Fleet News

PHH faces fleet fuel card furore

FLEETS want to call in the Office of Fair Trading for a second look at PHH Vehicle Management's domination of the UK fuel card market after the manager of a major UK supermarket fleet was threatened with the cancellation of his fuel cards should his company refuse to accept new payment terms.

The fleet manager said PHH told him that the payment period for the £300,000 his company spends on fuel per month through 1,200 of the vehicle management firm's Overdrive cards had been reduced from one month to a week. He was told in a letter from Overdrive that unless he accepted the new payment terms by a set date 'all cards will be stopped and not acceptable at fuel sites'.

The fleet manager, who asked not to be named, said: 'PHH is just taking advantage of the monopoly it has and is squeezing money out of companies with its stranglehold on the market.'

He said PHH had also asked for an advance payment of £700,000 as 'cash security' but backed down after complaints from the supermarket.

The Association of Car Fleet Operators wants to hear from other fleets facing the same pressure from PHH which, since its buyout in 1997 of Harpur UK's fuel card operations, has had the largest slice of the independent fuel card market. The $186 million buyout was subject to an Office of Fair Trading investigation but the deal was given the green light.

ACFO chairman Tony Leigh said: 'We are exploring the issue because it raises those very same concerns that were raised at the time of PHH's purchase of Harpur. We may be moving into a situation where fleets are left with no alternative but to choose a PHH card if they want a fuel management service and if other fleets come forward we need to look at its dominance in the market.'

There are almost one million PHH-owned fuel cards in operation, including its own Allstar card and Overdrive and Dial cards. It also provides back-office management for another 400,000 cards operated by the likes of BP, Jet and Morrisons, Asda and Sainsbury's supermarkets.

Keith Greenhead, director of fuels at PHH, refuted all suggestions that the company had a monopoly and said the 'renegotiation' of the supermarket's contract was standard practice.

'Some 72% of businesses elect to use a dedicated fuel card and we are in a leading position in that market. But the remaining third pay for fuel in other ways. For example, our biggest competitors are Barclaycard and Visa card, but they don't offer the fuel management services we do.

'And fleets can also choose from oil company cards, such as BP and Jet, because although we provide back-office support, they set the terms and conditions of use.'

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