Behavioural biometrics proves key in preventing loyalty fraud
Companies across retail and other industries are bolstering their security, as hackers become more sophisticated by constantly changing their attack vectors. Their latest target: loyalty programs. The cost of data breaches is anticipated to hit USD 2.1 trillion globally by 2019. The cost of loyalty fraud can be as high as USD 8,000 for one instance. With 3.8 billion loyalty memberships nationwide, loyalty programs are proving to be a lucrative source for cybercriminals.
Rewards points often sit unused for long periods of time. An estimated USD 238 billion in rewards go without ever being redeemed. A customer at “store XYZ” might save their points to cash out on a big-ticket reward item but never use them. At least 44% of customers do not monitor accounts for suspicious activity. What’s worse, account holders often will not know they’ve been hacked until they log in.
The value of loyalty points for hackers
From tiered rewards programs to miles, loyalty points of all kinds are essentially the equivalent of cash. Rewards can be redeemed for products, free shipping, flights and hotel stays. The value these loyalty programs have across industries is tremendous. But most still rely on weak usernames, passwords and PINs that leave accounts vulnerable to cyberattacks. About 20% of people choose their birth year as their PIN. About 72% of airline loyalty programs have experienced fraud, while retailers consider loyalty fraud to be one of the most harmful threats.