How to Spot and Prevent Fuel Card Fraud

Truckstop Fraud Prevention Friday: Learn more about common types of fuel card fraud, how to prevent fuel card fraud, and what signs to watch for in your trucking business

Fuel is one of the biggest expenses for truck drivers, averaging around $70,000 per year. With numbers like that, signing up for a fuel-savings purchasing card makes sense—and most fleet managers and owner-operators do.

Like any payment method, a fuel card carries risks for freight carriers. And fuel card fraud involving misuse of these cards by drivers or scammers has been on the rise in the trucking industry.

To protect your business against fuel card fraud, it’s essential to be vigilant and take preventive measures. In this article you’ll learn more about common types of fuel card fraud, how to prevent fuel card fraud, and what signs to watch for in your trucking business.

What Is Fuel Card Fraud?

Owner-operators and carriers use fuel-saving cards to get a discount on fuel. These cards may be prepaid cards, company cards with a set credit limit, or general credit cards. Fleet managers often use one fuel card company to manage the payment methods for all their drivers.

Fuel card fraud involves misusing a purchasing card specifically designated to drivers for fuel costs. And when frequent fuel fill-ups are involved, keeping track of spending can be difficult, and often leads to fuel card fraud. 

Fuel card fraud can occur within an organization, or outside of an organization,

Internal fuel card fraud

Internal fuel card fraud occurs when a truck driver uses their fuel card to purchase anything other than their own fuel. Drivers may fill up someone else’s vehicle, fill an extra gas container, buy provisions in a gas station, or request a higher allowance than needed. This is also known as slippage.

External fuel card fraud

External fuel card fraud involves the misuse of the card by someone outside of your organization. This can happen in a few different ways:

• Credit card skimmers: A card skimmer is a fraudulent device attached to a payment system that intercepts transactions. Skimmers often look just like a typical card reader, but they may also come in the form of a hidden camera (to see your pin or zip code), or a shimming device (a magnetic strip used for cloning).
• Lost or stolen cards: This is a common occurrence of fuel card fraud. A driver misplaces their card, and a thief begins using it immediately for miscellaneous purchases before the card company can be alerted to freeze the account. 
• Online theft: Online card theft happens when bad actors hack into a fuel card account. They may use phishing scams (via email) or smishing scams (via text) to gain sensitive personal details that can be used to access online accounts and steal information.

Common Fuel Card Fraud Warning Signs

How would a company know about fuel card fraud? Like other common freight fraud trends, there are warning signs to watch out for, especially when reviewing spending reports.

Indicators of fuel card fraud

• Unusual spending patterns or increases in fuel purchases
• Transactions occurring outside normal business hours
• Transactions in locations distant from normal routes
• Multiple transactions in a short time period
• Fuel types purchased not matching the company vehicles’ specifications
• Fuel costs do not match mileage or tank capacity.
• Charges from odd locations.

Understanding how technology can help identify potential fraud

A lot of fuel card fraud instances are subtle, which is why certain technological tools can help you spot anomalies. 

• Data analysis tools: Dispatch and fleet management software allows you to keep track of several key data points like frequency of fuel stops. Your fuel card provider should also provide data analytics for you to review. If spending seems higher than usual, you can lock or freeze specific driver cards until you have more information. 
• Geolocation technologies: Using geolocation can also help you spot red flags. Many ELD Apps contain telematics that tracks driver location. If a driver is off course or filling up at a station they don’t normally frequent, check in immediately.

How to Prevent Fuel Card Fraud

With a proactive approach, fuel card theft can be preventable. These tips can help keep your drivers accountable and protect your business.

Educate your drivers

Warn drivers of the types of external fuel card fraud like skimmers, phishing scams, and theft. Let them know the penalties associated with internal fuel card fraud as well—misusing funds can result in immediate loss of employment.

Require a PIN for each driver

Every driver in your fleet should have a unique PIN that must be entered before a fuel card is authorized for use. Remind drivers to never share this PIN, and to be discrete when entering it at a fuel station.

Set sending limits

Most fuel cards will allow you to set a daily spending limit for your drivers. Calculate how much a driver needs to spend based on their route and current fuel prices, and only allow what is needed. This will help prevent slippage.

Limit fueling times

You may also want to set specific guidelines about what time of day a driver can fuel up. For example—allow fuel card usage during working hours, but not overnight or on their days off. You can place a cap on the number of times a driver can use the card per day as well to help prevent external fuel card fraud.

Protect Your Business Against Fuel Card Fraud

Preventing fuel card fraud is a crucial way to protect your business. Watch for red flags like frequent fill-ups, odd locations, and mismatched fuel costs compared to trip mileage. As soon as you spot something out of the ordinary, contact your driver, and freeze fuel cards when necessary. Educate your drivers about the gravity of internal fuel card fraud, and help keep them safe with individual PIN’s, limitations, and information on skimmers and scammers. 

Stay vigilant and proactive in the fight against fuel card fraud, and be sure to use technology to your advantage.

Category: Driver Stuff, Featured, Fuel & Oil, General Update, Management, News, Safety, Training