Auto Loading Your Loyalty Card is a Bad Idea

I ran into a very bad issue with my Starbucks loyalty card a while back, when all the information in the Starbucks database was hacked and my account information was stolen. This information hack allowed the thieves to create their own version of my Starbucks card, and they “went to town” on it.

Let me digress , remember that the Starbucks loyalty card is not a credit card per se, it is a card which is “filled” from a money source so that you can buy things (note I said things not just coffee) at Starbucks (and collect allegiance points and such). You can “fill” the card from a bank account, a credit card or even your Pay Pal account, and you can fill it one time or you can set up the “Auto Load” mechanism. The auto-load mechanism will take money automatically when your loyalty account balance drops to zero (or a preset threshold), and this is where the hackers found their angle.

The scam seems to run like this, once your account or loyalty card is “cloned” someone goes into a Starbucks store, and buys $100 worth of things (most times just a gift card), and then the auto-load kicks in, takes money from its source (Credit Card, Bank Account, etc.,) and then the thief go to another store and will buy another loyalty card, and this continues on until the account is flagged or in my case, I saw what was going on and called to cancel the auto-load. The only reason I knew this was happening was because I got notifications on my phone telling me that the auto-loads happening.

Loyalty Card Scam

A Graphic Rendition of the Scam

In my case I was lucky enough to catch it early, and Starbucks was smart enough to refund me all the money taken (after 15 business days).

Since this incident I have gone to any other loyalty cards that I have like this and turned off the auto-load option, to stop this scam from happening again (some examples might be a Tim Horton’s card or maybe your Subway Card?).

This is not a commentary on the Starbucks Brand or Coffee (I still drink it and enjoy it), but a reminder of the fact that the easier it is for you to spend money, the easier it is for the scammers to find a way in to get at your money (and spend easily as well).

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TV Show: Financial Squeegee Scam

Around Ottawa (and other cities) the Police are running a new “scam” to catch folks that are on their Cell Phones while driving (which in Ontario is against the law).

The first scam is a “homeless” person standing on a highway off ramp with a hand written sign on a piece of box card board, who approaches a car, and if the person looks closely at the sign it says:

I am Sergeant BCM of the Ottawa Police, you have been caught talking on your cell phone while driving, please pull your car over.

Or some similar sentiment to that. Evidently it has been quite successful, and there are variants out there on this thematic concept as well (“Squeegee Kids” that are actually cops, that can catch you on the phone as well). One of the cops claims he collected over $10 in change as well!

Mean Spirited TV Show Idea

This got me thinking is there something we could try for a TV show to run this kind of scam on the financial side of things. We should set up a store front  for a “Pay Day Loan” or cheque cashing store (in an affluent neighbourhood).

Another thing we can do is have lots of posters “advertising” cheque cashing services which actually say things like “Only losers would use this service” and “We are going to take all your money and leave you broke” and other great stuff like that (with scantily clad women as part of the advertising as well). We could call it the “We Screw You Pay Day Loan Service“.

When people come in, have the “teller” ask lots of questions like:

  • How much do you earn in a year?
  • Do you have a bank account?
  • Why do you need to use this service?
  • You realize this service is designed to screw you out of your money?

If it turns out that this is obviously a person who shouldn’t be using the service berate the “customer”  but if they continue to insist they need to use the service, tell them they are on “BCM’s Financial Follies“.

Yes, it sounds like a mean-spirited nasty show, so that is why I am positive it will be a hit!

Are there other variants on this scam that could make this TV Show into a series? A hedge fund version of the store front scam?

 

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