LONG BEACH, California—Fuel card fraud has become a critical concern for businesses across the U.S., with as much as 1 gallon of fuel in 5 being pilfered, often to be resold at big discounts from makeshift tankers that could be as simple as a waterbed bladder in the back of a pickup.
So what better venue to update and educate those fleet managers who rely on fuel cards than a session at NAFA I&E 2025.
A panel of experts from law enforcement, fuel distribution, and fraud prevention outlined the complex landscape of fuel theft and the strategies companies can employ to protect themselves from the intricate methods fraudsters use to compromise fuel cards.
See also: The Fleet Card Advantage: Cutting Costs, Gaining Control
At the heart of the problem are skimmers—devices designed to steal magnetic stripe data from card readers at fuel pumps, allowing criminals to create duplicate cards and make unauthorized purchases.
Explaining the evolution of skimming technology, Erik La Com, a special agent with the U.S. Secret Service, said modern skimmers can be nearly undetectable, with some devices using Bluetooth technology to transmit stolen card information.
Non-EMV compliant pumps are particularly vulnerable, offering fraudsters ample space to install sophisticated skimming devices.
One of the most alarming trends is the use of "bladder trucks"— retrofitted vehicles equipped with hidden tanks and sophisticated pumping systems that allow criminals to steal fuel in large quantities. These trucks typically target diesel fuel, noted Jeri Crespi, director of operations for SC Fuels. The trucks can look like ordinary work vehicles, making detection challenging.
The financial impact is significant, with up to 22% of fuel spend can be lost to fraud, with some industries like construction experiencing even higher rates, reported Maddie McKinley, fleet card manager with Pinnacle Petroleum.
The most problematic states for fuel fraud are California, Texas, and Florida.
Fraud prevention checklist
Preventing fuel fraud requires a multi-layered approach. The experts recommended several key strategies:
Implement robust card controls
- Set specific authorization parameters
- Use real-time alerts
- Limit transactions by location, fuel type, and volume
- Block unauthorized states or zip codes
Driver education and training
- Secure fuel cards and never leave them unattended
- Never attach PINs to cards
- Cover PIN pads when entering codes
- Report suspicious activities immediately
- Conduct regular fraud awareness training
Technology and monitoring
- Utilize advanced fraud detection technologies
- Implement AI-powered transaction monitoring
- Conduct daily pump inspections
- Work closely with card issuers and law enforcement
The panel emphasized that while complete prevention is impossible, making fraud difficult is the primary goal.
Dennis Schiltz, fleet operations manager with US Bank, stressed the importance of creating multiple barriers that discourage potential criminals.
“The whole point of this discussion is how to make [the fraudsters] lives harder,” Schiltz said. “They’re not going to stop, but you can make it harder. As long as you have your controls on lockdown, that's obviously the most important thing.”
If it doesn't look right...
Law enforcement plays a crucial role in combating fuel fraud. La Com highlighted the challenges of prosecution, noting that sentencing can range from two to ten years depending on the scale of theft. Federal charges often include wire fraud, access device fraud, and aggravated identity theft.
Small businesses face unique challenges in fraud prevention. The transition to EMV-compliant pumps has been costly, with many smaller operators struggling to upgrade their equipment. However, the experts unanimously agreed that daily inspections and vigilance are more important than expensive technology.
Special Agent La Com suggested that a “delta analysis,” or keeping an eye out for something that seems out of place or different, is a simple and effective method.
“I love to go which pump is different: If I think there's something here, what's different about that? And that's how you're going to end up finding the skimmer,” La Com said. “The same thing's true with these bladder trucks. So how many people fill up their van from inside the double doors on the side of the vehicle?
“There's tons of regulations around moving fuel, and these people have none of those concerns.”
Collaboration emerged as a key theme. Successful fraud prevention requires partnerships between fuel distributors, card issuers, law enforcement, and customers. Regular communication, shared intelligence, and quick reporting of suspicious activities can significantly reduce fraud risks.
The panel offered a sobering reminder that fraudsters are constantly evolving their tactics. What works today may not be effective tomorrow. Continuous education, technological adaptation, and a proactive approach are essential.
For businesses in the fuel industry, the message is clear: fuel card fraud is a serious threat that requires ongoing attention and investment. By implementing comprehensive prevention strategies, maintaining open communication with partners, and staying informed about emerging trends, companies can significantly mitigate their risk.
