Here’s a shocking statistic: 86% of vehicle managers believe fuel fraud currently takes place in their organization.
When fuel purchases go unchecked, it opens the door to fraud. The most common types of fuel theft and misuse include:
- Stolen fuel cards
- Filling up a personal vehicle or gas can for personal use
- Taking cash to fill up another person’s fuel tank with a company card
- Purchasing items other than fuel at the station
- Filling up with a higher-grade fuel
- Using a card at unauthorized locations for personal purchases
Fuel fraud can account for 10-15% of your fuel budget. Fuel is typically the top vehicle-related expense for contractors, so losing 15% can add up to a lot of money.
When you’re managing a construction business, it’s easy to lose oversight on fuel purchases. You and your team are constantly on the go, traveling between job sites and client visits and dealing with demanding schedules. But when 15% of your fuel budget is at stake, taking measures to prevent fuel fraud and misuse needs to be a priority. Fortunately, modern day fuel cards and fuel risk management platforms can make it easy to follow these tips to spot and stop fuel theft.
Legacy Versus Modern Day Cards
Let’s start by looking at where fuel management has been and where it’s going.
Some contractors use fuel cards as a means of tracking fuel expenses. Any monitoring activity is better than none, but legacy fuel cards tend to have limited monitoring capabilities and require manual work to find fraud. That’s not a reasonable solution for a busy contractor.
It’s no surprise, then, that the demand for enhanced card controls and advanced fraud detection and prevention capabilities has increased in recent years. Modern-day fuel cards employ AI, data integration, real-time SMS messaging, and advanced security features to ensure theft and misuse don’t go unnoticed. These advancements make it easier to put measures in place to cut your fuel fraud losses.
Tip #1: Control Spending Limits
Letting every one of your drivers have fuel cards without spending limits in place pushes the door wide open for fuel theft. Imagine if the card is stolen — a thief can do a lot of damage in a short period of time.
In the old days, you could establish a general limit for your general fuel card account. That doesn’t do much good if a thief goes on a spending spree and blows through the limit using the stolen card. Now, you’ve lost one fuel card, but you’ve also cut off purchases for the rest of your cards, preventing your team from purchasing fuel and crippling your business.
Modern-day fuel cards and platforms allow contractors to customize spending limits by cards, drivers, or vehicles. For instance, if a vehicle’s tank capacity is 15 gallons, you can set a limit that says the card can’t be used to purchase more than 15 gallons of fuel in an hour, day, or week.
Modern fuel risk management platforms also let you set up rules like the number of transactions in a day, the types of merchants and stores where they can be used, and the hours during which they can be used. Rules like these prevent cards from being used for purchases that aren’t business related.
Additionally, modern fuel risk management platforms with cards also allow you to set specific spending limits for different types of merchants. For example: you can have a customizable card spending limit of $1,000 for the week and split it any way you choose. For example:
- $500 for fuel
- $300 for vehicle maintenance
- $150 for hardware and supply stores
- $50 for wiper fluid
Tip #2: Monitor Transactions in Real-Time
Beyond establishing spending controls, getting alerts for transactions that exceed predefined thresholds helps you make sure unauthorized use doesn’t go unnoticed.
Older fuel cards provide some visibility, but it typically takes two to three days for the activity to be visible online. When access to transaction data is delayed, unauthorized fuel purchases can go undetected, and the fuel card user cannot proactively block suspicious transactions.
Imagine if you couldn’t see suspicious activity for three days. That fuel card thief now has a full three days (at least!) to use your fuel dollars for their purchases. These purchases can add up to significant financial losses, especially over time.
Modern fuel platforms issue SMS (text) transaction alerts in real time so contractors can track fuel expenses as they occur and take immediate action when the platform detects anomalies. These platforms can also automatically block transactions that don’t meet pre-set spending controls, preventing fraud before it happens.
The real-time oversight modern fuel platforms offer gives you tighter control over your fuel budget and prevents financial losses due to misuse.
Tip #3: Deactivate Stolen Cards Immediately
Thieves aren’t the only people who have used fuel cards to fund spending sprees. I’ve talked to more than a dozen business owner who have fired an employee who immediately turned around and swiped thousands of dollars in fuel purchases in retaliation. It typically takes one to two business days to deactivate a legacy fuel card, which can add up to a real disaster. When a card is stolen, you don’t want to wait to deactivate it.
Next-generation fuel platforms make it easy to deactivate cards, which adds another layer of fraud prevention. Reactivating a card or assigning it to another driver also takes just a few seconds with modern fuel card solutions.
SMS-based security offers yet another layer of protection for modern fuel cards. Every card is linked to a cell phone number and can only be unlocked for use following an SMS card unlock process.
Tip #4: Integrate with Telematics
Integrating fuel purchase data with vehicle and location data collected by telematics devices can automate the process of fraud prevention.
If your company vehicles use telematics, modern fuel management platforms can integrate with GPS location data to verify the vehicle, driver, and fuel card are all located at the same fueling location. This three-point authorization system makes fuel fraud that much more difficult. When a card is being used more than 100 meters from the authorized vehicle, transactions can be automatically blocked.
Another method for preventing fraud is using telematics to monitor tank capacity and fuel levels for each vehicle. When a purchase exceeds a vehicle's tank capacity, you can tell the platform to automatically decline the transaction.
Telematics can also provide alerts for unusual fuel consumption patterns, such as sudden spikes in fuel usage, which may indicate theft or misuse. Together, telematics and modern fuel management platforms offer a proactive approach to fuel security, help prevent theft, and ensure fuel is used for legitimate purposes.
Tip #5: Leverage AI-Driven Insights
The advent of Artificial intelligence (AI) has been a game changer for spotting and stopping fuel fraud.
AI-driven fuel management platforms can analyze vast amounts of data quickly and accurately to identify patterns and trends that may not be apparent to the naked eye, providing real-time insights into fuel expenditures and detecting anomalies that may indicate misuse or fraud. This capability makes it far easier for contractors to address issues before they become major problems.
A great example is an organization I worked with whose platform automatically detected a driver was consuming 10 times more fuel than their peers. Based on this insight, the fleet manager investigated and addressed the issue promptly, preventing further fuel waste and reclaiming the cost of misused fuel.
AI also powers reports and dashboards that can provide a comprehensive view of fuel usage, which helps you identify trends and areas for improvement. Legacy cards offer reporting on an account level, but modern-day fuel platforms offer reporting by vehicle, card, and driver. You’ll also be able to look back at how many gallons you purchased compared to the number of miles driven to identify any potential fuel fraud.
Fighting Fuel Fraud Has Come a Long Way
Fuel fraud and misuse prevention capabilities have come a long way. The comparison between legacy cards and modern fuel management is stark.
The good news for contractors is that the latest fuel card platforms have made it tremendously easier to spot fuel misuse and theft. In fact, RoadFlex card users save an average of 11-15% on fuel costs by identifying anomalies and preventing misuse. Who wouldn’t want to reclaim those dollars?
Rush Akin, chief revenue officer at RoadFlex, is an experienced veteran in the fleet industry, with over 22+ years of experience in fleet management. Before joining RoadFlex, Rush served as the SVP of sales for Solera, where he was in charge of overseeing fleet sales and business development in North America. Prior to Solera, Rush worked with well-known brands in the industry, such as Rand McNally, Lytx, FourKytes, and Syntech Systems Fuel Master. Rush has a strong background in fleet and fuel management, as well as customer success.
