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Say farewell to fuel card fraud


June 3, 2010
by Deborah Aarts

As useful as fleet cards can be in allowing drivers to purchase fuel on the go, they can expose companies to several types of fraud.

One is theft from organized criminals who have caught on to the fact that most fleet cards have very few controls when it comes to usage. Aside from periodic velocity reports sent to fleet leasing companies, there is little to no regular monitoring of behaviour, allowing individuals to skim card information and use it several times before being caught.

One stolen fuel card can cost a company between $8,000 and $10,000 a month.

Another type of fraud is light pilfering among drivers, who may think it’s fine to top up their kid’s car or fill a jerry can for the cottage at the company’s expense every once in a while.

Then there is unintentional misuse. For instance, this can happen when a driver’s company car is in for service. She might borrow her husband’s SUV for the day and fill up the tank with $100 worth of fuel—far more than she would use in a normal day with her compact car.

While the intention and severity of these three examples vary, they share one common thread—whether slowly or quickly, they cost companies money. According to Jim Forbom, vice-president of client services at Foss National Leasing, a single stolen card can ring up between $8,000 and $10,000 in a month.

Countering the threat
The increasing prevalence and cost of fraud got Forbom and his team thinking about possible solutions.

“The goal when we started was to find a way to analyze the data to help us very quickly identify a card that might be being used incorrectly,” he says.

His team determined that in order to curb fraud, companies needed more data, more often. Working in concert with fuel vendors, it started a program of pulling data in real-time and running frequent velocity reports to alert managers of misuse.

The program rolled out in the fall of 2009. Since then, the company has achieved daily visibility into close to 90 percent of its daily fuel transactions, which translates into tens of thousands of data points. That information is applied against 24 tests, ranging from fill-up habits to type of fuel to more sophisticated pattern analyses. If any anomalies appear, the company is alerted so it can investigate further.