Preventing Fuel Card Fraud: What You Need to Know

donlen-fuel-credit-card-fraudIn a special two-part series starting today, FridayFleet will focus on fuel card programs. In today’s issue, we’ll look at one of the industry’s most pressing issues: credit card skimming.

We spoke with Kim Space, Director of Risk Management at Comdata, and Kathy Quinn, Donlen Manager of Fleet Fuel Programs, about skimming, the potential financial impact, and ways that you can help prevent fraud in your company.

“Skimming has become an everyday occurrence, especially at fuel merchants, and card numbers are being compromised at a level that I’ve never seen,” said Kim.

Skimming is the theft of information used during transactions where a credit card is swiped. The criminal places an electronic skimming device that captures your card data inside the fuel pump or over the card slot of an ATM machine. These devices can be installed in seconds and are difficult to spot.

And skimmers are hitting the U.S. market hard – partly because we’re still using a lower technology on our credit cards: the magnetic strip. Most of the world has changed to “chip and PIN” technology, which can lessen fraudulent activity – at least for in-person transactions. These cards have a computer chip embedded in the card and require a PIN number at the time of transaction. Chip and PIN is starting to become available in the U.S, but it may take years. For now, awareness and prevention is key.

“Skimming equipment is so easy to acquire that the speed at which the cards are compromised and put into production is incredibly fast,” Kim went on to say. “And because it’s accessible and so many payments are electronic, it’s a lucrative operation for criminals. They have become sophisticated ‘businesses’ that are difficult to track, and the problem continues to grow.”

A quick online search for skimming equipment verifies what Kim said. So if it’s so easy for the criminals to obtain the equipment, how can companies protect themselves against fraud?

Proactive Account Monitoring

Donlen has numerous authorization controls in place. For instance, we’re notified when a card meets criteria for our rules such as purchases in high-risk areas and three or more transactions within an eight-hour period.

“We’re watching, but we rely on customers to also monitor their activity closely,” said Kathy. “They are more familiar with their drivers’ activity and vehicles, and they can spot something out of the norm right away.”

The bottom line is that you not only need to have the right program and policies in place, but you need to monitor transactions carefully and often. “I used to advise managers to monitor their reports weekly. Now I say daily, especially for larger companies,” said Kim. “This may seem unrealistic, but the speed at which skimmers work is incredible. And once they have your information, it goes fast: with Internet transactions, an entire card limit can be reached in about two minutes.”

Disputing charges is also more difficult if you’re not monitoring regularly. You only have 30 days to dispute terminal transactions, and you need to be proactive going after fraudulent charges as soon as they are discovered.

“I found more than $7,000 worth of fraudulent charges on one card that were never filed because the company failed to get the driver’s signature on the dispute request,” said Kathy. “That can be avoided with a more proactive procedure.”

“Why did you decline my driver?”

Everyone is busy and it’s easy to become frustrated when your driver contacts you saying that the card has been declined. Your first instinct is to tell your fuel card provider not to decline the card, and remove the rules in place that caused the decline to occur. However, that may not be in your best interest.

“Until companies have experienced fraud, they think declines are a nuisance,” said Kim. “But once they have a loss, they understand and appreciate the measures that we have in place to protect them. Fraud can have a huge impact on a business; skimmers can quickly use up the entire balance on their account leaving them with an inability to fuel their fleet.”

What can you do?

There are ways to help prevent fraud. Two important “red flags” to watch for include:

  • Number and dollar amount of transactions: If most of your drivers fill up once per day and you know their vehicle holds approximately $200 worth of gas, changes are easy to spot. Check with the driver if you begin to see irregular filling paterns — either in quantity or dollar amount.
  • Location of fuel stations: Most regional drivers go to the same few stations to purchase fuel. If you start to notice different stations, verify with the driver that the purchases are valid.

For customers, Donlen recommends using Level 3 and Pay at Pump procedures for fuel card accounts whenever possible, which can be set in our system. Level 3 only requires the odometer and Driver ID be entered which is verified at the pump. Pay at Pump keeps the drivers outside and prevents them from going inside for a second transaction.

“As much as possible, we want to keep drivers outside,” said Kathy. “We’ve seen second transactions occur inside the station with product codes for items such as cigarettes. We watch for those codes and report them to customers. Pay at Pump helps to eliminate that.”

According to Kim, Level 3 and Pay at Pump provides the highest level of protection. There are fewer counterfeit cases with cards that are locked down to pay-at-the-pump, and driver theft and misuse is also lower. “When someone knows they’re being tracked, they’re less likely to attempt to steal.”

In addition, requiring driver ID is one of the best types of protection. “Remind drivers never to write their ID on the card. We do see this happening,” said Kathy. “Why make it easier for someone who steals the card to make fraudulent purchases? Except in very rare cases, you can’t dispute transactions where the driver ID has been entered.”

