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Limiting fuel card fraud

Date: 25 April 2018   |   Author: Rachel Boagey

Fuel is a valuable resource that in turn attracts criminal behaviour. Rachel Boagey discovers how fleet managers can limit this and protect their fleet.

Fleet managers have all manner of costs to oversee and fuel is just one of them. Unfortunately, being such a valuable resource, fuel attracts criminal behaviour and fuel card fraud has become a serious issue among fleets in recent years. 

"If you ask fleet managers what keeps them awake at night, security will always be in the mix," Andy Allen, UK fuel card manager for BP Fuel Cards, tells granitekitchen.

In fact, new research commissioned by Shell has revealed that almost two thirds of fleet managers (65%) in the UK now see fuel-related fraud as a major issue for their business. The research also found 48% of fleet managers agreed they need to do more to tackle the issue of fuel fraud, which could unlock fuel cost-savings of more than 5%.

"Commissioning this new research has given us an even clearer picture of the nature of fuel-related fraud - as told by fleet managers and drivers themselves," says Shell UK's commercial fleet sales manager, Scott McGregor. "We recommend every fleet or road haulage operator establishes a full set of tactics for defending their business against fraud and, ultimately, reducing its impact on their bottom line."

Paying For Gas

Many companies, including those providing the fuel cards, are already working on solutions or technology that will attempt to limit fuel card fraud; however, there have been significant increases in the activity of fraudsters over the years. It is clear fleets should be considering fraud prevention strategies to address multiple issues of fraud, including misuse, slippage on non-fuel items, and stolen or skimmed cards.

Allstar uses a bank-standard Europay, MasterCard and Visa (EMV) technology platform, meaning it can offer protection against other, less secure technologies. With activity underpinned by standard and bespoke reports to highlight exceptional use, Allstar can provide control across 90% of the UK's fuel stations.

"Fuel card fraud is no different to other forms of fraud, in that there is a constant challenge to stay ahead of fraudsters," says Paul Holland, chief operating officer at Fleetcor. "Given the strength of Allstar's technology, we are uniquely placed to limit external fraud. Incredibly though, we still see instances of cards stolen from vehicles where the PIN has been written on the back of the card, negating the most obvious fraud prevention."

Allstar Plus VISA Card (2)

Talking about the company's EMV platform, Holland explains that it minimises risk from legacy fraud such as card cloning. In addition, the platform enables businesses to take a strong level of control over fuel consumption by enabling customers to limit use by time, spend, product types and frequency.

But despite efforts to curtail card cloning and PIN fraud, internal fraud is an area that is, arguably, equally difficult to manage, especially as company vehicle drivers need the ability to purchase fuel while on the road. "Comparison reports across drivers, vehicles, vehicle types and locations all help to give companies much greater control and visibility over their fuel expenditure, and can help in identifying any anomalies quickly," says Holland.

Norman Harding is corporate fleet manager of finance and resources in the London Borough of Hackney, and explains that within his fleet, fraud is tightly managed. He says, "To be honest, the majority of my vehicles draw fuel from bunkered storage tanks and only about a quarter of my fleet use fuel cards." He explains that the fleet doesn't get too much in the way of fraud "because most of the fuel cards are driver-specific rather than registration-specific, meaning the driver is accountable for any spurious fuel use and therefore tends to guard its use more carefully. We have had cards stolen before, but they are usually flagged up pretty quick and cancelled."

Emerging technology 

As well as these easy-fix aspects to look out for within the fleet, it is believed  technology brings new hope for fleet managers, too. Telematics company Airmax claims fleet card fraud will be a "thing of the past" thanks to emerging technology. 

In a recent announcement, the company released the results of a survey that highlighted the potential for fleet managers to save money through mpg monitoring. The company analysed data from its Airmax Remote Premium Plus solution and found greater accuracy of mpg calculations through the use of such a tool, as compared with monitoring fuel performance from data provided by fuel card transactions.

