![]() ![]() These criminals take advantage of loopholes in the system and target loyalty programs across all business types. While loyalty programs typically do not carry a “cash” value, fraudsters are still able to make a profit by stealing points or miles that can be exchanged for gift cards, travel or other rewards. With these numbers, it’s no surprise why loyalty programs are hot on a fraudster’s radar. To further the case, a survey by Connexions Loyalty and Ipsos revealed that at least 44 percent of customers don’t actively monitor their accounts, leaving them extra vulnerable to hackers6. In fact, RFi Group reported that an estimated $238 billion in loyalty program rewards earned by consumers have never been redeemed5. ![]() Although the number of loyalty members is high, it turns out that customer engagement is low. The value of points and miles currently stored in all U.S. Whether they collect miles, points towards a free hotel stay, or cash rewards, an impressive 83 percent of consumers belong to a loyalty program2 – in fact, an average household belongs to 29 programs3. According to the 2017 COLLOQUY Loyalty Census, there are 3.8 billion loyalty program members in the United States alone1. ![]() Loyalty programs have been around since the 18th century and have evolved from retailers giving out copper coins that encouraged repeat customers, to mobile apps that track a customer’s spending and reward them for frequent purchases. Companies may be getting smarter, but fraudsters are too, and they are beginning to shift their focus to a different, more inconspicuous target – loyalty programs. Banks in particular are cracking down on fraud and putting sophisticated anti-fraud programs in place to keep their customers’ privacy secure. In fact, it’s something we hear about on a near constant basis from our email providers, banks, credit card companies and airlines. The topic of fraud is not a new phenomenon. ![]()
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