Shell Tackles Gasoline Pump Fraud

Sees a "significant reduction" in skimming from security initiative

Published in CSP Daily News

By
Carole Donoghue, Petroleum Editor

HOUSTON -- A Counterfeit Skimming Initiative has produced a "significant reduction" in gasoline pump skimmers being placed on equipment at Shell-branded gas stations.

Acknowledging that pump fraud has become a constant battle ground as gasoline prices hit new peaks each year, Shell Oil has been proactive in tackling the issue at the pump through new programs, proprietary anti-fraud tools and closer collaboration with card issuers and law enforcement.

"Organized crime is well financed and highly mobile, so they can move easily between cities when they start feeling the heat in one," Mike Swillo, U.S. credit-card operations manager for Houston-based Shell, told CSP Daily News in an exclusive interview. "It's like having 10 fingers and 15 pegs: You hit it on the head here and it pops up over there."

And so, Shell is using its own test lab to replicate fraud and try out new deterrents.

"Criminals take the path of least resistance, and our goal is to protect the customer, site operator and the brand," Swillo said. "As Shell stations become harder to attack, the crooks will move on to an easier target."

Shell has introduced initiatives that have reduced fraud, prompting customers to enter their ZIP codes, which Swillo said is still "the best line of defense against fraud at the pump."

In 2011, the company offered jobbers a special allowance--initially $250 per site, later raised to $400--to install new locks on their dispensers. "The number of sites where skimmers were found at Shell fell in 2011 after we implemented the Counterfeit Skimming Initiative," he said.

Shell is reserved when asked how many of its stations are hit by fraud annually, but the company says it has seen a "significant reduction" in the past three years. Fraud levels in 2011 remained the same as 2010--a significant achievement considering prices have risen and majors have had to raise pump limits as a result, Swillo said.

But he acknowledges that Shell can never be complacent about fraud: "When you build a better mousetrap, you eventually get smarter mice. … As tactics change, the industry must adapt and be proactive."

Shell has just started a market test of a pump device that sounds a 105-decibel alarm when the dispenser door is opened, and it automatically kills the power to the pump. "If there's no power, there's no loss, because you can't steal something from a pump that has no power," said Dave Jacobs, vice president of Flint Loc LLC, the Philo, Ohio-based firm that produces the system.

The device displays a message on in-store POS if the pump has been opened, and it also will send alerts to corporate headquarters or a smartphone.

The equipment, which also can include a remote monitoring system, will cost marketers $300 to $800 per dispenser, depending on the version purchased, Jacobs said. So far, the company has installed about 7,000 of the devices across the United States, especially in fraud hot-spot states such as California, Texas and Florida. Companies using it include Susser Oil, Circle K, RaceTrac and TravelCenters of America.

To learn more about how hackers are targeting fuel islands, see "Are Your Pumps Fraud Centers?" in the May issue of CSP magazine.