BP Fleetmove Pr 2

"We firmly believe that the misuse of company fuel cards and exaggerated mileage claims are set to become a thing of the past," says Airmax remote managing director, Richard Perham. "Airmax Remote's technology delivers complete accuracy and definitive reporting to identify fuel savings for fleet operators.

"We will be working with customers to provide insight into which of their drivers are most suitable for electric and plug-in vehicles, by accurately monitoring existing fuel use resulting from analysis of mapping, distances travelled and reasons for the journey."

"Fuel card fraud is no different to other forms of fraud, in that there is a constant challenge to stay ahead of fraudsters."

Similarly, BP Fuel Cards believes that technology has allowed credit card companies and fuel card suppliers to make huge leaps in security over the past few years (anyone remember paying for fuel with a cheque?). But fuel cards have the advantage of being a specialist tool. "That doesn't just mean giving fleet managers the ability to authorise, suspend or change PINs remotely, it means linking them into odometer readings whenever a fuel card is used," says BP Fuel Card's Allen.  "The result is accurate mpg figures based on the amount of fuel going into a vehicle, making it much more difficult to 'fool' the system."

Now, fuel cards are taking advantage of the age of 'big data'. That's why BP Fuel Cards recently launched a new driver and fuel-management platform called BP FleetMove. Designed in partnership with TomTom Telematics, this product is available in two iterations - the plug-in-and-go BP FleetMove and the more advanced BP FleetMove Pro.

"As far as trends go, the notion of 'big data' is the trend in itself, which is why companies are looking to use telematics and that is what will grow even more in future," says Allen.

"Essentially, it combines BP fuel card transaction details with vehicle and driver performance data via the TomTom Telematics service platform. 

"Easy-to-use mobile and desktop interfaces feed vehicle and driving information to fleet managers, helping them control costs and improve security."

The plug-in-and-go BP FleetMove platform has a one-off set-up cost of £39.35, doesn't require professional installation and is available with no long-term contracts. 

"Aimed at smaller car fleets, it gives managers the ability to access accurate vehicle data from a central dashboard - updated every 15 minutes - including fuel consumption, CO2 emissions and driver efficiency scores," says Allen. "Because all journey information is recorded automatically on a smartphone, it's very easy for managers to see exactly how vehicles are being used - and fuelled."

Filling Up Gas

BP FleetMove Pro also adds fuel card transactions to driver and vehicle performance reports. Features such as vehicle location, fuel consumption, driver behaviour performance and vehicle maintenance information from TomTom WEBFLEET all combine with BP fuel card information to provide full visibility and control over how fuel is being used.

The recent launch of the Allstar Plus card is helping the company's customers to not just focus on fuel, but to start taking more control over many vehicle-based and mobility-type expenses, and this is a trend that other fuel companies are also working towards. "While there is risk when purchasing fuel, there is also fraud risk across many other forms of expense and Allstar Plus helps businesses take a significant step towards achieving even greater control," says Holland. 

Allstar also works closely with a number of leading telematics providers to reconcile purchases on fuel cards with vehicle fuel consumption. 

"We have data links with many telematics partners and regularly work jointly with customers to refine reporting, to ultimately optimise control and identify anomalies quickly," explains Holland. 

This, coupled with the spending limits and maximum transactions that can be set on Allstar cards, is key to giving fleet managers peace of mind,
he says. 

However, the reality is that fraud will always default to the weakest point in any scheme or system. "As a result, customers not using fuel cards are significantly more at risk from internal fraud, whether using bulk tanks or pay-and-reclaim expense recovery systems," Holland adds. 

Unfortunately, there is no fail-proof fraud prevention strategy, so it is important that fleets maintain constant vigilance by examining every fuel expense statement looking for anomalies. 

If you identify potential fraud early, then action can be taken and, if the suspicious occurrence proves to be misuse or fraud, it will enable your organisation to stop the problem from escalating.