How can I prevent company fuel card fraud?

Fuel cards are becoming increasingly popular as business managers realise the benefits that they bring. Whether your business has a few vehicles out on the road or an entire fleet, fuel cards make light work of administrative tasks. Invoices are presented in a format that’s compatible with HMRC systems and fleet managers can see at a glance how much fuel is being used on a daily, weekly and monthly basis.

But as fuel cards grow in popularity, fraudulent activity connected with their use is also on the rise. So what can be done to ensure the integrity of every transaction made against one of your company fuel cards?

We’ve identified some of the most common issues that fleet managers have reported with fuel card use. We’ve also put together some methods for limiting the possibility of fraudulent transactions, so you can easily deal with any problems that occur.

Fuel card theft and skimming

Around 25% of fleet managers have reported issues with fuel cards being intercepted in the post. Once thieves have hold of them, they can use them or sell them on for profit. But card skimming is also a serious issue, with scammers placing cameras overlooking keypads so that they can record the PIN. The card can then be cloned and used to make fraudulent fuel purchases.

Filling up a private car using a company fuel card

Your employee may decide to fill up their own car and charge the cost of refuelling to your business using their fuel card. Many fuel cards are associated with a particular vehicle, which the pump attendants and cashiers should check before accepting the card as payment. 

Siphoning fuel

An employee may fill up their company vehicle, then siphon off some of the fuel into their car for personal use. This is tricky to detect since the fuel transaction would appear to be in order. The only sure way of identifying this type of fuel card fraud is to keep a close watch on vehicle mileage and the frequency of filling.

Side fuelling

In this form of fraud, an employee fills up their work vehicle but also fills one or more jerrycans at the same time, for personal use. Once again, the only way of identifying this type of fraud is to keep a close watch on fuel consumption and mileage of the vehicle concerned.

Inflating the cost of a fill

Some drivers work in conjunction with fuel station staff to commit fraudulent card transactions. The driver fills up the vehicle, as usual, then the cashier charges for non-existent additional fuel. The appropriate sum of money is removed from the till and divided between the driver and the cashier. Once again, keeping a close watch on vehicle mileage and fuel consumption is the best way of spotting such transactions.

Store purchases

Many fuel cards are limited exclusively to the purchase of fuel, but once again, this is open to fraudulent spending. Cashiers may turn a blind eye to additional products added to the total, such as food, drinks, magazines and sweets.

Some of these activities may not seem particularly significant, but over a year, fraudulent fuel card transactions can end up costing your business considerably. 

When trying to safeguard the use of your company fuel cards, it’s essential to have strict measures in place to control their use. That means thoroughly familiarising yourself with the activities of your company vehicles so that you can easily spot anomalies. 

The following steps will help to control the use of fuel cards within your business, limiting the potential for misuse:

Introduce two-step identification

Requiring every transaction to be authorised by the employee using a PIN and a unit number can help to eradicate driver fraud. When every driver is clearly identified with each transaction, the chances of being identified while undertaking fraudulent activity are very high, which is likely to deter most types of fuel card fraud by your drivers.

Give each driver their own card

Sometimes fuel cards are issued per vehicle, but when multiple drivers access that vehicle, the system is immediately open to misuse. Issue a separate card for each driver, making it easy to identify every single transaction. Patterns of use can then be studied to identify unusual activity.

Set card limits

Once you know how often a vehicle needs to be filled up and how many miles that vehicle does to the gallon on average, it’s easy to set realistic spending limits on your fuel cards. Drivers need to be mindful that going over their allotted budget will leave them exposed – and potentially unable to fuel their company vehicle.

Educate drivers

Not all fraud is committed by employees. However, staff training is essential to make sure that everyone knows how to keep fuel cards safe. Remind your drivers that they are responsible for their fuel card and encourage them to keep the card safe. Covering the keypad with their hand when entering their PIN is also helpful, as it prevents cloned cards from being accessed.

As discussed, there are various ways to help prevent company fuel card fraud. To add further protection and control to your company-wide spending, you might want to try a different fuel expense card option. Prepaid cards, such as Soldo, are a great alternative to a fuel card as managers can load a specified amount of money for fuel, ensuring staff are not able to overspend and are never left out of pocket. 

Soldo offers a selection of prepaid cards with fully customisable rules so that managers can control employee spending seamlessly and, like a fuel card, minimise the associated reporting and administrative overhead. While Soldo prepaid cards are not the same as a fuel card, they provide the ability for companies to cover far broader spectrum of expense types. 

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