Educate Drivers

Key to preventing fraud will be to educate drivers so they are aware of the risks. Aside from not writing their ID on their card, here are a few additional tips to pass along when purchasing fuel:

  • Whenever possible, use the fuel terminals closest to the stores. Attendants have a better view and can help watch for skimmers being inserted into the terminals.
  • Check the card reader to make sure that it is part of a solid piece of the casing; there should be no spaces around the device.
  • If there is any doubt, drive away and choose a different station.
  • As a courtesy, alert the station manager that you suspect a skimming device.

Proven results

Donlen partners with Comdata to provide customers with our Donlen Fleet MasterCard® Card and comprehensive fuel program. Comdata is a leading business-to-business provider of electronic payment solutions. They capture and report detailed transaction data, giving customers unprecedented control over their expenses.

“Our relationship with Donlen is especially productive,” said Kim. “Their customers have two levels of protection: Donlen has best practices in place with Comdata, and ours. Because of that we have some of the lowest basis points for fraud in the industry.”

In part two next week we’ll look at cost controls, available business intelligence reports, and other fuel program options.

Kathy Quinn can be reached at 847-412-5273.


donlen-nafa-casino-night-2013

Heading to NAFA? Join us for a fun evening of skill and chance

Thursday, April 25, 2013
6:30 to 9:00pm

The Palm Restaurant
2801 Pacific Avenue
Atlantic City, NJ
Transportation will be provided

Enjoy cocktails and hors d’oeuvres as you test your skills at Craps, Roulette, Blackjack, and Texas Hold’em. (But don’t worry, the “fun money”* is on us!)

RSVP by April 5
Questions? Contact Ann Jonas at 847-412-4912

*This event is for entertainment purposes only. Games will be played with fun money and no real wagers will be allowed or accepted.


FleetWeb® Tips

donlen-fleetweb-image-dvn-searchQuickly access all document images related to one vehicle in FleetWeb.

  1. Type “image” followed by the Donlen Vehicle Identification (DVN) in the upper right search box. (For example “image 12345”). Hit Enter or click the search icon.
  2. Choose which images to view by clicking on the icons on the left column.

Hertz Value Lease™ Deal of the Week

donlen-hertz-value-lease-nissan-sentra-0308132012 Nissan Sentra S*

  • Estimated Mileage: 19,101
  • Exterior Color: Blue
  • Hertz Value Lease Base Price: $13,846

*Vehicle was available at the time of posting to FridayFleet. The exact vehicle may not be available after this date. Photo of vehicle is for illustrative purposes only. Contact your Donlen Account Manager to learn more about Hertz Value Lease vehicles that may be right for your application.


Driver’s Corner

Credit card fraud is a huge issue around the country, especially at fuel stations. To help avoid having your card information compromised, use the fuel terminals closest to the stores. Attendants have a better view and can help watch for skimmers being inserted into the terminals.


And Finally…

And finally, luxury automakers continue to develop products that extend their brand off the road. Lamborghini is celebrating their 50th anniversary with a limited edition BMC road bike. This special edition bike will set you back 25k Euros. (That’s $35,000 for those doing the conversion in their head right now.) But for that price, you can be comforted that there are only 49 others who will have the same two-wheeler. And for the baby who has just about everything, there’s the Aston Martin baby stroller. The Silver Cross Surf is called “the world’s most outstanding contemporary baby travel system” with an “Aston Martin Edition chassis.” It’s available for about $3,000 at Harrods. Travel system, indeed.

Have a nice weekend. Safe travels.

Originally appeared in FridayFleet on March 8, 2013


About Donlen
A wholly owned subsidiary of The Hertz Corporation (NYSE:HTZ), Donlen (www.donlen.com), with headquarters in Northbrook, IL, is the fleet industry’s most comprehensive and integrated provider of financing and asset management solutions. Since 1965, Donlen has offered its clients highly personalized and responsive customer service, and their workplace excellence has been recognized as one of Crain’s Chicago Business “List of 20 Best Places to Work in Chicago” each year from 2009-2011, a Leader on “The Global Outsourcing 100®” list by the International Association of Outsourcing Professionals (IAOP) for six of the last seven years, and a National Association for Business Resources “101 Best and Brightest Places to Work For in Chicago” each year from 2007-2012. Donlen’s innovation has been awarded with the Computerworld “2012 Honors Laureate for Economic Opportunity,” named to “2012 InformationWeek 500” for innovative technology; the Stevie® “2012 Gold Award for Business Intelligence Solution,” the Silver Award for “2012 Front Line Customer Service Team of the Year,” and the “2011 Corporate Environmental Responsibility Program of the Year.”