How to Avoid Falling Victim to Oil-Shorting Scams

Are you paying for more oil than you’re really getting? Unscrupulous oil companies can trick owners about the amount of fuel that’s delivered to a building. Recently, a joint report released by the New York City Department of Investigation and Business Integrity Commission revealed widespread heating oil fraud across New York City, 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 in the heating oil industry amounts to at least $18 million annually.

Among those charged are 29 truck drivers, fuel depot dispatchers, and company owners. The defendants are facing felony charges, including enterprise corruption and grand larceny. The companies that have been charged are F&S Distribution, Casanova Fuel Oil, and Express Petroleum of the Bronx; G&D Petroleum Transportation, G&D Heating Oil, 4th Avenue, All Boro-Transportation, and Enterprise Transportation of Brooklyn; and Century Star of Westchester County.

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

The oil meter. 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 are supposed to be sealed by the city’s Bureau of Weights and Measures, or by a city-approved oil meter repair contractor.

The delivery ticket. The delivery ticket (also known as a printer ticket) is a multi-part slip that looks like a credit card slip. 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

Unfortunately, the four oil delivery scams described below are common. All four violate Department of Consumer Affairs regulations called “Method of Sale of Fuel Oil” in the Rules of the City of New York, Title 6, Chapter 3, sections 3-91 through 3-102. Violations of these rules are punishable by that agency.

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.

City regulations make it illegal for a truck to arrive at your building with a ticket already in the meter. The driver must insert a fresh ticket when he arrives at your building and must 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 that were actually delivered. As a result, you’re paying for phantom oil.

City regulations make it illegal for drivers to have delivery tickets with 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 it passes through the meter [NYCRR 220.2(a)]. The vent lines from the air or vapor eliminator must be made of metal tubing or other rigid material.

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. City regulations require oil delivery trucks to be equipped with automatic air eliminators that stay on during the delivery process.

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. City regulations require that all fuels oils with a temperature greater than 60 degrees Fahrenheit must be sold or delivered on the basis of a temperature reading of 60 degrees Fahrenheit. A tolerance of 25 degrees Fahrenheit will be permitted for No. 4 and No. 6 oils. A tolerance of 10 degrees Fahrenheit is permitted for No. 2 oil [RCNY, Title 6, Ch. 3, Sec. 3-93].

Beat Scams by Monitoring Oil Deliveries

The best way to beat oil-shorting scams is to have your oil company make deliveries only when the super can closely monitor the process. You can have your super watch every phase of every oil delivery from start to finish. You can have him check the trucks, oil meters, the delivery tickets, and the receipts. Here are some monitoring steps you can utilize. We’ve also set up a Model Form: Use Oil Delivery Checklist to Minimize Risk of Oil-Shorting Scams covering these steps (see link below article). Give it to your super or other staff member 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 5 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 building superintendent 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. It 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 the 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. Check oil temperature on truck driver’s loading ticket. The driver is required to keep a loading ticket on hand, indicating the grade, quantity, and temperature of the oil that’s been loaded onto the truck.

7. 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.

8. 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 the city’s Department of Consumer Affairs (DCA). This agency is responsible for inspecting every fuel delivery truck once each year. It also does spot checks throughout the five boroughs—and should be able to arrange a spot check of your oil delivery service. You can reach the DCA at nyc.gov/consumers or by calling 311.