Bullet-Proof Strategies for Fleet Fraud Prevention

Six strategies for building a trucking fleet that is resilient to fraud.

Bullet-Proof Strategies for Fleet Fraud Prevention

By Neil Pope, for The Inside Lane

In the fleet industry, fraud is not just a minor inconvenience but a pervasive issue with substantial financial consequences that can fundamentally undermine the operations of businesses.

Yukon Palmer, president of Fieldlogix, brings over 20 years of risk management expertise and highlights the extent and severity of the challenge.

"A majority of fleets experience some form of fraud," Palmer explained in an interview with The Inside Lane, adding, “usually when fraud is finally brought to light, we often see the cost is often far greater than anticipated because oftentimes it was ongoing on for months if not years.”

It’s a startling truth, supported by hard statistics.

In a 2024 Motive survey of 1,000 executives spanning the trucking, logistics, and related sectors, participants estimated that up to 22 percent of their fleet budget is vanishing due to fraud.

More concerning is that nearly half of these leaders recognize the impact of fraud on their operations but lack a proactive strategy to mitigate these risks.

And they expect the problem to continue.

Strategies for identifying and preventing fraud

Fraud can happen in many ways, making it hard to track and prevent. The first step in tackling this issue is to recognize the signs of fraudulent activity.

Fraudulent activity tends to spike anytime there are economic challenges such as significantly high inflation, and Palmer says there are some clear indicators to watch for.

“A common sign of fraud is significantly increasing costs without a corresponding rise in workload. Whether within a group or with an individual driver, unexplained spikes should serve as a big red flag that something that needs to be investigated to uncover the root cause”.

Once a potential fraud condition has been identified, fleets will mitigate fraud risks through internal controls which may involve modifying current processes or leveraging technology for support.

The urgency to develop robust fraud prevention strategies has never been greater for the trucking industry and related sectors. By understanding the signs of fraud and implementing effective controls, fleets can ensure the sustainability of their operations.

Six ways to fight against fraud

Educate team members to recognize fraud – Employees serve as a frontline defense against fraud and should be equipped with the training and resources to detect fraudulent activities. Palmer says that “employees need to be aware that there is some level of accountability so that they're less likely to commit fraud because they know their coworkers have a means of discovering it.”

Challenge your assumptions – While fraud can occur at any organizational level, it is more common, and dangerous, amongst senior staff,

Senior employees often have the know-how and ability to conceal irregularities and are generally more trusted than their junior counterparts.

Palmer agrees.

"It's generally the more senior members who are more likely to engage in fraudulent activities," he said. "Their experience allows them to exploit vulnerabilities and unfortunately, can set a bad example for junior employees, leading to a culture of fraud taking root within the fleet."

Implement real-time alerts within your telematics system – Real-time fraud prevention is a modern and proactive approach to stopping fraudulent activities as they happen and before damage occurs. As soon as a vehicle deviates outside of work hours or a geofenced location, an alert is immediately issued allowing for immediate intervention.

Utilize AI-powered telematics – AI-driven telematics can rapidly analyze large volumes of data quickly and identify unusual activity. Palmer explains the benefits, noting “Managers may need to spend hours reviewing reports and this is especially time intensive with larger fleets, often requiring dedicated personnel for effective oversight."

Addressing fuel card fraud – A survey conducted by Shell revealed that 57% of US fleet managers view fuel card fraud as a significant concern with 2 in 5 drivers having witnessed fraudulent activities. To mitigate this risk, implementing a daily spend limit and restricting the types of fuel that can be purchased with the card are straightforward yet effective measures.

Join a trade association – Palmer suggests that joining a trade organization can be beneficial as they offer resources such as educational materials and specialized training programs on the latest fraud trends and prevention techniques.

Is your trucking business prepared to combat fraud? Which of these tips can you implement today? Send an email to the editor at editor@theinsidelane.co

Have a question or comment about this article? Email Bianca Prieto at editor@theinsidelane.co

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