New Zealand
New Zealand New Zealand
Consumers make most of their payments by internet banking
  • 74%
  • 70.5%
  • 54.5%
  • 46.5%
  • 39.6%
  • 40.7%
  • A higher percentage make payments via internet banking to banks and insurance companies, telcos, and retailers, respectively, compared to the regional average
  • Impact: Anti-fraud capabilities critical to the increased digital transaction frequency and customers’ trust in banks
Australia Australia
Consumers are most satisfied with the post-fraud service of banks and insurances companies
  • More than 70% satisfaction rate compared to 59.7% on average
  • Impact: Increased trust in BFSIs
Indonesia Indonesia
Consumers that encountered most fraud incidents in the past 12 months

AP Average

  • 49.8% have experienced fraud at least once compared to 34.7% on average
  • Impact: Overall anti-fraud capabilities need improvement
Singapore Singapore
Consumers have the highest trust towards government
AP Average
  • 75.5% choose government agencies, compared with 51.7% on average
  • Impact: Trust of personal data protection is centered around government agencies
Vietnam Vietnam
Consumers encountered most fraud incidents in retail and telco during the past 12 months
  • 55%
  • 54.5%
  • 32.8%
  • 35.2%
  • 55% and 54.5% have experienced fraud at least once in retail and telco, respectively, compared to 32.8% and 35.2% on average
  • Impact: Overall anti-fraud capabilities need improvement
Thailand Thailand
Most Thai consumers believe speed and resolution are severely lacking (response/ detection speed toward fraud incidents)
AP Average
  • 60.5% think it is most important, compared to 47.7% on average
  • Impact: Response time as one of key factors to fraud management to retain customers and gain their trust
India India as standalone
Consumers have the largest number of shopping app accounts in the region
  • Average of three accounts per person
  • Impact: Highest exposure to online fraud
Hong Kong
Hong Kong Hong Kong
The least percentage of consumers with high satisfaction level toward banks and insurance companies’ fraud management
AP Average
  • Only 9.7% are most satisfied compared to 21.1% on average
  • Impact: effective response towards fraud incidents to be improved
China China
Consumers are the most tolerant toward submitting and sharing of personal data
AP Average
  • 46.6% compared to the AP average of 27.5% are accepting of sharing personal data of existing accounts with other business entities
  • Impact: higher exposure of data privacy and risk of fraud
Japan Japan as standalone
Consumers most cautious on digital accounts and transactions
50.7% Actively maintain digital accounts’ validity
27% AP Average
45.5% Do not do online bank transfers
13.5% AP Average
  • More than 70% did not encounter fraud incidents in past 12 months, compared to 50% on average
  • Impact: Relatively low risk of fraud

The real cost of loyalty program fraud

The real cost of loyalty program fraud

An immense 71 per cent of the Australian population are members of at least one store loyalty program, according to recent research from Roy Morgan. That’s one per cent higher than credit card ownership numbers in Australia, shown in the most recent Finder survey.


This explosion of loyalty programs has provided marketers and retailers alike with rich data insights and a powerful customer retention tool. This information can quickly become a business’ most valuable asset, helping them to reach individual customers with products and services to fit their needs.


As with all valuable assets, it needs to be protected.


In Experian’s recent Global Fraud Report we identified the growing fraud risks for retailers, with three-quarters of loyalty programs having experienced fraud attacks globally. The report explains why the onus is on retailers to ensure loyalty offerings not only engage customers, but are safe and secure from fraudsters.


While the monetary implications of this fraud can be significant for businesses and customers alike, there are other losses that stem from fraudulent activity, which retailers also need to be aware of and take steps to protect against.


The rising fraud threat


There are many ways a criminal can obtain a loyalty customer’s login credentials, including data server breaches, malware or phishing programs. But what damage can a fraudster do if they obtain access to an account?


