Loyalty program fraud has seen an astronomical rise of 89% year-on-year, and is now estimated at $1 billion each year.

According to e-commerce fraud prevention agency Forter, this is predominantly driven by the amount of personally identifiable information (PII) available from increasing numbers of data breaches.

According to e-commerce fraud prevention agency Forter, enterprises are struggling to limit damage as 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.

Loyalty programs have grown exponentially in the last decade, with memberships increasing nearly 10% year on year. Consumers have accumulated $48 trillion of unspent loyalty points globally. Nearly half (45%) of loyalty programme accounts are inactive, with consumers not tracking or redeeming points.

“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 Michael Reitblat, co-founder and CEO of Forter.

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