Are loyalty and rewards programs vulnerable to cyberattacks?
Yes. Loyalty and rewards programs are increasingly targeted by cybercriminals because they store valuable assets—points that can be redeemed like cash and personally identifiable information (PII). Weak authentication methods, especially password or PIN-based systems, make these accounts highly susceptible to account takeover and fraud.
TL;DR
Loyalty programs are worth billions but are often protected by outdated authentication. As attacks rise, organizations must prioritize secure, passwordless authentication to protect customer accounts, reduce fraud, and preserve brand loyalty.
The Growing Loyalty Economy—and Its Risks
Loyalty programs are big business:
3.8 billion rewards memberships in North America
$60B+ in rewards value in North America
$250B+ globally in loyalty program value
(Source: LoyaltyOne, Loyalty Fraud Prevention Association)
These accounts are lucrative targets. Criminals exploit weak login security to hijack points, steal user data, and resell access on the dark web.
The Fraud Problem Behind the Points
Between 2016 and 2017, loyalty account fraud tripled, costing $2.3 billion globally (PYMNTS). Attacks have only accelerated since, driven by automated bots and credential stuffing using leaked username-password pairs.
High-profile examples:
Marriott Rewards and Radisson breached in 2018
PC Points and Scene reward programs exploited
Mastercard loyalty programs targeted by fraudsters
79% increase in account takeovers in 2019
These breaches result in stolen points, customer churn, negative press, and regulatory fines—like the $123 million GDPR fine levied against Marriott.
Why Passwords Aren’t Enough
Most loyalty accounts still rely on:
Passwords
4-digit PINs
Email-based login links
These systems are easy for bots to breach and offer no defense against phishing or credential reuse. Password reuse across services makes these accounts an easy target—even for amateur attackers using public breach data.
Protecting Loyalty Programs with Passwordless Security
To reduce fraud and protect brand trust, businesses must shift to more secure login methods. This includes:
1. Decentralized, Passwordless Authentication
BlokSec enables secure, passwordless login using:
Mobile devices as identity factors
Biometric authentication (fingerprint, face ID)
Consent-based authorization and blockchain-backed verification
This makes it virtually impossible for criminals to steal or replay credentials.
2. Stronger Protection Against Account Takeover
By eliminating passwords entirely, organizations remove the most common entry point for fraud. BlokSec’s Immutable Authentication™ ensures real users are in control—every login requires proof of possession, presence, and intent.
Why It Matters to Business Survival
Loyalty and rewards programs are more than perks—they’re revenue engines. Customers are less likely to return to a brand that’s had a breach, and regulators are tightening privacy expectations globally.
Without secure authentication:
Brands lose customer trust
Fraud eats into margins
Regulatory fines increase
With it, you build loyalty that lasts—and you stay ahead of fraud.
FAQ: Loyalty Program Security
Why do loyalty programs get targeted by cybercriminals?
They hold two valuable assets: reward points (which can be sold or redeemed) and personal data. Many programs use outdated authentication that’s easy to bypass.
What is account takeover (ATO)?
Account takeover happens when an attacker gains unauthorized access to a user’s account, usually through stolen credentials or brute force.
How can passwordless authentication help?
It eliminates shared secrets entirely. Users log in via biometrics or cryptographic methods that can’t be stolen or phished.
What standards support secure integrations?
BlokSec supports industry standards like SAML, OIDC, and REST APIs, enabling seamless integration with loyalty platforms.
