Pilot Flying J Issues Response to California Fraud Story

KNOXVILLE, Tenn. -- Pilot Flying J issued a response to a CSNews Online story appearing yesterday that stated the truck stop and travel center operator loses about $400,000 a month in California due to fraud.

The story, "Pilot Flying J Suffers $400K Monthly Fraud Loss in California," quoted Mitch Steenrod, Pilot Flying J's chief financial officer, who was interviewed by The Mountain Enterprise. In the interview, Steenrod said that the California legislature was to blame for massive fraud that has occurred at Pilot Flying J locations in the Golden State. He stated the reason for placing the blame on the legislature was that it does not allow outdoor pumps to require ZIP code verification when fueling up.

However, an assembly bill signed into law by California Gov. Jerry Brown in October 2011 changed that rule.

Pilot Flying J cleared up any confusion with its response. "In April 2011, due to the statutory requirements of the California Supreme Court ruling, Pilot Flying J removed the ZIP code verification requirement for credit card purchases at the fuel pump at its locations in California," the statement read, which was e-mailed to CSNews Online. "Then in October 2011, Assembly Bill 1219 created an exception that allows for the collection of ZIP code information when a person or entity accepting a credit card in a sales transaction at a retail motor fuel dispenser or retail motor fuel payment island automated cashier uses the ZIP code information solely for prevention of fraud, theft, or identity theft. Pilot Flying J recently re-instituted the ZIP code verification for all credit card purchases at its fuel pumps in California."

According to the statement, Pilot Flying J is also working closely with Visa and MasterCard to implement various policies and procedures to help protect against credit card fraud. "Such measures have included turning off the ability to fuel through Visa and MasterCard at the outside truck diesel pumps and requiring customers to enter the stores and have face-to-face interactions with our cashiers to help prevent credit card fraud. While Pilot Flying J views this procedure as an inconvenience to its customers, it has unfortunately become necessary in many high fraud areas, including some travel centers and travel plazas in California."

Pilot Flying J's statement did not address the accuracy of Steenrod's statement that the company was losing $400,000 per month in California due to fraud.