Fuel fraud represents approximately 5% of the total fuel expenditure for companies
Fuel card fraud and refueling transactions have experienced a drastic increase. According to experts from transportation and fuel industry companies, these tactics will continue to rise unless appropriate measures are taken to counteract them.
Motive, the company behind the Motive card for fleet and fuel management, surveyed over 100 leaders in the road transportation sector about fuel fraud. About half of the respondents indicated that fuel fraud represents approximately 5% of their total fuel expenditure. Given that fuel is the second largest expense for most of these companies, around 35%, it is noteworthy that 5% of this expenditure is fraudulently generated.
The increase in fuel card fraud is attributed to the high price of diesel. It is divided into two types: third-party and friendly. In the former, scammers install skimmers on fuel pumps to obtain card data for unauthorized purchases. Friendly fraud occurs when employees steal fuel or make unauthorized purchases.
According to Wayne Parham of Heavy Duty Trucking, companies like Pure Freight Lines have experienced monthly costs averaging between $4,000 and $5,000 due to fraudulent strategies. Figures vary based on the volume, frequency, and location of the thefts.
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Technology in fuel card fraud prevention
Fuel card fraud in road transportation causes impacts beyond direct financial losses. Educating drivers to detect these scams is challenging. Nonetheless, companies are seeking solutions to mitigate this problem. Some have opted to eliminate fuel cards and migrate to mobile payment applications, though some fleets show resistance to this change.
With the increasing adoption of telematics, measures are being implemented to monitor and authorize fuel transactions more efficiently. For example, Motive uses telematics to monitor fuel purchases and compare them with the amount actually added to the truck’s tank. This allows for the detection of deviations, alerting the fleet to potential fraud.
While there is no single solution against fuel card fraud, the growing adoption of software in the sector helps providers and fleets exercise greater caution. Measures such as alerts, single-use PINs, and other security devices present obstacles for fraudsters. Nonetheless, transportation companies must maintain close surveillance of any suspicious fraudulent activity.
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