The 5 Biggest Signs of Fuel Card Fraud

If your business is based on the effective usage of vehicles, you must definitely be aware of the crucial role fuel plays in your business. For the majority of fleet businesses, fuel is a major expense. Companies are always on the lookout for techniques to cut down on fuel expenses. One such technique that has become increasingly popular is Fuel Cards. 

A fuel card is quite similar to a credit card and is used to keep track of a business’s fuel expenses. While fuel cards are mostly used to pay for petrol, diesel, and other types of fuel, some may also be used for vehicle maintenance activities.

While the popularity of fuel cards has recently increased, so has the probability of fuel card fraud. Fuel card fraud is a common concern amongst fleet managers. To simplify the process of detecting fraudulent fuel card activity, this blog will outline some fuel card basics, cases of fuel card fraud, and some precautionary measures that you as a fleet manager can take to prevent fuel card fraud.

Why is a Fuel Card Used?

Getting a fuel card is one of the simplest ways to keep your trucking company’s fuel costs under control. A fuel card, however, does more than just save money. Here are 4 reasons why you should use a card to pay for fuel instead of cash or a credit card.

  • The safest way to fuel up is with a fuel card. Paying with cash at the truck stop puts your drivers at risk of robbery. When you use a fuel card, you have an added layer of security. These cards also safeguard the company against fuel theft because they allow owners to track driver transactions and revoke or deactivate lost or stolen cards.
  • When you pay with cash or a credit card, you forego the essential reporting tools that come with a fuel card. These reports reveal the performance of your trucks as well as any maintenance needs or difficulties, which can help you keep track of your spending.
  • You can also say goodbye to juggling receipts because all of your fuel purchases will be recorded digitally.
  • A fuel card allows business owners greater control over their fuel bills. You can limit the amount of money your drivers can spend and/or the products and services they can buy.

What are the Instances of Fuel Card Fraud?

Although fuel cards have made it significantly harder for drivers to steal fuel, there are still a few instances where fuel card fraud can be carried out:

  1. Frequent Fuel Fill Ups

If your fuel card reports show frequent fill-ups, this may be a sign of fuel card fraud. This could indicate that your fuel is being siphoned or that your fuel card is being used for non-company assets. You can easily know the number of refuelling events using your fleet management solution. Such as LocoNav have a custom report for refuelling incidents for more clarity.

  1. Fuel Costs Do Not Match Mileage

As a fleet manager, you get a fair idea about the mileage of every vehicle you own. In case you do not, LocoNav offers fuel consumption and mileage reports that are easily accessible. If the allocated fuel card charges do not match the mileage, this could be a clear indication of fuel card fraud. 

  1. Fuel Charge From Unapproved Location

Based on their daily routines and itineraries, most regional drivers will fill up at the same fuel station, or a small number of stations. Keep track of petrol pumps and keep an eye out for transactions at any filling station where your drivers do not regularly stop. A change like this could be a warning flag for external fraud.

  1. Fuel Site Collusion

This is where drivers conspire with site workers to transact for fuel when refuelling has not occurred or to charge a higher price for the fuel. The value is frequently swapped for cash or items like cigarettes. This process is known as ‘dieselization.’ Drivers frequently share information on potential collusion sites.

  1. Multiple Charges From Same Card

An unauthorised clone of a fuel card can be used to fill up other vehicles, with the charges going to the card’s original owner. This is significant fraudulent conduct that could result in enormous expenditures that are impossible to recoup.

What Precautions Should a Fleet Manager Take to Avoid Fuel Card Fraud? 

Fortunately, most fuel cards include safeguards and fuel theft solutions that allow you to prevent fuel fraud before it occurs. Here are 4 things you may do to protect your company from fuel fraud:

  1. Use Unique PINs for Transactions

A fuel card can be issued to either a driver or a vehicle. You can easily track who made each purchase and notice odd activity tied to one driver by issuing a card and its unique PINs to each driver. Inform your drivers that PINs should never be shared or revealed to anyone else.

  1. Set a Cap on Daily Refueling Incidents

Consider how frequently your drivers should be fuelling up throughout the day. Limiting the number of fuel purchases per day can help to reduce both internal and external fraud. 

  1. Set a Monetary Limit on Refueling Events

Fuel cards allow you to limit the quantity of fuel a driver can buy per day. With this cap in place, the driver will have just enough room to fill up the vehicle’s tank without leaving any opportunity for fraud.

  1. Limit Fuel Cards to Fuel Charges Only

It’s also a fair idea to toggle card controls to limit fuel card purchases to only fuel, or maybe just fuel and maintenance. This will prevent another sort of typical internal fuel fraud in which a driver uses the corporate card to purchase food, cigarettes, or even booze at a fuel station.

Tips for Coaching Drivers Against Fleet Card Fraud

Since drivers play a vital role in the usage of fleet fuel cards, here are a few ways fleet managers can team up with drivers to curb fuel card scams:

  1. Trust Your Drivers

The best advice for fleet managers is to expect the best from their drivers. Use analytics and reporting to identify spending abnormalities at the pump, but don’t assume that an anomaly indicates purposeful fraud. The overpayment might be explained simply. Maintaining a driver’s trust is as simple as thinking the best of them and avoiding false allegations.

  1. Give Drivers Insider Knowledge

Drivers should be educated on how fuel card fraud harms every firm stakeholder and even the industry as a whole. Fleet managers should also explain the fundamentals of fuel card analytics and reporting, such as which metrics are collected and why.

To successfully combat fuel card theft, fleet managers must keep drivers on their side. Insider knowledge instills a sense of ownership and duty in drivers. In the fight against fuel card theft, an empowered team might be the fleet manager’s most potent partner.

  1. Train Drivers on Common Fuel Card Fraud Indicators

The most obvious, yet important way to coach drivers against fuel card fraud is to empower drivers to identify common signs of fuel card fraud. Educate them to identify it, and encourage them to report it.

The most important thing to remember about fuel card fraud is to do everything possible to avoid it, but if that fails, to be attentive in reviewing every statement. If detected early, action can be done, and your firm can prevent costly consequences.

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