No one likes the sinking feeling when you are reviewing your fuel card invoice and you see transactions that don’t belong to your fleet. Hopefully you have not experienced this before, but many fleet managers have at some point over the last 5 years as fuel card fraud has increased exponentially.
To give you an idea of how bad card skimming has become, FICO reported that card (payment cards in general) skimming activity during the first half of 2022 was up 759% from the previous year.
Why Is Fuel Card Fraud Such a Common Problem Today
The answer is the implementation of EMV (chip credit cards). For most merchants (non gas stations) the deadline to convert to EMV was October 2015. They allowed gas stations until October 2020 to convert to EMV because gas stations need to jump through a myriad of bureaucratic hoops and have more complicated equipment needs. This deadline was pushed to May 2021 due to Covid.
The problem is that the EMV compliance software focus was on credit cards because of the general public which has only pushed fleet cards down the line resulting in many gas stations only being compliant for credit card only.
Some fleet card companies such as Voyager have the capability to provide EMV cards, however only a minority of gas stations are accepting EMV fuel cards. Thus fuel card companies are still issuing traditional magstripe cards to customers so that they are not limited to the small percentage of EMV accepting gas stations.
How does this increase fuel card fraud? Since all credit cards already have the chip, it makes fuel cards a softer target for fraud at gas stations.
Fuel cards are still less desirable than credit cards for fraudsters since fuel cards can only purchase fuel. This means the fraudster will have to sell the fuel they purchase to make money on skimming a fuel card. This also means the higher fuel prices are (which have been at record highs over the last 2 years) , the more money they make and the more desirable it is to skim fuel cards.
Steps You Can Take To Protect Your Company From Fuel Card Fraud
For most of us, the problem is what it is. There’s not a whole lot we can do to push bureaucracies to expedite EMV compliance for fuel cards at gas stations. However you can use the tools a fuel card provides to protect your fuel card account from fraud. Here’s some steps you should take.
Step 1: Make Sure the Fleet Card You are Using Provides Fraud Coverage
If fraud does occur on your account, can you submit a claim with your fleet card company and get reimbursed for those fraudulent transactions? Some fleet cards do not provide fraud coverage and some fleet card managers find that out after the fact.
Step 2: Make Sure Your Fleet Card Has Fraud Monitoring
Some fleet cards have a system that uses algorithms to find abnormal purchase behavior and sends you alerts and temporarily disables a fuel card until the activity is verified by the fleet manager. Some fleet cards even go a step further and will automatically cancel cards that are used at known compromised gas stations that found skimmers at their pumps. This cancels the card before the fraudster can take your data and make a new card.
Step 3: Monitor Your Fleet Card Purchases Daily
Most fleet cards will have an online portal to view daily transaction reports. Some fuel cards can even send you daily reports to your email to review all purchases.
If you want to really be on top of it, you can set up automatic purchase alerts or receipts to be sent to your email immediately after every transaction.
You just need to get into a habit of reviewing your transactions often so if you detect any odd activity you can turn off the card immediately to minimize the damage. The last thing you want to do is wait until your invoice comes to find out there is thousands of dollars of fraud on your account.
Step 4: Setup Strict Controls
All too often we see people who want to keep their fuel cards open with high limits or no limits. The problem is, if your card gets skimmed, the fraudster can do a lot of damage since there are no limits on your fuel cards.
It’s important to set up the strictest limits you can on each fuel card without affecting your fleet’s operations.
Taking these steps will also add the bonus benefit of protecting your fuel card account from internal employee misuse and theft.
