Faithful customers are handing in their personal data in return for rewards, yet hackers are stealing the rewards along with your personal data.
Hackers are using loyalty program accounts to gain access to other linked accounts. From there hackers are even going on to sell these accounts.
A loyalty-fraud prevention group estimates that $1 billion a year is lost to crime related to these loyalty programs. On the data side of things, hundreds of millions of customers data has been breached for example Marriott’s Starwood unit or Dunkin’ Donuts’ DD Perk program.
Thomas O’Toole, executive director of the Kellogg School of Management’s data analytics program at Northwestern University said that these reward programs are the single best source of individual customer data relevant to developing personalized marketing.
More than $100 billion a year in reward points are not redeemed as more than half of the reward memberships in the United States are inactive.
To help combat such data breaches, companies are increasing their defenses with two-factor authentication, facial recognition and stronger login requirements in general. Companies are making use of hiring digital security firms like Sift, about 34,000 websites and apps use Sift’s services.
This article was based on Tiffany Hsu’s (on Twitter:@tiffkhsu) article which can be found here.
