Loyalty fraud in the airline world is more pervasive than you think.

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By: Lanndon Lindsay |

Posted on September 20, 2018

Fraud in the loyalty world is a salient issue, and the airline industry is far from immune. Underpinning the discussion is an examination of how consumer behaviors and attitudes towards loyalty is impacting the scope of fraud; consumers are more connected and active online than ever before, allowing fraudsters to evolve ever more sophisticated methods of deception.


“Today you can do anything you want online. You can mortgage a house, you’ve got apps that are disguised as wallets…now the average person has seven devices that connect with the internet on a daily basis. This creates a situation where there are more opportunities for fraud to be targeted along the path-to-purchase.” – Don Bush, VP of Marketing, Kount


Loyalty practitioners need to understand the motivations of fraud perpetrators if they are to have any hope of protecting themselves and their members. Recently, major breeches of British Airways and Air Canada have come to light. The data that was stolen could allow fraudsters intimate access into the lives of consumers that reaches far beyond their digital fingerprint and online presence created through loyalty program engagement.


“It’s not because fraudsters want to buy a bunch of airline tickets…if they can figure out a consumer has many different accounts online from the data they pull from hacking an airline loyalty program, there’s a very good chance they can get into several of those other accounts because consumers often use the same password and ID.”


It’s a complicated situation for loyalty vendors, who want to continue providing members with a frictionless experience (the CX of a program is something no vendor can afford to sacrifice) while simultaneously establishing the necessary protocols to ensure security. The first step to a resolution is a simple yet profound one: collaboration. There has to be open communication between the different departments responsible for security – the marketing department, IT, payments, the treasury – and unfortunately, this collaboration doesn’t happen often enough.

When these silos are broken down, the question turns to the specific tactics which can be enacted to circumvent fraud. In a world where consumer behaviors are driven by technology, and the malfeasant motivations of fraudsters are partly enabled because of this technological reliance, can loyalty vendors themselves leverage tech sophistication in the form of enhanced security like machine learning and AI’s? The answer is yes, but not in lieu of human expertise. A concerted digital effort to fight fraud is a transformation that requires new tools; the best systems will incorporate multidimensional fraud screening, advanced AI machine learning, and experienced human intelligence providing best practices and acquired wisdom.

The essence of this webinar speaks to how perceptions of fraud must change in order for loyalty practitioners to have the best chance of securing the industry. Fraud and risk teams cannot be viewed as simple cost centers; data sharing amongst organizational silos is important, because consumer interactions are comprehensive across many different areas of the business; and finally, the threat of an attack is far costlier than the mere dollar value of tangible damages. In a volatile environment with constantly evolving opportunities for fraud, brand equity and reputation can often be irreparable once they are harmed.

Airline Information and Kount teamed up to produce a webinar on the topic of loyalty fraud in the airline industry.  In it, Chris Staab of Airline Information, and Don Bush of Kount, survey the bigger issues involved and discuss actionable steps that loyalty marketers can deploy to protect their members and their brand.  You can access the recorded webinar here.

Lanndon Lindsay is a reporter for The Wise Marketer.