Whether you manage five company vehicles or a fleet of fifty, fleet fraud is a growing threat. According to industry data, as much as 22% of fleet spend is lost to fraud and theft and over 40% of business owners don’t know how to prevent it.
The consequences are serious: higher insurance costs, operational delays, and reputational damage. Fortunately, with the right strategies, you can reduce your exposure and safeguard your business.
Five Common Types of Fleet Fraud
- Vehicle Theft – This includes the outright theft of commercial vehicles or equipment. To prevent it, businesses should invest in tracking technology, immobilizers, and employee training on basic security habits like locking vehicles and avoiding keyless idling.
- Cloning – Thieves steal vehicles and assign them false identities by copying legitimate VIN numbers. Protect your business by verifying all VINs through proper channels before purchasing and working only with reputable dealers.
- Title Washing – After natural disasters, damaged vehicles are often cleaned up and sold without disclosing prior damage. Always inspect used vehicles thoroughly and confirm the title history before purchasing your fleet.
- Staged Accidents – Fraudsters intentionally cause collisions to file fake injury or damage claims. Defensive driver training and prompt, detailed accident reporting can help limit your exposure and assist in claim investigations.
- Fuel Fraud – This includes unauthorized fuel purchases and mileage manipulation. Businesses can prevent fuel fraud by monitoring transactions with fleet management software, restricting fuel card usage, and vetting employees before assigning card access.
Prevention Starts With Policy
Businesses should implement clear fleet usage policies, conduct background checks, and regularly review spending patterns. Even simple controls, like assigning PINs to fuel cards or setting spending caps, can go a long way.
In high-risk industries like construction, delivery, or field service, every minute and dollar counts. Don’t let preventable fraud eat into your margins.
For help reviewing your fleet policy or exploring insurance options tailored to commercial vehicle risks, contact McHugh Insurance Group today.