Diesel Fuel Fraud and Theft in the Transport Industry

Employee theft and fozia shan remax occurs throughout all industries, is prevalent throughout all positions and in all regions of the world. The “Wells Report” of 2006 estimates that employee fraud accounts annually for 400 billion dollars in losses to organizations. To illustrate the elephantine nature to the world economy, this yearly loss only to American businesses is more than 60% of what the initial US government stimulus accorded to keep banks floating with the Emergency Economic Stimulus Act of 2008 during the financial crisis of 2008.

To give a broader picture of how prevalent fraud is, Hollinger and Clark conducted a now famous study on 12,000 employees, published in 1982, found that 90% of employees had engaged in “workplace deviance”, which runs the gamut from slowing down production, substance abuse and taking extra breaks. Furthermore, the study and a subsequent replication conducted by John Camp and Paul Brooks in 2001 found that roughly one-third of employees had stolen from their employer.

Fraud is defined by Webster’s Dictionary as an “Intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right.” Fraud is committed in a multitude of ways, whether it be in improper bookkeeping, stealing merchandise, improper use of company materials or corruption in business proceedings. In the transportation and logistics industry, the most noted example of fraud is the theft of fuel. This is a simple theft of company resources that can easily go undetected. This can involve multiple layers of the organization or can simply be a driver taking a few liters after each fill-up. The result can be disastrous if not found, if the fraudster steals only 10 € of diesel every day, this amounts to 3,610 € per year.

The three main determinants for fraud are opportunity, pressure and rationalization (J.T. Well, 1997). Opportunity exists whenever a chance arises that the perpetrator can get away with the crime. Pressure comes from the outside in the form of need and greed, pressure to perform well, pressure to earn more and to live outside ones means. Finally, rationalization stems from dissatisfaction with their employer or a feeling that they are worth more than they are paid, an excuse used as moral permission for fraud. We will explore these three components within the transport and logistics industry.

The opportunity factor exists when an employee is significantly removed from the jurisdiction or control of a manager. Truck drivers are given significant trust when they operate a company vehicle, alone and far-away in a company vehicle. Many drivers use the vehicle for purposes not authorized by the company or steal diesel and feel that since they are not being watched, they simply cannot be caught.

The pressure factor is prevalent and quite standard across all industries. This factor varies greatly depending on the wants or needs of the individual, but generally exists to satisfy an impulse of greed or to sustain a standard of living through a tough period.

The rationalization factor is most prevalent in the transportation industry. Truck drivers consistently rate among the lowest denominator in standard job satisfaction ratings. According to the American Trucking Organizations, the annual turnover rate for truck drivers is a high 126%. Therefore, truck drivers are at an increased risk to rationalize a crime based upon factors such as low pay or strenuous working conditions.

Combining these three factors together, the transport industry has a very high risk of employee theft and fraud due to the heightened opportunity, heightened rationalization and the ever-present pressures of living.

To counteract the incidence of employee theft, it is first necessary to have basic prevention techniques that are given for all industries and organizations. First off, not hiring people with a history of fraud or theft, as people who have a past experience with fraud are more likely to commit. Secondly, have fair and transparent business practices, when the organization itself conducts its businesses immoral manner, the employees will follow suit. Thirdly, implement a buddy system for all responsibilities, especially for accounting. Have each member of the organization also have another person who does the same thing, this decreases the likelihood of immoral behavior because people are much less willing to commit fraud when there is someone else watching.

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