When you think about someone stealing your credit card, you probably think about someone stealing your physical card or your card number and taking it on a shopping spree. While having your card stolen is no fun, most credit card companies include fraud protection so you aren’t liable for any purchases. Unfortunately, fraud protection isn’t formally available for stolen miles and points.
Not satisfied with stealing credit cards to make purchases, fraudsters have evolved into stealing credit card rewards. It is much easier for stolen points to go undetected, and they can be redeemed for gift cards and cash.
My wife and I recently had 200,000 American Express Membership Rewards stolen from our respective accounts. Luckily, we caught it quickly, and American Express was kind enough to return our points.
Here’s how our credit card points were stolen, and how you can prevent this happening to you.
How Credit Card Points Are Stolen
Tracking credit card points can seem to be a waste of time, but without proper tracking, your points can be stolen and the theft can go undetected.
Stealing credit card points is more complicated than stealing a credit card for unauthorized use. Fraudsters must acquire your login, log into your account and then clean it out in a manner that is useful. Credit card companies do not have similar fraud alerts for points, so fraudsters can easily go undetected.
Stolen points typically end up being sold on the dark web, redeemed for gift cards or used for merchandise purchases through the rewards program.
This practice isn’t anything new, but the COVID-19 pandemic presents a plum opportunity for scammers. As travelers stop traveling, they are still spending on credit cards and possibly paying less attention to their rewards account. The result is heaps of rewards for the taking.
In our case, my wife and I both randomly started to receive hundreds of spam emails, beginning with an email from American Express. We both checked our accounts, and sure enough, we were missing over 200,000 American Express Membership Rewards from our accounts.
The thieves redeemed our points for retail gift cards, and then attempted to make expensive purchases on my Blue Business® Plus Credit Card from American Express. It was the fraudulent purchase that caused American Express to notice.
Once we discovered the theft, we immediately called customer service to freeze our accounts. American Express reset our passwords, and then sent us replacement cards. American Express wasn’t able to identify how our accounts became compromised, but this should be a concern for anyone earning credit card rewards.
How You Can Prevent This Happening To You
As data breaches become a common occurrence, your data and information is constantly at risk. Additionally, as you shop more online, you have a higher risk of someone swiping your credit card information. Fortunately, there are a few things you can do to protect your credit card rewards.
- Change your passwords regularly. This will help secure access to accounts with sensitive information.
- Use an identity theft monitoring service to notify you of any suspicious activity.
- Avoid opening emails from unknown senders.
- Avoid using unsecured Wi-Fi, and if you do use unsecured Wi-Fi, consider using a VPN.
- Use virtual card numbers, if you have access to them, when shopping online.