Fraud at the Gas Pump a Growing Concern

Sun Journal (Lewiston, ME)

October 7, 2011

New questions have surfaced over the state of Maine?s ability to effectively regulate gas stations that may be short-changing customers at the pump.

Inspectors in the Maine Department of Agriculture reported last month that one large gas station in southern Maine had six pumps that were improperly calibrated. While state officials say two of the pumps were undercharging customers, the other four were significantly overcharging customers to the tune of about $2,300 for every 1,000 gallons delivered. Inspectors said one pump could have overcharged a single customer about $12.20 on a 20-gallon fill-up.

State officials have declined to name the station because they say they don?t believe the station tampered with the pumps or that its owners willfully defrauded customers. That gas station and at least one other have revealed several problems, including infrequent inspections and limitations with the computer database the state Department of Agriculture?s Weights & Measures unit uses to record inspections.

The problems came to light Monday following a story by the Capitol News Service, which obtained several inter-department memos state officials say were designed to promote the need for a strong inspection system, yet revealed current deficiencies.

The problems at the southern Maine gas station were detailed in a Sept. 9 memo. It estimated that one station may have cost customers about $316,637 in overcharges in one year. The memo also noted that other states were reporting that similar irregularities were ?routinely found? in neighboring states and that ?several well-known retailers are knowingly overcharging the public and assuming that any fines that they pay are more than offset by the increased profit.?

Data trouble

State officials have since attempted to downplay the one inspection, saying they believe most stations are accurately charging customers and that potentially nefarious overcharging was discouraged by the state?s unannounced inspections.

But state officials also acknowledge they don?t have the evidence to prove the southern Maine station is an outlier. ?I understand that this is an issue of public confidence,? said Walter Whitcomb, commissioner of the Maine Department of Agriculture. ?I wish we had better data to convince the public it?s not a widespread problem, but I can?t show you that data.?

That, say several lawmakers and state officials, is a big problem. Democrats and Republicans on the Legislature?s Agriculture Committee said the situation calls for public hearings and possible legislative action.

The state?s database accurately records the inspections, said Hal Prince, director of the Weights and Measures Unit. But the system only allows officials to search records by station, he added. It can?t, for example, search for parent companies or run queries for cumulative violations.

Prince said that kind of functionality would help his department effectively divert inspectors to regions or stations that have a history of improperly calibrated pumps. His department has seven inspectors who cover the state and handle enforcement issues. In addition, the state trains about 20 inspectors hired in 116 municipalities.

The local inspectors also use the state database that was implemented in 2003. Prince said the old database, which used a paper filing system, was limited.

The state inspectors in Weights and Measures have other duties besides inspecting gas pumps. The unit inspects scales at grocery stores and fuel trucks that deliver oil or propane. Those inspections use the same state database.

Prince said that ideally, gas stations would get inspected once a year. But he acknowledged that?s not the case due to the unit?s limited resources. Prince said he wasn?t sure when the southern Maine gas station was last inspected but that he had ?a hunch it probably hasn?t been for a while.?

Public outcry

The initial report has drawn a strong response from residents, Prince said, adding that his department had received many phone calls from people demanding to know the name of the gas station highlighted in the Sept. 9 memo.

The information is subject to Maine?s Freedom of Access Act. Prince said his office would abide by a FOAA request, but it did not want to willingly publicize the station?s name. ?My guess is that once it?s publicized, the station will have a tough time surviving,? he said. ?We did not want to participate in shutting down a business. We don?t believe this was willful or malicious. The anti-tampering wires were in place. This was just a snapshot in time.?

Gov. Paul LePage?s administration said it?s taking steps to address the problem, including potentially replacing or overhauling the current inspection database. It?s not yet clear how much such action would cost. The Agriculture Department also has reassigned three inspectors who had been allocated to other duties.

Whitcomb said the southern Maine inspection and the subsequent memo to the governor was designed to highlight the benefits of an effective inspection system. He said the incident does not indicate widespread fraud. ?I don?t think we need to run away from this, and I don?t think we have.?

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