It seems like each week brings a new revelation that a major financial service provider, retailer, or government agency has had their computer system hacked. Thieves are targeting Social Security numbers, passwords, credit card information – “currencies” with value to them or others on the black market. Hackers look for gaps in security and when one door closes they search for another access point including your mobile app and loyalty program.
How does it work?
One method, according to an NBC News article, shows how hackers can hijack a consumer gift card, drain the remaining balance, then use the auto-reload function (if in place) to repeatedly add and steal money from the card. The article points to a Starbucks gift card user who was recently a victim. The attack works because many customers link their credit or debit cards to the gift cards that are loaded onto their mobile payment apps, and because criminals who access victims' Starbucks.com accounts can easily move value from a consumer's gift card to a card they control.
Loyalty rewards fraud
Gift card users aren’t the only victims.
“Fraud is moving away from banks and into big e-commerce companies. Criminals are learning how to turn rewards programs, points and prepaid cards into cash,” Gartner Security Analyst Avivah Litan told NBC.
According to Litan, there are underground forums where hackers swap and sell hotel and travel points for cash. Hackers are also cashing in stolen rewards points for “free” merchandise.
Protection for rewards program managers
At Connexions, we’re working diligently to get ahead of loyalty rewards fraud to protect our clients and their customers. We’ve partnered with top fraud protection analysts to develop fraud detection technology that identifies suspicious events across our clients, links those events and triggers an alert. Our fraud monitoring product uses more than 600 standard rules to identify fraud and conducts quarterly rule tuning exercises.
Our new fraud protection technology can be a client’s primary fraud solution or simply an additional checkpoint in the process. Learn more about our fraud protection product, available this summer, from Hannah White, director of product, in this Backstage Pass video.