How to reduce the risk of fuel fraud and fuel card misuse

Managing fuel spend is one of the most important duties of a fleet manager. Without safeguarding your fuel supply from fraud, theft and misuse, you’re fighting an uphill battle. Developing a fuel theft prevention strategy in your organisation based on transparency and systemic reviews helps create a proactive system of trust and certainty around fuel funds. 

What is Fuel Fraud? 

Examples of fleet fuel fraud include drivers using fuel cards for personal purchases, sharing or swapping fuel cards, filling up personal vehicles, and other purchases not authorised by the fleet manager. At the individual level, unethical drivers may feel they’re only skimming off a small amount here or there, no harm, no foul. But when viewed across the business, these actions add up over the course of a year. Fuel fraud hurts the bottom line of fleet budgets, making it important to set up effective checks and balances around fuel purchasing. 

Types of Fuel Fraud

Fuel fraud can happen in a variety of ways, but here are some of the most common.

Lost or Stolen Cards: Many modern cards are protected by a Personal Identification Number, but criminals who steal or find a lost card may exploit tap-and-go options or other features intended for convenience at the pump. 

Card Skimming and Cloning: Card skimmers are devices that are placed on top of legitimate card readers to read data on credit and fuel cards, then replicate it to a “cloned” card for criminals to sell or otherwise misuse. 

Personal Use of Fuel Cards: An employee trusted with a card for work travel expenses using it to make personal purchases without authorisation—eg fuel or maintenance on a personal vehicle, “slippage” purchases, or letting friends and family make purchases with the card. 

Fuel Theft: At the more criminal end of the spectrum is outright fuel theft, where holders of a fleet fuel card use it to purchase high volumes of fuel that they store in large tanks for resale or personal use. 

Ways to Prevent Fuel Fraud 

Fleet managers and drivers can work together to preserve the integrity of fuel purchasing across the fleet. There are a number of proactive processes that can be implemented to close the gaps where fraud can take place, and give better visibility of anomalies that indicate fraud in real time. 

1. Set purchase limits – Based on time, day, location, vehicle type, fuel type, or other variables that rule out types of purchases that shouldn’t occur as part of normal operations. 
2. Create an alert system – Have a system in place which lets you know when anomalous fuel purchases occur. Responding to fraudulent activities as they happen lets you prevent multiple instances of fraud before it’s addressed. 
3. Educate employees – Too often there’s a mistaken sense that small fraudulent purchases here and there don’t matter. Some may even claim ignorance of the rules, treating travel expense cards like an executive perk. Make certain that employees understand and attest to their obligations around fleet fuel purchasing, and what constitutes proper fuel card use. 
4. Enforce consequences – Improper fuel card use must have penalties that are adhered to by the business when fraud occurs. Most drivers do the right thing, but it’s important to let your employees know where you draw the line.   
5.  Audit fuel purchases regularly – Fuel card data and purchasing controls go a long way in helping spot and prevent fuel theft. Regularly monitoring your business’s fuel card accounts for anomalies will help you detect fraud early. 
6. Ensure cards are secure – Where a lot of fuel cards are being used, conducting inventory checks on cards, and establishing a log system will help reduce the likelihood of fraud. Drivers should bear responsibility for their card and closely monitor their own transactions for any discrepancy. 

Advantages of a fuel card for combatting fuel fraud 

Fleet fuel card programs help to mitigate some of the risk from fraud by putting more powerful controls at the fingertips of fleet managers. Setting granular purchase controls on time, place, and type of fuel purchased lets you get out ahead of potential misuses and plugs many potential security holes. The administrative overhead around detecting and preventing fraud is reduced, with greater visibility of fleet movements and purchases as they occur.