How to spot the signs of fuel fraud

Unfortunately, fuel fraud is a fact of life for most fleets – and one that’s costly – but you can put some simple checks in place that spot any wrongdoing, and stamp it out.

It’s important that you have the means to know the tell-tale signs. For example, you should ask yourself:

• Do mileage figures provided by the driver correlate with odometer readings?
• Does the volume of fuel listed on a receipt exceed the vehicles’ maximum fuel tank capacity?
• Has the driver purchased the correct type of fuel?
• Is the vehicle’s MPG reading unusually low?

If the answers to the above questions reveal discrepancies and the numbers don’t quite add up, you may be a victim of fuel fraud.

Common Crimes

There are several ways an employee may try to de-fraud you – so it’s important to understand the different scams and how they occur:

Mileage Creeping:

One of the most common forms of fuel fraud when employees are reimbursed, this refers to inflating mileage figures when personal vehicles are used for business purposes.

Fuel Deceit: 

This can include numerous fraudulent actions such as filling non-approved vehicles; claiming a fuel purchase that exceeds a vehicle’s fuel tank capacity, and ‘side fueling’ when the driver pumps fuel into a container for personal use, but still charges the business.

Fuel Card Fraud:

An increasingly common form of fraud, this refers to inflating fuel card transactions by sharing fuel cards and authorizing multiple pump purchases.

Fuel Type Fraud:

This simply means purchasing the wrong type of fuel, which indicates that the purchase has been made for an unauthorized vehicle.

Fuel Siphoning:

This occurs when fuel is removed from the tank of a vehicle for personal use. On occasion, the driver will also refuel his or her authorized vehicle.

Prevention – is it possible? 

Yes: there are numerous ways you can crack down on fuel fraud. However, be warned – some methods can be time-consuming if you’re relying on manual processes, and your company may still be vulnerable. Some of the preventive actions you can take include:

Allocating Fuel Cards and PINs:

Issuing your drivers with fuel cards gives you more control over the purchasing of fuel but it’s also worth prompting drivers to enter a Personal Identification Number when using them. PINs make it more difficult for drivers to swap fuel cards, and easier to perform regular fraud checks using a fleet fuel management system.

Implementing Fuel Limits:

Many fuel cards have the option of setting purchase limits, so drivers can only buy a certain amount of fuel at one time.

Checking Frequencies:

Is a driver stopping multiple times on any one route or day, unnecessarily, and possibly fueling more than one vehicle? Frequent checks of fuel stops will uncover this type of activity.

Conducting Manual Cross-checks:

Make sure you cross-check all fuel purchase receipts with a fine-tooth comb to make sure that drivers are providing you with the ‘full picture’.

Highlighting Consequences:

You must tell your employees how seriously you take this issue. You should make the consequences of fraudulent actions clear to your drivers. After all, fuel fraud is a criminal offense, but some drivers may not understand just how serious it is or realize their job will be at risk.

Automated Solutions:

We know that this is a tricky issue to tackle, especially as paper processes do not allow for tight data controls – for instance, drivers may forget, have bad writing or simply lie about the mileage driven on behalf of the company.

This is why we advocate using fleet management software – it can help to automate the reporting and analysis of fuel purchasing, while at the same time highlighting fueling discrepancies and eliminating error-prone, time-consuming administrative tasks.

Having a comprehensive overview of your fleet’s fuel usage will help you to eliminate as many fraud variables as possible and making use of advanced software with data management and analytic capabilities will help to control costs and eliminate fuel fraud.