How to Ensure Secure Fuel Card Transactions

Fuel cards make it easy for drivers to pay at the pump and for fleet managers to monitor purchases. Like any other purchasing card, they can also be subject to fraud and misuse. Fraud could come in the form of card skimmers or use of a stolen card. Misuse might include an employee using a fuel card to purchase fuel for his or her personal vehicle, a friend’s vehicle, or purchasing unauthorized merchandise at the convenience store.

Even though there are risks, following these four steps can help keep fuel card transactions safe.

1. Create a Policy

Before drivers even make their first purchase, set a policy for using the card first.

“One of the biggest mistakes we see fleets make is not having a fuel card policy in place to begin with. This is step one in preventing misuse, fraud, and maintaining profitability,” said Brian Truman, vice president, public sector at Comdata. “Once a policy is in place, set your employees and drivers up for success by educating them on those outlines and sending frequent reminders.”

Fuel card policies should include things like:

• Where fuel cards can be used
• Guidelines around purchasing limits
• Fuel grade restrictions
• The types of purchases that are and are not allowed
• Security guidelines
• Where cards should be kept
• How to report fraud or misuse
• Consequences for policy violations.

Bernie Kavanagh, SVP/GM, large fleet & strategic relationships at WEX, said while these are the key components of a fuel card policy, it should be tailored to the needs of each organization.

“Fleet managers should know the needs of specific drivers and vehicles and build the policy based on that knowledge,” he said. “Once the policy is built, create transparency and awareness of the program. The most successful fleets have drivers sign an acknowledgement of the policy as part of the Human Resources function.”

Truman said while creating a policy is an important first step, enforcing it is equally important.

“A big mistake fleets make is simply not following and policing their own fuel card policy,” he said. “Have consequences in place for those drivers/employees who break policy, but also ensure those at the top management level have the resources they need to enforce those policies. The fleet manager also needs to have the policy readily available and reviewed often by drivers to ensure it’s always top of mind.”

2. Train Drivers

In addition to having the fuel card policy readily accessible to drivers, it’s also important to provide training that drives home the practices they should follow as card users.

Cheryl Garcia, senior vice president for government transportation at U.S. Bank, said there are some routine pointers fleets should provide drivers. U.S. Bank Voyager recommends some key guidelines for fleets to protect themselves from misuse and fraud, including the following:

• Card storage: Drivers should store the card in a secure location and never leave it out in the open.
• PIN protection: The PIN should be kept in a separate place from the card, and it should never be shared with anyone not authorized to use the card (the card itself shouldn’t be shared, either).
• Communication: If a card is lost or stolen, it should be reported immediately. The same goes for any suspicious transactions.
• Awareness: If something seems off about a fuel pump, drivers should avoid it and go to a different pump or pay inside instead. Drivers should also keep a close eye on their card when handing it over for payment and ensure it’s returned immediately.

Kavanagh also recommends educating drivers about card skimmers.

“Skimming happens when fraudsters place a device on the pump that looks like a card reader. The driver swipes the card, the skimming device captures the cardholder data, and the data is used to create a new card that can be used to buy fuel at a different location,” he explained. “Drivers should be aware of and know how to identify skimming devices attached to fuel pumps. Fueling at pumps clearly visible from inside the store make it less likely a criminal has attached a skimming device.”

3. Set Controls

No matter how well you train drivers and communicate your policy, there is still a chance  a card could be misused or fraud could occur. Fortunately, fleet operations can put controls in place to help mitigate these circumstances.

“Strong controls will not only ensure spend is within the card policy guidelines, but will limit fraud exposure as well,” Garcia said. “Controls can be configured for specific vehicle or driver types or groups within a fleet. Aligning controls to the specifics of your fleet and  usage are key best practices. For example, based upon the type of vehicle, tank capacity, fuel efficiency, and number of hours of vehicle usage each day, there is a maximum expected usage that can help you determine the exact controls to protect your fleet.”

Kavanagh underscored that while “controls” may sound stringent, fleets can adapt them as needed.

“We recommend knowing your fleet and being flexible,” he said. “Different vehicle types have different needs. It is important to look at the job duty the employee or vehicle might be performing for a particular department or agency,” he said.

Kavanagh said it’s important to keep in mind that seasonal needs may change purchasing behavior, so it’s wise to have a policy and notification process for drivers who may need to have their purchasing permissions changed from time to time.

Truman said fleets should resist the temptation to skip establishing controls.

“The biggest ‘don’t’ is keeping card controls wide open without setting parameters for fleet protection,” he said. “Take the time to set things up carefully and correctly on the front end and then monitor the activity to make any adjustments as needed.”

4. Use the Tools Provided

Once fleets set controls, they can then monitor purchase activity and run reports to ensure the program is running as intended.

“A fuel card provider may have various monitoring tools that can be used to determine and report how well drivers are adhering to their policy and procedures and also alerts to areas of performance concern,” Truman said. “Fleet managers should look into such platforms that can set ‘decision rules’ that will automatically apply when the system is triggered by suspicious activity, such as buddy fueling, skimming, fuel theft, card counterfeiting, and other illegal activity.” To get the most complete protection, Truman advises fleet managers to leverage all the data points available to them on their fuel card platform.

Garcia recommends linking transactions to specific drivers by assigning each one a designated PIN.

“Fleet card spend reporting can be used to identify out-of-­policy spend and will tie it to specific drivers for remediation,” she said. “But if you don’t assign unique PINs, individual transactions cannot be tied to a specific driver in many cases, which makes auditing out-of-policy spend difficult.”

If exceptions do crop up, Kavanagh recommends giving drivers some grace.

“Assume the best of your drivers and work with them to determine the cause. There could be an explanation for any anomalies, whether it was an honest mistake made by the driver or potentially external fraud,” he said. “Use analytics and reporting to uncover spending anomalies at the pump, but don’t jump to conclusions that an anomaly means intentional misuse of the card. The easiest way to lose a driver’s trust and willingness to work with you is by assuming the worst and making false accusations. In order to remain one step ahead of criminals, fleet managers need to work together with their drivers to prevent fuel card fraud.”

Kavanagh said ultimately, the fleet manager is in the driver’s seat when it comes to security.

“A fuel card program can provide the tools to help reduce fraud and employee misuse, but the fleet manager is an important piece of the puzzle,” he said. “It is critical that the fleet manager uses the tools and reports to maximize the value of any fuel card program.”