Whether making fraudulent purchases to accrue loyalty points and rewards, or taking over legitimate customer accounts to steal and spend the loyalty balances they’ve built up, loyalty fraud is damaging with both financial and brand risks. Despite the growth of loyalty-based fraud in recent years, this is still a vulnerability point for many organizations that offer such reward programs. Recent statistics and case studies involving loyalty fraud are discussed in this FraudBlog post.
According to a 2015 survey conducted by Ipsos Public Affairs for Connexions Loyalty, 72 percent of loyalty program managers had experienced fraud related to their programs, while one-in-three said it is a fast growing concern. There is plenty of meat on the bone for fraudsters to go after, as the 2015 COLLOQUY Loyalty Census tallied 3.3 billion loyalty memberships in the United States with points, rewards cash and miles worth an estimated $48 billion.