It’s no secret that fraud is prevalent on the internet, from phishing scams to loyalty account takeovers. But what happens after a fraudulent loyalty account takeover? To start, hackers often take to the Dark Web, the often seedy underbelly of the internet where they can auction off stolen loyalty account logins, points and miles, even merchandise that they’ve fraudulently redeemed.
How much could a single instance of rewards program fraud cost your brand? The hard costs (replacing stolen points and miles) may be clear, but the hidden costs (negative word of mouth, lost customers) may be harder to calculate.
Loyalty fraud is evolving. Fraudsters are getting smarter, and so must the solutions that protect brands – and loyal customers – against them. Using artificial intelligence is no longer the future of fraud protection: it’s a critical pillar.
A Fortune 500 community bank nearing its 150-year anniversary has hundreds of billions of dollars in assets and operates thousands of financial centers across several states.
Customers expect financial institutions to have the highest level of fraud protections in place, but online fraud is constantly evolving. And while financial institutions have rigorous systems in place to prevent banking fraud, one very valuable asset is often left exposed: loyalty rewards accounts.
Loyalty program members, especially those in the financial services industry, expect those companies to guard their personal information in the most robust way possible. And while 72 percent of loyalty program managers report experiencing fraud, many are challenged to build a case internally for this type of protection.
The right rewards mix encourages both customer engagement and point spend. But increasing loyalty rewards redemption requires a targeted customer segmentation strategy, often going beyond just typical travel rewards offerings.