Fuel card fraud: who pays the bill?

Fuel suppliers usually place the risk of fuel card fraud entirely with the fuel card holder, the transport company, in their general or delivery terms and conditions. Can the fuel supplier/oil company successfully rely on such a clause?

Case law on fuel card fraud

There is relatively little published case law on fraud with fuel cards. While many transport companies are affected by this every year, which manifests itself in various forms. Such as theft of fuel cards, skimming, and copying fuel cards.

In 2009, the Amsterdam Court of Appeal ruled that oil companies are obliged to take all reasonably possible technical measures to prevent fraud with the fuel cards issued.*

Fuel transactions with copies of fuel cards

In this case, it was established that fuel transactions had been carried out with copies of a fuel card. The defence of fuel supplier BP that the fuel fraud was the result of careless use of the fuel card and/or careless use of the PIN code by one of the employees of the transport company, did not hold up.

The Amsterdam Court of Appeal reasoned that the downside of the contractual exclusion of liability, whereby the risk of fraud is entirely borne by the transport company, is formed by the obligation of the fuel supplier to do everything that is reasonably possible to prevent, or at least limit, the damage resulting from the fraud, on the basis of reasonableness and fairness (Article 6:248 paragraph 1 of the Dutch Civil Code).

Blocking a fuel card

In that context, the Court of Appeal ordered an expert investigation, in which the question was asked, among other things, whether it was technically possible to block a fuel card, if it was established that there had been excessive consumption of fuel.

An expert report and a ruling on appeal did not come about, because the parties settled this matter by mutual agreement. In view of the considerations of the Court of Appeal and the tenor of the rhetorical questions for the expert report, I expect that the fuel supplier in question had to make considerable concessions.

Paying fuel costs

In 2007, the Arnhem District Court ruled that the operator of a number of petrol stations that had issued fuel cards with PIN codes to a transport company was entitled to pay the fuel costs, so that the transport company was liable for the damage.**

The facts of this case showed that the debit card and the fuel card had been used carelessly. During a break-in in the cabin, the fuel card with the associated PIN code had been taken. The transport company had initially concealed the fact that this break-in had taken place, and was given the cold shoulder. The transport company was liable for the costs.

Fuel card fraud – the practice

Recently, one of my clients, a medium-sized transport company, was confronted with fuel card fraud. Based on the times of the fraudulent fuel transactions and the data read from the track & trace system, it became clear that two fuel cards had been in circulation with the same fuel card numbers.

The fuel card issuer in question was a large oil company that was wise enough not to let it come to a procedure and was committed to continuing the relationship with the loyal customer. An amicable settlement that was convenient for the customer was the result.

By: Otto Lenselink

February 2019

* Amsterdam Court of Appeal d.d. 21 April 2009, ECLI:NL:GHAMS:2009:BJ6257

** Arnhem District Court d.d. 28 February 2007, ECLI:NL:RBARN:2007:BA1504

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