How To Protect Yourself from Fuel Card Fraud

The usage of business fuel card services in fleet businesses has increased in the past few years, and so has the risk of fuel card fraud. While fleet cards are helpful for fleet managers who have plenty of costs to handle, the introduction of the cashless transactions through fuel cards has risen another serious matter - fuel card fraud.

There is a possibility that abuse of company fuel cards might not be detected on time, which might significantly affect the company budget. In order to prevent such undesired costs, you should be familiar with the main types of fuel card fraud - internal and external.

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Although fuel card companies have made it harder for drivers to take advantage of company resources, there is still the danger of a few different types of abuse:

Employees might use an automatic pump to siphon fuel from the tank of the vehicle, replace it afterwards, and fill up again. However, this is an easily detectable fraud because it leads to overconsumption.

This is a widely-known type of fuel fraud where the vehicle tank and a side container are filled up at the same time and charged as one single transaction. For side fuelling fuel thefts might use mobile generators, jerry cans, or similar equipment.

Drivers sometimes work together with staff from the gas stations. Cashiers can merge the charges of multiple pumps on a single fuel card. In this type of fuel card fraud, the money obtained from other pumps is usually shared between cashier, driver and pump attendant.

One of the most popular types of fuel card fraud is when a driver stops at a station and asks for a certain amount of fuel. After that the driver requests from the involved cashier to manually charge a further amount from the fuel card. The cash value of the extra fuel is taken from the cash drawer and split between participants in the fraud - driver, cashier, and pump attendant.

When filled up, unauthorised vehicles will not match with the registration number on the company fuel card. However, some employees might manipulate this information and make it appear as if they are filling the company automobile. To provide some security, pump attendants are required to validate the fleet fuel card and ensure it is for the same vehicle. 

Another type of fuel card fraud is purchasing products or services that are illegally added to the fuel/oil cost. The full amount is withdrawn from the company fuel card. 

Employees are not the only ones who could be blamed for company fuel card thefts. There are a couple of other threats you should be aware of:

An illegal copy of a fuel card can be used to fill up other vehicles with charges going to the original owner of the card. This is a serious fraudulent activity that might cause massive costs which are difficult to recover.

According to Shell’s report, 25% of fleet managers claim that this type of fuel card fraud occurs frequently. While on the way to the customer, fuel card details might get stolen and abused.

Once you know the most common types of fuel card fraud, you are able to detect any fraudulent activity. Fuel cards for small businesses are in fact designed to reduce the risk of this kind of activities. Yet, it is important that for both small and big companies to monitor all fuel card related expenses.

One of the easiest ways to detect a fuel card fraud is by checking the frequency of fill-ups. If a driver stops too often to refuel, this might mean two things - either there is a technical issue with the vehicle or your company fuel card is being misused.

Fleet managers are usually aware of the fuel consumption of the vehicles they work with. By comparing the actual usage to the amount that has been charged from the fuel card, you can detect if a fuel fraud has happened. 

In some cases, drivers might try to conceal information. You can recognise this type of fuel card fraud by comparing receipts, bills, and logs. A close examination can reveal if there has been a company fuel card theft.

Most of the fuel card companies provide invoice reports and expense control. Although it is possible for fleet managers to monitor activity, there are still many cases of fraud that can be prevented with a few changes every fleet business can make.

One of the best ways for fuel card fraud prevention is to require employees to enter the unit number and a PIN code. When drivers are obliged to enter personal information, they are personally responsible for the charges on their own fleet cards. If another vehicle is filled with your company fuel card, this will appear on the reports and will attract the attention of the fleet managers.

By assigning a fuel card to a particular vehicle, fleet managers reduce the possibility of card abuse. In addition, the fuel card should be only used for designated purchases - fuel, oil, tyres, maintenance. 

Drivers should know the exact purpose of a fleet card - what it is supposed to be used for and what the constraints are. Furthermore, employees should be aware of the consequences of a fuel card fraud. Not only is it causing financial losses to the company but is also an illegal activity that might cause drivers to lose their jobs.

In addition to the three basic rules, there are a few safeguards that you can implement in order to prevent fuel card fraud and protect your company from undesired costs: 

By setting a limit of the amount of money that can be spent on fuel, fleet businesses reduce the risk of fraudulent activity. When a driver knows that they only have enough to fuel to fill their own vehicle, they are unlikely to use the fleet card to pay for someone else’s. Prepaid fuel cards or daily limits on the card are useful for fleet management to control and avoid abuse. 

Asking drivers to record odometer readings and reminding them not to leave the fuel card unattended might bring benefits to a fleet business. While some of the frauds are committed by drivers, there are external threats that might be prevented with the help of the employees.

Another fuel card fraud prevention safeguard that can be implemented is to require from drivers to fill the tank completely and then refuel only after the maximum distance has been travelled. 

The fuel card companies in the UK provide slightly different services - such as online management tools for better monitoring and customer support for the convenience of the clients. However, fuel card fraud prevention is a specific matter that you should consider according to the demand of your company.

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