The issue of dishonesty in fuel usage is widespread across most fleets, regardless of scale. Let's delve into some common forms of fraud below.
Undoubtedly, this is a significant contributor to financial losses for businesses. To determine whether your fleet is affected by this problem, focus on the following aspects:
Do the reported kilometers by drivers align with the odometer reading?
Does the fuel quantity on the invoices exceed the tank capacity?
Are drivers refueling the correct type of fuel?
Is the kilometers per liter ratio consistently low?
If there are disparities or the data appears unreasonable, it's likely that drivers are not being transparent about fuel consumption.
Common forms of fuel fraud
To effectively prevent fuel fraud, it's crucial to grasp the methods and execution. Here are some key forms to consider:
1. Falsify the kilometers
This is one of the most prevalent types of fraud. Employees or drivers using personal vehicles for work without fixed routes can easily inflate the kilometers traveled when seeking reimbursement, which the business may not be able to verify.
2. Fuel theft or siphon
This method encompasses various practices, including using fuel for personal vehicles or transferring it to containers for resale.
According to a Shell survey, 93% of managers believe their drivers are dishonest about fuel, and over 25% of drivers admit to witnessing fraudulent behavior within their fleet.
3. Misuse of company fuel cards
As businesses increasingly adopt non-cash payments, the misuse of company-issued fuel cards is becoming more widespread. Drivers may lend these cards to others for refueling.
4. Refuel Incorrect Fuel Types
If an invoice indicates a different fuel type than what is permitted for the vehicle the driver manages, it suggests the transaction was intended for another vehicle.
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Prevent Fuel Fraud - Feasible or Not?
The short answer is yes. There are several ways to prevent fuel fraud, and Dibee suggests considering the following practices:
1. Monitor fueling frequency
Is the driver refueling excessively during a trip or within a single day of travel? If so, there's a chance they're fueling vehicles other than those owned by the company.
2. Utilize centralized digital payment methods
Using fuel payment cards (with PIN codes for added security) or mobile payments can enhance fuel transaction monitoring by recording and tracing each transaction with specific details such as time, location, fuel limit and the vehicle refueled.
PIN code in the fuel card makes it difficult for drivers to lend out the cards.
Additionally, the mobile app enhances management capabilities by identifying users (drivers) via their phone numbers. Managers can promptly adjust (allow or suspend) the fueling right for vehicles when abnormal transactions are detected through system data and notifications.
3. Easily establish fuel limits
Some fuel cards now have a feature that enables managers to set fuel limits per transaction. This feature restricts drivers to refuel only up to a specific limit, which can be based on either the vehicle's tank capacity or the distance traveled.
Dibee supports managers in setting fuel limits, refueling restrictions, and permitted fuel types for each vehicle, ensuring effective control over the driver-vehicle relationship.
4. Implement reward/penalty mechanisms
Additionally, you can introduce clear penalty measures for fuel fraud. To achieve this, businesses need an efficient management system to detect fraud and gather evidence for warnings initially, followed by penalties for drivers who persist in inappropriate behavior.
Conversely, rewarding drivers who save fuel compared to the set limit can boost motivation and encourage better performance.
Conclusion
Through this article, we hope you've gained a more accurate understanding of your fleet's fuel usage and obtained suitable fraud prevention solutions. We look forward to sharing more insights and fleet management experiences with you in future posts.
Wishing you success!