Beware of fake accounts and stolen identities.
SINGAPORE - E-commerce fraud prevention brand Forter, has launched its Loyalty Program Protection solution offering protection from fraud and abuse. These include transactional fraud, account-based fraud, and policy abuse.
Loyalty programs are designed with the aim of retaining customers but it has created lucrative avenues to commit fraud in new account signups, referral programs and coupon use at the last-mile transaction point.
According to Forter, loyalty program fraud rose 89 per cent year on year, predominantly driven by the amount of personally identifiable information (PII) available from increasing numbers of data breaches. Fraud attacks shift from the point of transaction to different elements of the buyer's journey, including new account signup, login, and promotion and coupon use.
"Our loyalty program allows us to thank our customers by rewarding them with better benefits and a better experience while also enabling us to stay ahead of the competition. Features like 'Tell-a-friend,' rewarding customers for referrals, are extremely popular, but are also a target for fraudsters and bad actors," said Forter client, Mr Doug Ferreira, director, Financial Operations, delivery.com.
"Forter has helped us reduce loyalty program fraud by more than 60% while we build stronger relationships with our customers."
Forter claims that 42% of merchants state they do not have the skills required to prevent fraud and abuse. About 50% report insufficient resources, and that loyalty programme account fraud prevention is considered a low organisational priority.
"The combination of consumers not paying attention to their accounts and merchant unpreparedness is a big reason fraudsters find loyalty and rewards programs so alluring. It is clear that loyalty program accounts are low hanging fruit for fraudsters," said Forter's co-founder and CEO, Mr Michael Reitblat.