How to Spot Fuel Card Fraud

Fillip Fleet
June 27, 2023
Minute Read

The convenience of fuel cards is undeniable. It removes the hassle of tracking receipts and places trust in employees to purchase fuel independently. However, theft is an unfortunate part of our reality.

You might notice that a certain driver is purchasing fuel that exceeds their vehicle’s fuel tank capacity; another might be fueling up during off hours. What does this mean, and are you a victim of fuel card fraud?

Let’s look at what fuel card fraud is, how much of a financial loss it can incur, and what steps you can take to stop it.

What is Fuel Card Fraud?

Company drivers commit fuel card fraud when they misuse their access to business fuel cards for personal gain.

This misuse can range from fueling personal vehicles and buying non-fuel items to siphoning and reselling fuel, often leading to significant financial losses for businesses.

Companies can exercise specific workarounds to eliminate fuel card fraud and promote a fair and efficient workplace.

The Cost of Fuel Fraud

Fuel card fraud can not only be a hefty hidden cost in your fleet operations but can also disrupt your fleet management data. But just how severe are the repercussions of fuel fraud? The answer may surprise you.

An example of fuel fraud is when an employee uses the company's fuel card to fill their personal vehicle once a week. If the average cost to fill a tank is $60, this employee costs the company an additional $3,120 annually. Multiply that by the number of drivers engaging in the same behavior, and the figure can be quite staggering.

Beyond direct financial losses, fuel card fraud can also lead to skewed data about the fuel consumption of your leased fleet. These inaccuracies can result in misinformed decisions, affecting your fleet management strategies and, ultimately, your bottom line.

Most Common Examples of Fuel Card Frauds

Knowing about the common examples of fuel card fraud, you can better identify potential risks and establish preventative measures. 

Let's look at some typical ways employees misuse fuel cards.

Fueling Personal Vehicles

This method of fuel fraud involves the drivers using the company's fuel card to fill their personal vehicles. 

Per transaction, the deception might seem minimal. However, when it accumulates over time, it can substantially inflate the company's fuel costs.

Purchasing Non-Fuel Items

Sometimes employees take advantage of the fact that fuel cards are valid in fuel station convenience stores.

They use the card to purchase personal items like snacks and automotive supplies. This raises your company’s expenses and broadens the scope of fraud beyond just fuel.

Siphoning Fuel

A bolder form of fraud involves filling up the company vehicle and then siphoning some of the fuel into personal containers.

The stolen fuel, for which the company paid, is either used by the driver for their personal vehicles or sold for a quick buck.

Indicators of Fuel Card Fraud

Do you think you are a victim of fuel fraud? There are certain clues you can find in the transaction history of your employees which will point toward an ongoing scam.

Multiple Fill-ups in a Short Time Frame

You might notice that a driver fills up their tank and then returns to the same or different fuel station shortly after that for another fill-up.

This indicates fraud, and the driver is likely siphoning fuel for personal gain.

Fueling Outside of Expected Routes or Times

Keep an eye out for fuel purchases that are out of line with the established routes of your fleet vehicles or that occur outside of typical working hours, as could signify fraudulent behavior.

Employees could be taking detours to fuel their personal vehicles or buying fuel for others on the company's account.

Fuel Purchases Exceeding Tank Capacity

Knowing the tank capacity for every driver’s vehicle is essential. Fuel purchases that are in excess of a vehicle’s tank capacity are a clear red flag.

In such situations, the employee is either side-fuelling a spare container for personal use or getting the excess amount, beyond the price of a full tank, in the form of cash from the fuel counter.

Vehicle Mileage Not Matching Fuel Purchases

One of the telltale signs of fuel fraud is any inconsistency in the mileage of a vehicle and the amount of fuel purchased for it.

Drivers taking part in fuel card fraud will have a history of buying more fuel than the vehicle needed for the distance it covers.

You can catch this by calculating the vehicle’s fuel consumption for a trip based on its efficiency and distance traveled. If you find out that the vehicle consumed less fuel than what the driver purchased, then it’s quite likely that they’re stealing fuel. This is especially true if the transaction history of the driver has multiple instances of such inconsistencies.

How to Fight Fuel Fraud in Your Fleet?

If you want to catch fuel card fraud, the first step is identifying potential fraudulent activities in your fleet. Once you realize that the numbers on receipts don’t add up, you can use the following steps to prevent fuel card fraud and safeguard your company finances better.

Issuing Fuel Cards and Pin Numbers

You can add an extra layer of security to your fuel transactions by issuing fuel cards tied to specific vehicles or drivers and secured with personal identification numbers (PINs).

The company issues a unique PIN to every driver, which nobody else knows. With every transaction, drivers have to enter their PIN. This makes them accountable for their fuel purchases, and the company can trace their every purchase back to the individual driver through their unique PIN.

Plus, in the unlikely scenario of a fuel card getting stolen or lost, the requirement of a PIN for transactions would render the card useless to the perpetrator. Virtual fuel cards, however, don’t have to face this problem; they’re installed directly on every driver’s smartphone and link to their digital wallet, making it impossible to lose them or for somebody to steal them.

Using Fuel Limits

You can control the amount of fuel each vehicle consumes by setting a maximum fuel limit per transaction or per day/week.

This helps monitor fuel usage and prevents drivers from buying more fuel than what you deem necessary, considering the mileage and average activity of their vehicle.

Frequency Alerts

Most modern fuel card companies allow you to create alerts for suspicious activities; the software will flag frequent fuel purchases and any transactions that exceed a vehicle’s fuel tank capacity.

You can then take action on these alerts by double-checking the data and, if needed, blocking the fuel card used in misconduct.

Checking for Distance Creep

Distance creep refers to a gradual increase in reported mileage over time without a corresponding increase in business activity. 

This is a subtle sign that an employee is inflating their mileage to cover up unauthorized fuel purchases. You can spot and address any inconsistencies by regularly checking for such trends to ensure that your drivers only use fuel cards for business purposes.

Manually Spot-Checking Receipts

While automation can assist in detecting fraud, manual spot-checking is equally important. 

It’s best to verify the authenticity of the transactions yourself by habitually reviewing fuel receipts. Try to keep an eye out for clues that could help you catch fuel card fraud, such as mismatched dates, locations, or amounts. 

Fight fuel fraud with Fillip

We understand the challenges of managing fleet expenses.

Fillip's digital card works at any gas station that accepts Visa.

We've  put a lot of thought into security with built-in fraud prevention and real-time alerts.

We know every business is unique, so we offer flexible funding options. Check us out and let's make managing your fleet a breeze together!

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