More than 30 percent of consumers admitted to abusing referral programs by referring themselves using a new email address to obtain a discount or incentive, according to a recent survey by PYMNTS. When asked about seven different forms of friendly fraud or abuse they may have engaged in over the trailing twelve months, only 40 percent of those surveyed stated they did not partake in any of these schemes.
Of the seven different types of abuse or friendly fraud asked about, each was performed by at least one-in-five of the consumers surveyed. The survey results were published in a report titled The Challenge of Cheaters. The survey was conducted by PYMNTS between June and July 2022, with over 2,000 complete consumer responses.
Nearly 23 percent of those surveyed admitted to disputing received items as not received, one of the most common forms of friendly fraud. Forms of referral abuse were among the most common, with 31.1 percent of consumers admitting to obtaining and using their own referral codes creating a new email address or synthetic identity, and 26.4 percent driving up referral rewards by publicly releasing referral promo codes, such as on coupon and discount forums.
Promo abuse was also alive and well. 22 percent of consumers admitted to creating multiple accounts for the purpose of claiming introductory or new customer offers, 20.6 percent reused vouchers multiple times with multiple accounts, and 28.5 percent tried guessing discount codes.
While these finding come from a very recent survey, concerns around inflation and economic health have only worsened since then. As discussed in The Fraud Practice’s article Stop Identity Fraud and Promo Abuse in the Face of a Potential Recession, turbulent economic times are associated with higher rates of “soft” fraud and abuse. While share of consumers engaging in referral and promo abuse shown in this survey is alarming, it is likely to increase in 2023.
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