Expert Shares Tips for Fuel Fraud Protection

“I think we all acknowledge that fraud is happening,” Hemant Banavar says. (John Sommers II for Transport Topics)

[Stay on top of transportation news: Get TTNews in your inbox.]

AUSTIN, Texas — A strategy for tackling fuel fraud across the industry is to identify what is causing it and adopting a plan for stopping it, a freight expert said at an Oct. 15 educational session at American Trucking Associations’ 2023 Management Conference & Exhibition.

“I think we all acknowledge that fraud is happening,” Hemant Banavar, vice president of product at Motive, told the audience. He leads the firm’s financial products division, which includes the “Motive Card.”

Banavar described fuel fraud as a silent epidemic capable of raising the cost of doing business for executives industrywide. He pointed to card skimming and other illegal methods individuals are known to pursue to capture a company’s fuel purchasing information.

Reliable strategies fleets could adopt to avoid and prevent fraud associated with fuel is to establish a centralized digital presence for managing transactions. Banavar explained a variety of companies are seeking telematics systems to reduce exposure to card skimming.

A common telematics system sets purchasing controls for drivers and monitors quantities of gallons that are authorized at the point of purchase. A digital presence would enable companies to set payments online without the use of a traditional physical card. Lacking a physical card minimizes the risk that a third party would skim the data.

“Essentially try to find a system that would bring all of this together for you,” Banavar explained, pointing to a telematics ecosystem that organizes and manages data about transactions, drivers and vehicles. “This does a couple of things: It takes away a lot of the … repetitive tasks that somebody needs to do, and it also increases the accuracy and ability to detect things that you otherwise wouldn’t have detected.”

Benefits associated with digital payments also include merchant loyalty programs and certain discounts at specific locations.

A common safeguard for companies is setting purchasing limits at pre-approved fuel locations. Setting such spending controls has become an ideal strategy for protecting against fraud, Banavar explained, adding: “There are tools and technologies that do this very well.”

According to background Motive provided, “Fleet fuel fraud is a quiet epidemic that is probably affecting your operations more than you think. Fuel is 30-60% of your total operating costs. And 5% of your fuel spend may actually be fraudulent. Fraudsters — sometimes your own employees — are filling up their pockets and their tanks.”

A Motive financial product includes the “Motive Card,” which is an embedded fintech capability allowing firms to rely on a single, integrated platform.

Card skimming utilizes illegal devices that steal credit or debit card information. Skimmers are installed on ATMs or fuel pumps to capture card data. Stolen card information typically is used to purchase and quickly resell fuel illegally.

The American Transportation Research Institute ranked the cost of fuel third on its “Critical Issues in the Trucking Industry” list in 2023. ATRI determined: “After a short-term decline in spring, fuel prices began another steep rise in summer due to a combination of geopolitical and environmental factors.”