Shell Fleet Solutions (SFS) recently released a new study on fuel fraud and misuse, citing that a single incident of fraud could potentially cost up to $80,000.

The report draws from professional insights, SFS program data, and surveys.

Research also found that fleets are losing up to 5% of their annual fuel spend to misuse, making fraud and misuse one of the most significant persistent issues for fleet managers. Shell surveyed fleet managers on the issue, and over 70% of them reported that reducing these costs is a top priority.

Fuel Misuse: The Silent Budget Killer

Fuel fraud and misuse, although similar, are not identical. To help prevent each effectively, discerning between the two is essential.

External and criminal metrics, such as card skimming, cloning, and stolen credentials, may categorize fraud. According to the FBI, this type of fraud has increased massively, costing institutions and consumers over $1 billion annually.

On the other hand, misuse is trickier. Typically, unintentional misuse is behavior-based and often manifests in personal purchases, mileage claims, and unnecessary expenses, such as premium fuel.

What’s the impact, then?

“Almost every fleet manager will say ‘yeah, I know this stuff happens,’” Shell Key Account Manager Cole Metcalf said. “But they don’t always get just how prevalent and costly this problem is. At a minimum, we have seen 2-5% of fuel spend lost to misuse every year. And that’s exactly why fleets need to be proactive about prevention.”

While fraud is not as common, it packs a bigger punch, with each case reaching anywhere from $60,000 to $80,000.

Here’s What Acts as a Barrier for Fleet Managers

Fleet managers often lack visibility into analyzing the data behind fuel misuse and fraud. Depending on the fleet, managers review anywhere from 100 to 1,000 transactions each week – so how do they access that detailed data without getting overwhelmed by numbers?

It starts with understanding the prevalence of the issue within the industry. That, along with tight schedules and time constraints, prevents managers from building it into their busy schedules.

There are also no formal policies regarding fuel spend regulations that would require managers to allocate time for these issues.

“In a way, time is the biggest barrier for fleet managers to prevent fraud,” said Chris Nolan, Shell Global key account manager. “Juggling so much every day, it’s hard to find time to think about this fuel problem, time to design policies about it, time to monitor purchases, and time to take action to stop it.”

How to Minimize the Issue

There are some quick and easy ways to spot fraud. Shell experts recommend implementing a clear fuel policy and using the right tools, such as transaction controls and alerts.

Establishing a clear fuel policy

Tailor fleets to limits based on vehicle type grade, role, and geography. This includes managing driver behaviors, such as handling PIN numbers and storing fleet cards.

Transaction Controls and Alerts

Fleets can use real-time monitoring to manage expenses and costs. This allows for alerts to flag any suspicious or unusual activity. Exception reporting also flags issues early on.

Incorporating effective payment tools deepens transaction control and provides structure. Mobile pay options, such as tap, can help create more secure transactions while also reducing card loss and input errors during the sale.

There’s Peace of Mind in Prevention

Just like with preventative maintenance, fuel fraud and misuse prevention provides a big return on investment for fleets. Incorporating more visibility over fuel transactions and purchase controls can reduce costs, improve operations, and remove threats.