Articles

Fuel Card Fraud

It is more important than ever for fleet managers to develop a strategy that helps prevent fuel card fraud. Fuel card fraud typically comes in two forms: slippage and third-party fraud. Slippage happens when drivers purchase unauthorized, non-fuel items in a c-store environment. Or, rather than using their card to fill up an authorized work vehicle, they instead use it to put fuel into their personal vehicle. Third-party fraud occurs when someone steals the card data through a skimming device. The skimming device is typically installed over an existing card reader, and once the card is swiped, the data is captured, which allows the fraudsters to create a duplicate of that card.

What Can Be Done?

A fuel card program, such as the ones offered by the Commercial Fueling Network (CFN) and Voyager, must be specifically designed to help prevent slippage and third-party fraud. These programs, when set up properly, will ensure that drivers are fueling the right vehicles, at the right location, with the right product, at the right time and in predetermined quantities.

Typically, the most stringent controls available are contained within CFN’s system, where the card is utilized at a cardlock or private site location. Both CFN and Voyager rely on robust technology designed to spot patterns of card use associated with third-party fraud and alert the user to it and/or temporarily disable a card. Experience tells us that when fuel prices are on the rise, drivers are more likely to try and take advantage of a company’s fuel card program and fraudsters have more incentive to step up their efforts. Fleet managers and their staff must stay focused on reviewing their fuel statements in a timely manner. If you need your fuel statement sorted in a way that best works for you, your fuel card vendor should have the ability to do that. Also, choose a frequent billing cycle (weekly is a best practice) that allows you to look for abnormalities sooner.

Controls & Training

All your fuel cards must have some level of controls set up. Examples of specific card controls include product type, gallons or dollars, time of day and day of week limits. Other advanced controls and features include state and region lockouts, emailed receipts (sent to you shortly after a transaction occurs), exception reporting and purchase alerts.

Your fuel card vendor’s customer service staff should be able to set up and maintain all of the controls and features described here at your direction. Most fuel card vendors offer the ability to contact their customer service departments by phone, email and chat, as well as after hours by phone for urgent matters. Your account with your fuel card vendor should be set up with a password that will only allow your account administrators access to make changes.

In addition, both CFN and Voyager offer an online management tool that allows your administrators to maintain their own cards, including the ability to quickly lock out and replace fuel cards.

Drivers should be trained how to properly use their fuel cards and how to potentially spot skimming devices. Have the driver look to see if the card reader mechanism is loose or appears to have been tampered with. Most fueling locations will have security seals on the pumps. If the seal is broken, choose a different pump.

Pricing & Locations

Depending on the fuel card program you have, pricing and chosen fueling locations can have a big impact on your total cost. Drivers may be concerned about their convenience and comfort when it comes to choosing a fuel location. However, their choice may have a negative impact on your bottom line. Your fleet manager should review your statements and find the transactions that are priced visibly higher than other transactions in the same region, on the same day. Yes, you will see locations that are within, $.03 to $.05 per gallon, but look for the transactions where there are $.10, $.20 or $.30 differences in the price per gallon. Also, look at the frequency of that location being used by your drivers. The location may be off-route or out of the way, costing you additional money in mileage and time spent driving to the location. Lock out the high-priced and off-route locations by utilizing a zip code lock out feature. Change the patterns of your drivers and protect your bottom line.

Driver Fuel Policy

One of the most important elements of a successful fuel card management program is issuing a driver fuel policy agreement to your drivers. It is important to set expectations and hold your drivers accountable up front. Taking this important step will protect your company and will show your drivers that you will not allow your fuel program to be taken advantage of. An effective driver fuel policy will state the following:

I, Driver’s Name, will:

• Only purchase the designated product(s) assigned to my card
• Only purchase designated product(s) for company vehicles
• Enter the correct odometer reading
• Not share my card with other drivers or anyone
• Not share my PIN number with other drivers or anyone
• Immediately report the occurrence of a lost or stolen card

Your fuel card vendor should be able to provide you with a template driver fuel policy for you to implement.

What to Watch For

It is important to look for key indicators or potential red flags that need to be investigated. Some of these include charges that occur in unusual locations, fueling that is taking place on days or times that a driver isn’t working, odometer readings that are incorrect or off-pattern and the frequency of fill-ups.

Implementing the controls and account features described will save you money and greatly reduce your fraud exposure. Maintain vigilance and examine your fuel statements regularly. Take control of your fuel card program.