How to Avoid Falling Victim to Oil-Shorting Scams

If your site utilizes heating oil as a fuel for furnaces or boilers at its buildings, you should take steps to ensure that you aren’t paying for more oil than is being delivered to your site. Unscrupulous oil companies can trick owners about the amount of fuel that’s delivered to a building. Recently, in New York City, a commission found widespread heating oil fraud, with nine companies and 44 individuals indicted on multiple felony counts. According to authorities, the defendants shorted oil deliveries for nine years but charged customers full price. They say in some cases they then sold the stolen oil at below-market costs. Based on interviews with employees of the indicted delivery companies, recorded conversations, and other intelligence gathered during the investigation, it is believed that the aggregate theft amounted to at least $18 million annually.

Here’s the low-down on four common oil delivery scams, and advice on how to stop paying for oil you don’t get.

The Delivery Process

To figure out how the oil-shorting scams work, you need to understand the basics of the oil delivery process.

The oil meter. Home heating oil is sold by volume. Your city or municipality should have a weights and measures agency that routinely inspects all oil meters for accuracy. Most oil delivery trucks are equipped with oil meters. Like a gasoline pump, an oil meter registers, in gallons, the amount of oil that passes from the truck into your building’s oil tank. The meters on these trucks should be sealed by your city’s Bureau of Weights and Measures, or by a city-approved oil meter repair contractor, to ensure that nobody has tampered with them.

The delivery ticket. Unless arrangements are made in writing and prior to the sale, when this product is delivered to your site, the seller should give you a “delivery ticket” at the time of delivery. Check the delivery ticket for the following information:

• Serial number.
• Date of delivery.
• Name and address of seller legibly recorded.
• Name of and address of buyer legibly recorded.
• The quantity of oil delivered mechanically printed on the ticket.
• A sales sequence number mechanically printed.
• The price per gallon.
• The identity of the person making the delivery (may be driver’s name, initials, or code number).

The delivery truck is supposed to insert the ticket into the oil meter before pumping oil into your tank. When the delivery is completed, the meter prints the amount of oil that was pumped from the truck into your tank. The driver is supposed to remove the ticket from the meter, and give one copy to you.

Watch Out for Four Oil-Shorting Rip-Offs

The four oil delivery scams described below are the most common.

Scam #1: Add-on sales. After delivering 500 gallons of oil to someone else, the delivery truck arrives at your building with a ticket already in the meter. The driver starts your delivery on the same ticket at 501 gallons instead of zero. And the result is that you pay for 500 gallons of oil that were delivered to someone else.

A driver should insert a fresh ticket when he arrives at your building and should remove the ticket from the printer at the end of the delivery.

Scam #2: Switching tickets. After completing your oil delivery, the driver makes some excuse to take your delivery ticket in the truck’s cab, where he switches it for another ticket that’s been preprinted with more gallons than were actually delivered. As a result, you’re paying for phantom oil.

Delivery drivers should not have preprinted amounts for undelivered oil or delivery tickets that show different quantities of oil for the same delivery.

Scam #3: Air in the oil. Every fuel truck is supposed to have an air eliminator—a device that removes air bubbles from the oil before they pass through the meter. If the air eliminator is broken or shut off, air bubbles in the oil will pass through the meter and get registered as delivered oil. As a result, you pay for air.

Scam #4: Heated oil. The oil company delivers oil that’s too hot, but doesn’t adjust the bill to account for the temperature. As a result, you end up paying for more oil than you actually got. To make the oil flow faster, fuel companies heat the oil before loading it onto delivery trucks. Since oil expands when it’s heated, the oil company is supposed to record the temperature of delivered oil on a loading ticket—and reduce your oil bill to adjust for the expansion factor when the oil is above a certain temperature.

Beat Scams by Monitoring Oil Deliveries

The best way to beat oil-shorting scams is to have your oil company make deliveries only when someone from your maintenance staff can closely monitor the process. You can have your staff watch every phase of every oil delivery from start to finish. You can have them check the trucks, oil meters, delivery tickets, and receipts. Here are some monitoring steps you can utilize. We’ve also provided a Model Form: Use Oil Delivery Checklist to Minimize Risk of Oil-Shorting Scams covering these steps. Give it to your staff to use for each delivery.

