Major loyalty programs which support status tiers often run status match campaigns, but these can inadvertently open the door to status match fraud. These campaigns, typically offered by airlines and credit card programs, allow high-status members from other programs to access the same status level without earning it through traditional channels like flights or spend. However, fraudsters can exploit this system.
Depending on the verification processes, it can be possible for fraudsters to create counterfeit membership cards which show they are a high status (e.g., Platinum). They will then receive Platinum with the program. This will then allow them to take advantage of other programs conducting status matching, although this time with a genuine card.
Status match fraud risks
Status match fraud presents several substantial risks to loyalty programs.
Firstly, fraudsters create counterfeit high-status membership cards, such as Platinum tier, to gain unearned elite status in other programs. This initial breach can lead to cascading fraud, where a single fraudulent high-status membership is leveraged to obtain elite status across multiple programs.
Weak verification procedures exacerbate the problem, allowing fraudsters to exploit status match campaigns without legitimate qualifications. The rise in status match promotions, particularly following the COVID-19 pandemic and the travel resurgence in 2023, has correspondingly increased the prevalence of status match fraud.
Perhaps most concerning is the devaluation of legitimate status. As fraudulent elite members flood programs, the value and exclusivity of status for those who have earned it through genuine engagement and loyalty are significantly diluted.
Mitigations for status match fraud
To combat status match fraud, loyalty program operators should implement robust strategies.
Enhanced verification processes are crucial, requiring more than just a membership card or image. Evidence of transaction activity that proves the accumulation of status credits should also be mandatory.
Collaboration with competitors has proven effective, with some airlines working together to verify the status of members seeking matches, thereby reducing fraud incidents. Thorough background checks should investigate the origin of a member’s current status, distinguishing between earned and promotional status.
Clear terms and conditions are also essential, explicitly stating any limitations regarding promotional versus earned status in status match campaign rules. Post-match requirements can also be implemented, such as rules that require newly matched members to demonstrate program engagement by completing a certain number of flights within a specified timeframe to maintain their matched status.
Case Study: United Mileage Plus
United Airlines demonstrated a proactive approach to combating status match fraud in a notable case. The airline denied a status match after discovering that the member’s current competitor status was not earned but rather promotional from an earlier status match with another airline. United contacted the competitor airline to research the status history, ultimately denying the match on the grounds that the current status was not earned through traditional means.
This case highlights several important points. United has established a process for sharing information with other airlines when processing status match requests and will reach out to competitors to validate a customer’s current frequent flyer status if they identify a discrepancy. (However, this practice is not disclosed in United’s published status match terms, raising potential privacy concerns.)
Interestingly, unlike Delta, which explicitly excludes promotional status from their status challenge offers, United’s terms do not make this distinction clear. This case underscores the need for transparency and clear communication in status match policies to prevent misunderstandings and potential fraud.
This case also emphasises the necessity for clear and transparent status match policies, as well as the growing trend of inter-airline cooperation to combat fraudulent activities.
As loyalty consultants observe, the sharing of personal information between airlines during status match requests raises important privacy considerations that warrant further examination.
The evolving landscape of loyalty program fraud necessitates ongoing vigilance and proactive measures from program operators and members alike.
To address these challenges, Loyalty and Reward Co offers a comprehensive series of articles exploring various aspects of loyalty program fraud, providing valuable insights and strategies for safeguarding your program.
For bespoke advice on protecting your loyalty program from status match fraud and other security threats, we strongly encourage you to engage with our team of experts. Our tailored solutions can assist you in implementing robust security measures, mitigating risks, and ensuring the long-term success of your loyalty initiative.
Safeguarding the integrity of your loyalty program is paramount. Contact Loyalty and Reward Co today to take the first step towards creating a more secure and resilient loyalty ecosystem that protects your brand and rewards genuine customer engagement.
Acknowledgement
Thank you to Michael Smith, co-founder of the Loyalty Security Alliance and contributor to ‘Loyalty Programs: The Complete Guide’, whose expertise helped inform insights presented in this article.
Referencias
- UpgradedPoints (2024, August 20). Ultimate Guide to Airline Frequent Flyer Status Matches & Challenges [2024] https://upgradedpoints.com/travel/airlines/airline-status-matches-challenges/#:~:text=Status%20Match%20%E2%80%94%20Some%20airlines%20will,for%20the%20specified%20time%20period.
- Loyalty Security Association. (2023). Best Practices for Loyalty Program Security.
- Smith, M. (2022). Navigating Fraud Risks in Modern Loyalty Programs. Journal of Loyalty Marketing, 15(2), 78-95.
- Loyalty and Reward Co. (2023). Comprehensive Guide to Loyalty Program Fraud Prevention.
- Leff, G. (2022, November 27). United Will Share Your Personal Information With Other Airlines When You Request a Status Match. View from the Wing. https://viewfromthewing.com/united-will-share-your-personal-information-with-other-airlines-when-you-request-a-status-match/
