Fraud’s Impact on Customers

My family went on a trip to Florida vacation in June as a graduation present to my daughter.  Going from Texas we decided to fly and rent a car while we were there.  I have rented cars a number of times so when the rental car company started giving me the spiel about gas I quickly said no.  I was used to filling the car up before I returned it.  The person at the counter reminded me that I needed to fill up the car less then 10 miles before I returned it or there would be a charge.  Later in the week I noted that they also wanted you to show a copy of your gas receipt when the car was turned in.  I thought that was a bit untrusting, but if that was their policy so be it.  Upon returning the car I dutifully filled it up 1.9 miles from the airport and showed the receipt to the clerk when I turned in the car.  No extra charge, everything was perfect, or at least I thought it was.

A month later I get a letter from the rental car company saying they were billing me $38.16 because I did not fill up the car before I got to the airport and they had to put gas in it.  Of course, if I could fax or mail them a copy of my gas receipt they would be happy to reverse the charges.  My initial thought was what a scam.  Being a neurotic accountant I kept my receipts, but most people probably don’t keep receipts for a month after the charge was made so they would have no recourse.  And for $38 they probably would not spend a lot of time fighting an out of state charge.  As I set down to write my cover letter I was thinking of ways to accuse the company of fraud because I felt very strongly that they were doing this deliberately just to get a little extra money out of customers who probably can’t fight back.  I also thought that this will be the last time I ever use the rental car company in question.

But as I thought about the situation I began to wonder if it was the rental car company pulling a fraud on me or if it was someone pulling a fraud on the rental car company.  Maybe someone was siphoning gas out of the cars, or maybe an employee was reporting they were putting gas in rental cars while they were really putting the gas in their own car.  Maybe an employee was falsely reporting the charge so they would make a revenue target and get some kind of sales incentive bonus.  I, therefore, decided to scale back my letter and simply point out that a fraud was possibly being committed against one or both of us, but mostly I wanted my money back.

As CPAs, when thinking about fraud we often focus on the impact it might have on investors or the impact that a loss of cash or assets will have to the company, but we rarely think about the impact it might have on customers and that is a mistake.  Without customers, a company will not exist.  Fraud that impacts customers might be the most insidious and costly fraud of them all so we need to think beyond the financial reporting and beyond the security of assets and think about how even little frauds can cost the company long-term growth relationships with customers.  Only then will we be truly incorporating fraud into our mindset.

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