The next big scam: oil truck drivers shorting pump meters

Not too long ago we learned that VW had been putting “special” software in many of their vehicles which was designed to turn off a bunch of features in the engine when the car’s onboard computer sensed that it was hooked up to an emissions testing machine, defeating the purpose of the test entirely. At the time I wondered how many other companies might be finding ways to short sheet the system and make money off the rigging of seemingly routine measurement systems. After all, if there is money to be made by quietly circumventing some pedestrian set of analytics which nobody pays much attention to, there will always be someone out there willing to sacrifice their integrity in the name of pocketing some additional cash. We may have opened up a whole new can of worms on this score, and another scam has now been uncovered in New York, this one involving the meters used to measure deliveries of fuel and heating oil from commercial trucks. (Yahoo News)

Dozens of New York City-area energy industry executives and truck drivers were arrested Tuesday as part of a law enforcement probe into a suspected scam on customers.

DNAinfo reports the bust includes over 40 “owners, executives and truck drivers from some of the city’s largest fuel oil companies” who police accuse of rigging oil trucks to shortchange customers on heating oil. The alleged scammers, who DNAinfo reported include eight owners of fuel companies and three transportation depots, are accused of scamming developers and city agencies, including police and fire departments and those serving “the homeless and city schoolchildren.”

Prosecutors said the trucks were equipped with “diverter valves” that gave fake readouts of how much oil each customer was being delivered, DNAinfo reported. They also allegedly used other tricks to fool measuring devices designed to prevent fraud.

The phrase “diverter valves” already sounds suspiciously reminiscent of the Volkswagon scam, doesn’t it? Basically they had installed a pumping loop which would register the total amount of fuel going through the pump and then diverting some small amount of it back into the truck rather than into the customer’s tank. If it’s small enough and disguised fairly well, who’s really going to be paying close enough attention to notice? For that matter, how many customers actually know how a tanker truck’s pumps actually work and what they’re supposed to look like? This case seems to have hit commercial customers primarily, but if you live in a rural area and have heating oil or other fuels delivered by truck, you may want to be on the lookout for this yourself.

With that in mind, this is a pretty obvious scam to attempt, at least in hindsight. It’s as old as the classic “thumb on the scale” at the butcher shop, allowing the vendor to charge for more product than they are actually delivering. But now that we’ve had multiple instances of this cropping up, how many other places might we find it? The first one that jumps to mind for me is also in the fuel business… gas stations. It’s rare day when anyone can actually run their car’s tank entirely empty before filling it up. There’s always something left in the tank, so you don’t know exactly how much fuel you would need to top it off again. Did you really pump 8.2 gallons of gas into your tank or was it really 8.05 gallons but the pump charged you for 8.2? That sounds like peanuts on your bottom line, but that’s the whole point of a scam like this. You probably wouldn’t notice if your bill at the gas station was $24.70 instead f $24.58, and you’d be unlikely to drive back and complain over twelve cents even if you did notice it later. But for the gas station that fills up 300,000 tanks per year, that twelve cents per car adds up pretty fast.

Are they doing it already? In light of these recent stories and a moment’s reflection on human nature, I’d frankly be shocked if there wasn’t anyone already doing it. And it wouldn’t require an Einstein level braniac to figure out the technology to make it work, either. Where else might these sorts of rigged games be found? You really don’t need to look further than any product which is sold by volume rather than by individual units. Olive oil, sugar, coal, rock salt, bulk livestock feed… you name it. And it’s doubtful that we have the law enforcement resources to go around checking everyone all of a sudden. Why wouldn’t people be trying it if they could make a significant chunk of change by rigging some computers, pumps or other measuring devices?

Food for thought, not that we can probably do a lot about it. But it would be one heck of a project for a private citizen to figure out how to test their deliveries and purchases to unmask someone doing it.