Best practices to combat fuel fraud in commercial fleets
April 17, 2025
Fuel fraud is becoming a concern for fleet managers and business owners, especially with the current economic uncertainties potentially leading to fuel pricing volatility. As fuel costs account for around 30% of a fleet’s total budget, any misuse—whether intentional or accidental—can end up costing a lot.
So, how do you address this issue? The key is understanding how fuel fraud commonly happens and adopting best practices to detect and prevent it.
In this post, we explore common fuel fraud practices and effective strategies to combat them.
How does fuel fraud commonly occur?
Identifying fuel fraud starts with recognizing the most common methods used to manipulate fleet fuel expenses. Here are a few red flags you should watch for in daily operations:
Personal fueling (fueling non-company vehicles)
A driver might use a company-issued fuel card or reimbursement program to fuel their personal vehicle, recreational equipment (like boats or motorcycles), or even the vehicles of friends and family.
Fuel purchases that don't align with the expected consumption based on the vehicle’s mileage or efficiency should raise suspicion.
Split transactions (fueling the same vehicle multiple times)
Drivers sometimes swipe a fuel card multiple times during one stop to bypass transaction limits. They may make consecutive transactions to buy more fuel than necessary.
Multiple transactions for the same vehicle within a short span of time, such as 5–10 minutes, suggest fraudulent behavior.
Overfilling or excess purchases
Another common fraudulent approach is purchasing more fuel than a tank can physically hold. Some employees may fill portable containers for personal use or resell extra fuel.
Watch for transactions showing quantities exceeding a vehicle's tank capacity.
Ghost transactions (no fuel dispensed)
Ghost transactions involve employees colluding with fuel station attendants to log phony purchases. The “fuel” expense is then converted to cash or split between the two parties.
These transactions often lack a corresponding odometer reading and show inconsistent vehicle usage data, creating obvious gaps in your records.
Best practices to detect fuel fraud and cut costs
Fleet fuel fraud doesn’t have to be a problem, but it does require proactive management. These best practices can help guard your operations against fuel misuse while optimizing costs.
- Establish clear policies on company fuel cards
Create a detailed fuel policy that informs drivers about expectations, restrictions, and accountability for fuel purchases. Key elements of your policy might include:- Permitted vehicle fuel types (encourage cost-saving regular over premium fuel, unless necessary).
- Restrictions for additional purchases, such as limiting car washes to two per month or banning non-fuel transactions.
- Mandatory reporting for lost or stolen fuel cards.
- Consequences for using company resources for non-business purposes.
- Monitor exception reports and dashboards Fleet management tools that capture and report data analytics can bring irregularities to light before they spiral into expensive losses. Exception reports specifically highlight transactions operating outside normal fleet parameters, including:
- Purchases exceeding tank capacity.
- High rates of premium fuel filling. (For instance, only 5% of premium fueling might be considered acceptable across your fleet. Any rates higher than this should be monitored and addressed promptly.)
- Non-fuel purchases like snacks or car washes can be okay but if they exceed a preset limit, they need to be looked into.
- Implement fleet fuel card controls Fuel cards are essential yet often misused in fleet operations. Luckily, you can reduce risk with these controls:
- Limit card access: Immediately terminate fleet fuel cards when employees leave your organization.
- Set transaction parameters: Place limits on per-transaction fuel amounts and restrict purchases to fuel expenses only.
- Monitor location data: Ensure purchases align with the vehicle's last known location using tools like telematics.
- Take advantage of actionable insights from telematics Telematics goes beyond tracking routes and preventing unauthorized use of fleet vehicles. Pairing connected vehicle data with fuel transactions is a significant trend in combating fraud.
Reporting from telematics systems can:- Detect idling patterns contributing to fuel waste.
- Identify location mismatches for fuel purchases (e.g., the driver wasn’t near the transaction site).
- Provide additional data points, such as expected mileage-based fuel use, to cross-check against fuel card reports.
How Element helps combat fuel fraud
Partnering with Element means gaining access to cutting-edge technology and resources tailored to your fleet's needs. For example, Element’s Fuel EKG™ harnesses artificial intelligence to deliver advanced insights and visual storytelling. This allows fleet managers to proactively hold drivers accountable for irregular activity.
Our advanced platforms combine transactional data with telematics insights to flag misuse in 3–5% of fuel transactions, far exceeding traditional monitoring capabilities.
In 2024, Element’s fuel team recovered more than $200,000 in fraudulent charges across fleets, saving clients an average of $876 per incident.
If you're ready to explore the efficiency, cost savings, and fraud prevention our services provide, don’t hesitate to contact Element’s team of trusted advisors today.
Never miss an update
Subscribe for more news and thought leadership from Element.