September 2, 2015 — Cardholder rewards fraud – and how to protect yourself
Credit Card Guide, a website dedicated to credit card analysis, reports and news, has sourced NuData Security in this article covering cardholder rewards fraud.
Imagine you’ve diligently saved up credit card points or airline miles for a much-needed vacation, but when you finally log into your account to book your trip, the rewards balance is zero. Bye, bye Bahamian getaway.
With an estimated $48 billion in points and miles awarded in 2011, rewards fraud is a potentially lucrative game for criminals, according to Colloquy, which publishes research and information geared toward loyalty marketers.
One man’s estranged wife stole 2 million of his reward points by calling American Express and requesting the points be transferred to her Delta frequent flier account. Even if you aren’t going through a nasty divorce or other dispute, you could lose points or miles through rewards fraud committed by strangers.
Most rewards fraudsters aren’t brazen enough to book themselves an airline ticket or hotel with stolen points or miles. “What they’re doing quite a bit is laundering the points and transferring the accounts,” says Ryan Wilk, director of customer success for NuData Security, a behavioral analytics firm that helps companies identify potential fraudsters. “They’re buying tickets for others by posting a notice on Craigslist or eBay saying, ‘I have an airline ticket that I can transfer to you.’”