubts about their legitimacy. Avoid divulging too much information, or sharing passwords or security codes over the phone. They should never open attachments or links from unknown sources.
Conclusion
Take all reasonable precautions to prevent fuel card fraud when dealing with it. Whenever possible, go over each statement carefully. The earlier you detect a problem, the sooner you can take action, saving your company money in the long run.
It is easy for a person to be deceived when they lack all the information. However, today’s technology makes monitoring, measuring, and analyzing easier than ever. To keep thieves at bay and help your business run more efficiently and profitably, keeping track of your numbers is essential.
