Unfortunately, there are unethical people in every industry, including the wholesale fuel supply business. Because of the actions of some, the wholesale fuel business has acquired a negative reputation of being a haven for fraud, price-gougers, and greedy people. Understanding wholesale fuel scams can help you see the signs of fraud and can help you know what to do to avoid wholesale fuel fraud.
Understanding wholesale fuel scams
In one recent nationwide scandal, sales representatives from a major fuel supplier sold truckers diesel contracts that were supposed to include monthly rebates. Instead, the fuel supplier got caught pocketing over $66 million of “rebates” that were never given to the trucking companies.
That particular scam lasted five years before being found by the FBI, and it revealed a couple of key points. First, buyers who didn’t track their purchases closely were the most susceptible. Second, the scammers felt justified in taking advantage of people who did not know any better.
The only good thing to come out of a scam like the example above is education about how wholesale fuel fraud works. Understanding the intricacies of these scams will help others avoid falling for fraud in the future.
Signs of wholesale fuel fraud
It is typical for a wholesale fuel order to cost as much as a new car, yet many purchases are handled via a quick phone call or text. With such large amounts of money transferring hands in such a routine manner, misunderstandings, mistakes, and fraud can happen. Be sure that you are handling your wholesale fuel orders in a secure setting to help avoid fraud.
The most common cause of fuel fraud is not knowing the various components and costs that make up the order price. The dishonest sales representatives in the scam above were instructed to prey on customers who didn’t realize they were being scammed. In this situation, there was no price transparency. Keeping track of your wholesale fuel orders and purchases can help you avoid fraud. You should also only pay a price that is based on a neutral, third-party standard.
It is important that you have a way to process transactions electronically. Unfortunately, too many out-dated ordering and tracking systems are still used in the wholesale fuel industry. Using updated transaction systems can help you avoid fraud when purchasing your fuel.
Understanding these signs of fraud can help you avoid common scams that can occur in the wholesale fuel industry. It is also important to know what you can do to help avoid fraud.
What you can do to avoid wholesale fuel fraud
A nod or a handshake might be the traditional way to close a sale with some companies. However, handling a wholesale fuel order is a serious process. Make sure that you have a way to electronically confirm your order before the transaction is completed. Some companies also have a pricing system in which you can receive their daily price with each part of the amount you will pay. This system can help you verify prices for fuel, freight, taxes, and other important prices.
Compare multiple daily prices from a variety of suppliers. You can also ask for a price based on a published, third-party industry standard, such as OPIS, which is an industry pricing benchmark.
Scammers have taken advantage of companies that have outdated technology. It is important that every piece of technology used in the wholesale fuel industry is current, because this enhances safety and efficiency.
At Kendrick Oil, we’re committed to providing the high-quality, honest customer service you should expect. If your business is in need of wholesale fuel or if you have any questions about any of our products and services, give us a call at (800) 299-3991. You can also Contact Us by email for more information. We have locations in Texas, New Mexico, Oklahoma, and Kansas.