Perth startup ScanCam uses licence plate recognition to reduce fuel theft

- May 24, 2016 6 MIN READ

Australia has quite a large problem with fuel theft, with almost $60 million lost each year due to people filling up their cars and driving off without paying. Of course, there are many instances when people simply forget to pay or leave their wallet at home, but returning to the petrol station is embarrassing and the process of trying to catch recurring offenders can be lengthy and expensive.

In many cases the process of recording and managing fuel theft is outdated and lacks the use of sophisticated smart tech solutions. Previously petrol station operators were expected to hand write the licence plate numbers of motorists who they deemed suspicious, while pictures of known offenders hung on the walls behind the register as a method of quick identification.

Many operators are still using pen and paper to fill out forms and record dates and times of incidents. When a fuel theft incident occurs, operators have been required to sift through hours of CCTV footage and then record and burn that footage to a disk to be sent into the police station for analysis. In this day and age, this approach seems much like some strange process out of the 1990s.

Of course, the age old use of pen and paper make it hard to reduce and manage fuel theft, which is why this issue in Australia continues to climb – from 2013 to 2014 statistics released by the Queensland Police Service revealed petrol drive-offs in the state had tripled in the last five years, with 14,620 reported instances in one year alone.

To curb this issue fuel retailers must look towards technology solutions and find ways to provide better visual deterrents so customers know there are consequences for any large or small fuel theft incident. However today visual deterrents don’t have the same impact as they did years ago. With CCTV cameras being used in every store and on many street corners, retailers discredit them as a successful crime deterrent.

Another big problem with reducing fuel theft, apart from the obvious misuse of 21st century technology, was that once the police had the information of an incident, they weren’t keen to pursue the case. In order for an incident to be classified as fuel theft police need to prove the offender had an intent to steal. However, a simple ‘I forgot’ response to a fuel theft incident removes the cause for intent and the case turns into more of a civil matter.

If a one-off fuel theft incident, once the offender has been identified, the petrol station operator can take them to court if they refuse to pay. But with court fees costing in excess of $130 and on average fuel theft being $67 per incident, the further pursuit of each single case is deemed too expensive. The debt recovery process then becomes too time consuming to bother with and is more often than not simply swept under the rug.

In an attempt to reduce the loss of drive-off fuel and decrease the time it takes to pursue each incident Perth startup ScanCam has developed a high tech security system. The system works by recording every license plate of each vehicle that enters a petrol station and integrates that data with a motorist’s history.

ScanCam detects each car that drives into a petrol station and simultaneously completes a history check on each vehicle. Checks are performed within a three second window and if a known fuel theft offender is identified then an alert is sent to the stations operators via an iPad behind the register.

The security system taps into the police fuel theft offender database to give petrol station operators an up to date log of each motorist who enters their venue. Once an offender is detected an operator can ask the person to pre-pay their fuel or otherwise they are offered no in-store credit on other items.

ScanCam also uses visual deterrents to decrease the amount of people who think they can simply drive-off without paying and experience no repercussions. Large installed TVs show each vehicle that is parked at a station’s pump. The video footage flashes every licence plate of motorists who are at the pump. When customers can visually see their licence plate recorded on site the deterrent effect is quite powerful.

Cofounder of ScanCam Eoin Byrne said, “As soon as we put the TV up the drive-offs dropped almost overnight, because people could see their licence plate. I think it’s pretty powerful when you can show someone that you can actually extract their licence within a few seconds and digitally display it in-store.”

ScanCam is currently scale testing its product in Western Australia and through that test the team has found that more often than not petrol stations have been trying to manage a lot of IOUs or customers who have insufficient funds. For example, Byrne said there are many instances where a customer goes in-store to pay and their credit card is declined or they have accidentally left their wallet at home.

As a way to buck the trend of fuel theft and reduce the amount of ‘I have no money’ instances, ScanCam created a IOU payment system. Petrol operators can now log each incident within 15 seconds and input the name, phone number and address of customers who have not paid. ScanCam automatically sends a text message to the customer stating their name, the amount of fuel they took, how much money they owe and to which store they owe it to.

Customers are urged to pay within 24 hours before further action is taken. Customers can return to the store to pay or can alternatively pay through a link ScanCam sends in a message where a web app opens and they can select the option to pay from home. A $3 hosting fee is charged to the customer, as part of providing a convenient payment option.

ScanCam gives customers a four-day grace period to separate the honest motorists who forgot to pay from the recurrent offenders. After four days the startup escalates the fuel recovery process to a debt recovery process, which may involve offenders going to court, and making arrangements for further payments.

ScanCam returns 100 percent of recovered funds to all fuel retailers and charges motorists a recovery fee of $40, which is split between ScanCam and the recovery department.

Across the initial scale test with the web app payment option and the visual camera deterrents, ScanCam has recorded a 63 percent reduction in fuel losses in Western Australia.

“Our sites are up and they’re seeing a higher rate of return on IOUs because of our IOU payment makes it easy, plus we automatically SMS that customer every morning for four days, prompting them to pay that IOU debt,” said Byrne.

ScanCam is also first to market with a new loyalty licence plate recognition technology, using frequency data to record how often a customer visits their local BP. For example if a customer frequents their BP six times in 10 weeks they can receive four cents off their fuel from ScanCam’s loyalty program.

For fuel retailers who want to take advantage of ScanCam’s smart technology system there is an upfront hardware fee and then an additional subscription fee with a starting price at $300 a month. The initial hardware installation includes cameras, infrared illuminators and TV screens.

To withstand all conditions ScanCam uses quality equipment engineered in Germany where the startup has developed hand-made cameras with a 10 year lifespan. Depending on the size of the petrol station and the amount of equipment needed, prices and subscription models can be negotiated.

ScanCam has currently raised $500,000 in a seed round backed by Zhenya Tsvetnenko, the Russian-born tech entrepreneur from Perth. Tsvetnenko was responsible for pioneering mobile phone gateway ringtones and in one year alone made an estimated $120 million, providing ScanCam with a world of unique industry knowledge and expertise.

In 2015 ScanCam also won the WA Innovator of the Year award from the Department of Commerce, through which it received $25,000 in funding.

The startup is set to launch its products and services to the east coast of Australia in July this year and is also looking to expand internationally to the UK after receiving attention from a few unnamed fuel providers.

However, the current focus for ScanCam is nailing down the Australian market, where Byrne said the team is currently in negotiations with some unnamed fuel retailers.

“We are actually talking to the big guys, we’re in early negotiations with two of the big retailers at the moment,” he said.

Another application ScanCam is working on is a process to recover and detect stolen vehicles. Byrne said the team is in talks with the police to develop a system that records information of every car that enters a petrol station, and if the vehicle is displayed as stolen in the database then the police will be notified and alerted within seconds of the car arriving on site.

Image: Anthony Schmidt and Eoin Byrne. Source: Supplied.