1. Check oil level before delivery begins. Use one of three commonly used devices to check how much oil is in your tank before an oil delivery. And record the amount. Here are the three devices:

> Dipsticks. Dipsticks are inexpensive and highly accurate (often within five to 10 gallons). The dipstick works in your building’s tank like a smaller version works in the oil tank in your car. To use the stick, get to the opening on top of the tank and sink the stick in until it touches the bottom. (Be prepared to get dirty, and make sure you have enough headroom to lower the stick—dipsticks are often 12 feet long). When you withdraw the stick, read the level reached by the oil. To get an accurate reading, you must buy a dipstick that’s specially designed for your tank’s size and shape. Your tank manufacturer can supply you with the tank’s dimensions, and suggest the correct dipstick.

> Petrometers. A petrometer is a pressurized gauge with a wire going into the tank. When the petrometer is pumped up, a colored liquid inside a glass tube rises to tell you the level of oil in your tank, usually in increments of 50 gallons. Although many owners use them, the less expensive hand-pumped petrometers are accurate only within 50 to 75 gallons. Also, the pressure created by the hand pump doesn’t hold the liquid at the reading level for very long, so you have to work fast to take the reading before the liquid in the gauge goes down.

If you own a large building, you might want to buy a petrometer with a built-in air compressor that keeps the liquid at the right level. This type of petrometer is generally accurate, but is more expensive.

> Fuel gauge. If your site staff can’t reliably monitor oil deliveries with a dipstick or petrometer, there are fuel gauges that use sonar to keep track of the amount of oil in your tank. A fuel gauge also records the date, time, quantity, and temperature of any oil that’s delivered to the building. And the data from the gauge can be delivered remotely.

2. Check delivery truck’s oil meter seal. Make sure the meter’s seal and the wire it’s attached to are intact. This assures you that the meter is measuring oil properly. If the wire and seal are broken, don’t accept a delivery unless it’s an emergency.

3. Make sure truck’s oil meter reads “0” when driver inserts ticket into meter. If the meter isn’t at “0,” make sure the driver turns it back to “0” before he puts the ticket into the meter. This stymies the “add-on sales” scam.

4. Inspect delivery ticket before and after it goes into meter. Make sure the meter contains a clean, unused ticket. This prevents a driver from falsely inflating the amount of oil actually delivered by using a meter ticket from a prior, larger delivery. The driver must start out with a fresh delivery ticket that’s not preprinted with a fuel quantity before he puts it into the oil meter. When the delivery is finished, make sure the reading on the delivery ticket matches the reading on the meter. Get the ticket as soon as the driver takes it out of the meter. Don’t let the driver take the ticket into his truck cab where he could switch it for another. This will thwart the “switching tickets scam.”

5. Look for red flags during delivery. During the delivery, have a staff member position himself at the back of the truck and continuously observe the delivery and the appearance of any “red flags.” The main observations to make are: (1) whether the flow of the oil, as indicated by the speed with which the truck meter reading increases, seems to be steady; and (2) whether the truck hose through which the oil is being pumped “jumps” at all during the delivery, which is an indication that air rather than oil is passing through. If the oil flow is erratic or the hose jumps, the building representative should question the driver.

6. Recheck your oil level twice. Immediately after an oil delivery, take a follow-up reading of your tank. Subtract the pre-delivery reading from the post-delivery reading. This number should roughly match the number of gallons on your delivery ticket. (Keep in mind that some hand-pumped petrometers can be off by 50 to 75 gallons.) However, if air was mixed in with the fuel and permitted to flow into the tank, the bubbles could cause a false reading, making it appear that more fuel was delivered than in actuality. Also, the fuel delivery vendor could have heated the fuel so that the quantity expands prior to pumping, thereby causing the quantity delivered to appear inflated. To combat both of these schemes, take a measurement directly after the delivery as well as 30 minutes later to allow time for the air to settle and the fuel to contract.

7. Compare bill to delivery tickets. Keep copies of your readings and tickets. Compare your calculation with the bill you get in the mail. Check to see that you’re not being charged for more oil than was delivered, and that any necessary temperature adjustments were made for heated oil.

If you suspect that you’re being shorted on oil deliveries or have any questions, reach out to your city’s agency responsible for inspecting fuel delivery trucks.