A guide for fleet managers on fraud prevention & detection – Part 2

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In my last article, we looked at some of the different frauds that fuel cards are particularly susceptible too, Skimming, Abuse of Genuine Cards and Site Collusion. This piece will look at Lost or Stolen Cards, Application Fraud, Counterfeit Card, Swapped Card and Card not received fraud, alongside ways fleet managers can help to detect and prevent those types of fraud.

Lost or Stolen Cards. Unfortunately, sometimes cards either get lost or stolen, it’s inevitable. When stealing a fuel card for use, fraudsters can either simply steal the physical card or attempt to steal the physical card as well as the PIN number. If they do not obtain the PIN number the card has limited uses, for example it often cannot be used to fuel cars and trucks in countries that have adopted EMV, but it can be used for Motorway transactions as these often do not require pin entry.

Although there is no way to fully protect drivers from losing their fuel card, there are some best practice guidelines that they can follow.

  • Educate drivers on ensuring their card always stays on their person and is never left unattended.
  • Encourage drivers not to write their PIN number on the card, on anything stored along with their card or anywhere within their vehicle. If a card with EMV (chip and pin) is lost or stolen and used by a fraudster, who has successfully used the card at an EMV terminal, this often makes the driver liable for the costs of fraudulent transactions. This is because the driver has not taken due care to keep his personal PIN number secure.
  • Always report lost or stolen cards as soon as it is apparent. The earlier it is reported, the earlier the cards can be blocked, meaning no further transactions can take place.
  • If possible link the fuel card to the registration of the vehicle. This means that transactions can only be made for the specified vehicle.

Application fraud is committed when a fraudster or group of fraudsters impersonate a business to open an account, often using fake or stolen documents, to access financial gain.

Fuel card application fraud is exceptionally appealing to fraudsters as it can give them access to a large variety of cards for which they can access many products from, without having to pay. If successful upon application, fraudsters are given access to several fuel cards, for which they are often invoiced for after a period of X weeks. Therefore, the fraudsters can use the cards until the invoice date. This is often when the fraud is uncovered, by non-payment of the invoice.

  • Ensure new accounts have valid and relevant documentation to corroborate the information they have provided in their application. Always ensure that thorough checks are conducted on this information, for example address searches.
  • Conduct background checks on the individuals that are named on the application.
  • Conduct credit checks for businesses that wish to complete an application.
  • Like the prevention tactics for avoiding skimming, it is best practice to limit the amount of money that can be spent per day on fuel for new cards. This is achieved by using a daily or weekly limit. It is also possible to restrict cards for use only on fuel, therefore not allowing other goods to be purchased such as shop goods, and you can even restrict it to a fuel. If a transaction is attempted once the limit is reached, an ‘exceeds withdrawal limit’ authorisation code would be encountered, and the transaction would be declined. Although this wouldn’t be able to avoid any usage by fraudsters at all, it would help in limiting the amount of money they were able to spend with fuel cards.

Counterfeit cards are produced using stolen or falsified PAN numbers. They are created using a non-official issued card but often appear to look legitimate, with imitated logos and encoded magnetic strips. In the cases of stolen card information being used the information is stolen from victims who are often still in possession of the original card. Falsified card numbers are harder to generate as they require the use of BOTs to generate and test to identify legitimate card numbers, however this is becoming increasingly popular.

Frequently in the instances of Counterfeit cards the PIN number is not known therefore they are used for transactions that do not require a PIN, like lost and stolen cards; motorway transactions and tolls.

  • Educate drivers on ensuring their card always stays on their person and is never left unattended or out of sight. This can limit the availability of data to be stolen and used to produce counterfeit cards
  • Regularly check transaction lists and invoices with the owner of the card to ensure that all transactions that have occurred have legitimately been made by the owner.
  • Shred unwanted financial invoices and other information that contains important information.
  • If possible link the fuel card to the registration of the vehicle. This means that transactions can only be made for the specified vehicle.

Swapped cards are like Counterfeit and Stolen Cards. This is because swapped cards occur when the original card is stolen from an individual and replaced with another that looks the same. The cards they are replaced with are often either out of date or blocked.

  • The desire to replace a card is to attempt to deter detection of the fraud for as long as possible. If the individual believes they are still in possession of the card but it now no longer works they are less likely to report it as being stolen, rather just request a replacement.
  • Educate drivers on ensuring their card always stays on their person and is never left unattended or out of sight. Allowing a card out of sight widens the opportunity for it to be swapped for another.
  • Regularly check transaction lists and invoices with the owner of the card to ensure that all transactions that have occurred have legitimately been made by the owner.
  • If possible link the fuel card to the registration of the vehicle. This means that transactions can only be made for the specified vehicle.

Card not received fraud refers to instances in which a card issued and dispatched by a company is not received by the customer/end user. A replacement card is then dispatched. However, the original card has been intercepted by fraudsters and is later misused with or without a PIN Number.

Card issuers ensure that cards and PINs are not sent in the same envelope, much like banks do however if a fraudster is able to intercept a card, it is just as easy for them to intercept a PIN number as well. But also, as mentioned previously a card can still be used without the PIN number, therefore they are still able to misuse it.

  • Educate that if a card is not received, the original card is cancelled, added to a hotlist for toll transactions and a new card with a new PAN is issued.
  • Regularly check transaction lists and invoices with the owner of the card to ensure that all transactions that have occurred have legitimately been made by the owner.
  • If possible link the fuel card to the registration of the vehicle. This means that transactions can only be made for the specified vehicle.

What steps can you take the spot and reduce fraud?

As the owner or manager of a fleet business there are a variety of things that you can do to help identify potentially fraudulent transactions occurring on fuel cards. Proactive monitoring of accounts is key in the fight against fraud as well as ensuring that all staff are educated on best practice protocols on having and using fuel cards. Things to look out for:

  • Keep an eye out on frequent fill ups. Multiple stops at different stations throughout a day could be a sign that something suspicious is happening.
  • Pay attention to Trip Reports. As a manager or owner of the company, you should be aware of the fuel efficiency of your vehicles. If a vehicle has fuelled up the maximum you should be able to calculate how far they can travel before needing fuel again. If they are fuelling more frequently, this can raise an alarm.
  • Try to compare all statements to receipts provided from drivers. Collecting ‘proof’ of all transactions from drivers can also help deter fraudulent behaviour through the fear of getting caught.

Unlike many articles, this piece is not intended to frighten retailers, but it is meant to be a helpful guide to future proofing fuel cards and beating the fraudsters at the pump. Isn’t it about time you took control and simply stopped fraud?

By Matthew Attwell, Risk & Client Services Director

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