How to Prevent Fuel Card Fraud

With fuel card fraud on the rise, it’s more important than ever for fleet managers to develop a strategy that prevents profit-reducing theft.

Fuel card fraud comes in two forms:

• Slippage: When drivers purchase non-fuel items at the station, such as food and drinks, then claim that those expenses were for fuel. Or, after filling up their work vehicle, they fill up a 5-gallon can and pour that into their personal vehicle at home.
• Third-party fraud: When someone steals the actual card or when card data is skimmed by a device installed over the card reader.

• Set Up a Total Fuel Management Program
• Educate Drivers
• Closely Monitor Alerts, E-Receipts, and Reports

A TFMP helps prevent slippage by ensuring that drivers are fueling the right vehicles, at the right station, and at the right time. A good TFMP allows fleet managers to set cross-company or individual limits (controls), track purchases, and run real-time, detailed reports, broken down by individual driver or vehicle, so that you can quickly spot and address card fraud.

Slippage
Create a Driver Fuel Policy that clearly states your expectations for drivers who are assigned a fuel card and outlines the consequences of card misuse.

Third-Party Fraud
Besides keeping their actual card and PIN safe, it’s even more important for drivers to help protect the card data. In growing numbers, thieves are installing skimmers, devices designed to look like a card reader, but that actually fit over the real one. As you slide your card into the reader, the skimmer reads the magnetic strip and stores the card number.

We suggest that you share these fraud prevention tips with all card-holding employees:

• Check the pump next to the one you are using to see if the card reader and setup look different. The colors and styles should all match, and graphics should be aligned and unobscured.
• Look for any signs of damage that might indicate that the card reader or the pump itself has been pried open.
• Look for a small attachment or pinholes that could contain a tiny camera. One popular spot is the brochure holder.
• Be suspicious if the card reader seems unusually deep, or if you can barely grab the end of the card when removing it. A skimmer might have been placed over the original card reader.
• Tug the card reader and PIN pad. Most skimming devices are attached with double-sided tape for quick removal by the crooks.
• Always assume someone is watching, and cover the keypad with your other hand while entering your PIN.
• Never re-enter your PIN on the same transaction. If the pump displays a message asking you to do so, that is possibly an indication that the station’s payment system has been hacked.

Let employees know that, if they detect a skimmer at the pump, they should immediately notify the station attendant.

It’s crucial to your bottom line that your fuel card system provides real-time alerts of unauthorized or abnormal purchases, so that you can address them right away. For instance, if the wrong type of fuel is pumped into a vehicle (for example, regular fuel pumped into a diesel-burning vehicle), an alert will let you immediately call the driver so that serious engine damage doesn’t occur. Also, this serves as a good indicator that a fuel-type restriction should be set in the system.

But, it’s also important to frequently check e-receipts and run and scrutinize reports.

• If you notice charges in an unusual location, you may need to set a zip-code or state lockout in your card system.
• Watch for fueling on days or at times that a driver isn’t working. If you see anything unusual, you may have to tighten authorized fueling days and times.
• Compare odometer readings to gallons pumped. This could indicate a maintenance issue or card misuse. In that case, you can set a restriction for number of gallons purchased per transaction, day, week, or month.
• Keep an eye on frequency of fill-ups to determine if you need to further restrict the allowable number of transactions and dollar amounts per day.

Quickly detecting fuel card fraud and tightening TFMP controls can help you and your team avoid costly mistakes and improve your profit margin.