The average consumer has 25 online accounts, but only uses five or six passwords, research in the Global Fraud Report shows. For millennials this can be upwards of 100 online accounts with the same small set of passwords across those logins.


This means when a criminal gains access to data on one loyalty system, this exposes the customer’s personal details to identity theft and fraud of other online accounts like banking, online shopping or email by using the stolen login credentials.


So how large is the risk to Australian customers? A 2016 Australian Bureau of Statistics study found: “In the 12 months prior to interview in 2014-15, an estimated 1.6 million Australians experienced personal fraud, or 8.5% of the population aged 15 and over.” (ABS 2016)*


The Australian Federal Police in 2017, explained: “recent estimates by the Attorney-General’s Department indicate that identity crime costs Australia upwards of $1.6 billion each year, with the majority (around $900m) lost by individuals through credit card fraud, identity theft and scams. More alarmingly, identity crime continues to be a key enabler of serious and organised crime, which in turn costs Australia around $15 billion annually.”


Trust and loyalty go hand in hand


Consider what your typical loyalty program means to a customer, whether it’s used for purchasing their daily coffee or redeeming points for the holiday of a lifetime, loyalty programs represent the relationship and connection a customer has with your business. As with any relationship, if trust is broken the relationship is at considerable risk.


That’s why customers react to loyalty program fraud with outrage.


The Global Fraud Report shows that after falling victim to loyalty program fraud, 26 per cent of customers will cancel their rewards membership,17 per cent will stop doing business with the company and 37 per cent will tell others about their loss and the vulnerability of the loyalty program. Clearly, this type of fraud can be incredibly damaging to your business’ reputation and why defending your loyalty program against fraud is as much about brand protection as it is loss prevention.


Protecting against fraud


The best fraud protection technology helps businesses increase security and maximise profitability without impacting on the customer experience. In fact, customers shouldn’t even be aware of what’s happening behind the scenes to keep them safe.


Advances in fraud protection technology, including the evolution of behaviour analytics and device identification means that retailers can offer their customers greater protection, even if the fraudster knows their password. This sort of technology is scalable for all business types, and for a wide variety of purposes, from loyalty programs to e-commerce.


As fraudsters’ methods continue to evolve, the only way for businesses to protect their most valuable customers – their loyalty program members – is by taking a proactive approach to fraud protection.


Suzanne Steele is Managing Director of Experian Australia New Zealand

*Australian Bureau of Statistics, 2016, Australian social trends, 4528.0 - Personal Fraud, 2014-15, viewed 10 March 2017,

Read full article

Sound interesting? Follow us for regular, published insights

twitter google plus linkedin mail
Suzanne Steele

By Suzanne Steele

Related Products

Decisioning Fraud – CrossCore

Smart, open API platform to manage fraud and identity services.

Decisioning Fraud – CrossCore
Online Fraud Detection – FraudNet

Industry leading device intelligence to detect online fraud in real-time.

Online Fraud Detection – FraudNet
Application Fraud Prevention – Hunter

Prevent, identify and stop fraudsters at the point of application across all channels.

Application Fraud Prevention – Hunter
Dark Web Monitoring – CyberAgent

A powerful internet surveillance tool to unlock dark web intelligence for your customers and employees.

Dark Web Monitoring – CyberAgent

Related Articles

What is first, second and third party fraud?
What is first, second and third party fraud?

Fraud prevention has become increasingly critical and with new fraud trends emerging all the time, businesses need to consider these while developing strategies to fight fraud.

Learn more
Five fraud threats to watch for during economic recovery
Five fraud threats to watch for during economic recovery

We take a look at some key fraud threats that can impact businesses and consumers.

Learn more
Enter the age of digital onboarding
Enter the age of digital onboarding

As nearly all activities shift to online channels, one of the biggest challenges facing organisations is knowing with confidence who they’re doing business with.

Learn more

  • Download Now
By providing your personal information you agree that we may collect and process it in accordance with our Privacy Statement.