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.
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:
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.
Knowing precisely what to watch out for will help you prevent fuel card fraud. Fraudulent fuel card scenarios include:
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:
There are numerous types of fuel fraud, and receiving receipts must be compared with the car specifications in order to detect suspicious activity.
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:
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.
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:
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.
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.
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.
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 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.
