There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Rewards Points Programs: Introducing the Capital One Smart Rewards Mastercard.

Rewards Points Programs: Dust off those PTO days and grab your finest pair of flip flops with the American Airlines AAdvantage Mileup card. You earn miles that add up to getaways and two times miles at grocery stores.

Rewards Points Programs: With the new Starbucks rewards, we're rewarding you with more of the things that make you smile. You've been loyal. We want to reward that. Download the McDonald's app, register and earn points.

Rewards Points Programs: You tell me what's in your wallet.

Earmark CPE: Are [00:00:30] you an accountant with a continuing education requirement? You can earn free Nasba approved CPE for listening to this episode. Just visit earmarked app in your web browser. Take a short quiz and get your certificate.

Caleb Newquist: Hello and welcome to Oh My Fraud, a true crime podcast where there are no missing persons, just a lot of missing money. I'm Caleb Newquist. Nice to see you. How's it [00:01:00] going? Hanging in there, I hope. I'm hanging in there, you know. Could be better. Could be worse. Anyway, uh, I do not talk about my day job on here much. And that's mostly because I agreed not to. Uh, but I have been doing a lot of video work lately, and that's been fun. Uh, I feel like I've learned a lot, you know, and learning more all the time. But anyway, having said all that, uh, this has never been a video first podcast. [00:01:30] Greg and I did not when we set out. That wasn't really part of the thing in our minds. It was always audio first, but that is that is not all the rage as far as podcasts go. There's lots of podcasts that are streamed on YouTube. And, um, you know, they're just I if I, if I understand it right, YouTube is the biggest podcast platform on the internet. So anyway, you know, and that's fine. Whatever. I just happen [00:02:00] to like audio first or. Yeah, audio only, whatever. If you like the video, if you like watching or listening to podcasts on YouTube, or my friend has a channel and I actually have been posting a few more clips there recently from our conversations with John Whale and Becca Latsky those two, I've been posting clips from those and um, yeah, you should check them out.

Caleb Newquist: If YouTube is your thing, you can go to YouTube search on my fraud. It'll come right up. So yeah, check things out there. [00:02:30] And also I will mention that I'll probably be posting some of some clips to Instagram if you like hanging out there as opposed to, I don't know, anywhere else, but um, yeah. So whatever your preferred platform, we're trying to get on there, be a little more active and if not, whatever. You know, we want people to find the show and people hang out in those places, so fine. Tiktok I don't know, lots of people on TikTok. We'll see. Stay tuned. All right. Okay. [00:03:00] Reviews. Let's do a couple reviews. Here we are. Apple podcast, this is Prudence Gee, who gave the show five stars and wrote my favorite CPE podcast. This is my go to podcast for CPE. Thank you for making continued education interesting, funny and informative. Caleb. I've been listening for years and enjoy the banter and cursing. It's hilarious and makes the whole process of staying compliant a bit less painful and boring.

Caleb Newquist: Thank [00:03:30] you. And then I thought I was gonna sing Dear Prudence to this prudence, but I'm not going to do that. I'm sure there's copyright risks there. But anyway, thanks, prudence G for the review. Thanks for listening. Uh, glad you're getting some CPE knocked out with us. You could definitely be doing, you know, courses or podcasts with no humor and a bunch of pain and a bunch of boredom. So. Yeah. Thanks for listening. Tell your friends. Okay. [00:04:00] Thanks to everybody who writes reviews and emails. I read all of them. Please. Uh, review. Please rate the show on Apple, Spotify, or wherever. Youtube as we just talked about. And if you go to writing something, maybe I'll read it on the show on a future show. Okay, might is the operative word though. Might. Okay. Also, if your firm or company or conference or event or whatever it is you got [00:04:30] going on and you need a presentation on fraud or ethics, I'd be happy to talk to you about that. So email me fraud at CPE. Com to get more information on pricing and availability. All right. That's enough business time for some fraud. Okay. Uh, before we get into the cases. I'm bringing on my producer, Zach Frank, to discuss this topic a [00:05:00] bit. Welcome, Zach.

Zach: How's it going, everyone?

Caleb Newquist: Okay. Um, so this is a this is an episode about rewards points. Loyalty points. Is that a thing that you've ever been into in your life?

Zach: Into is definitely a stretch. But of course I, like everyone else, have had multiple companies, multiple establishments. Give me them. So, you know, my email is filled with them.

Caleb Newquist: Yeah. Like do you have a do you ever do you like, [00:05:30] fly a particular airline for example, like when you travel, do you try to stick to one airline or anything?

Zach: I do try to stick to Delta.

Caleb Newquist: Okay. Yeah. Delta's a big one. Greg Kite was a Delta guy. Yeah.

Zach: I do not fly enough for it to really help me as much. My brother flies all the time. He's a touring musician and he is also a Delta flier and takes takes very much advantage of all the the points that he gets from that.

Caleb Newquist: Yeah. Flies for free sometimes.

Zach: Yes. Upgrades. You know.

Caleb Newquist: Upgrades. Nice. Yeah. My wife, [00:06:00] um, my wife traveled not a lot for work, but frequently, like 20% of the time. For a while at her previous job. And we were southwest. My my wife loves southwest. And so she's kind of she's kind of a loyalty hound like that. She I don't know, there's certain things, like she likes southwest, she likes Nordstrom, she likes Costco, she likes I don't know. And so but but southwest is one of them. But what else. What about credit cards. [00:06:30] Do you have a favorite credit card?

Zach: You know, I actually have been using a lot uh, my credit card, you know, getting some. Oh, because I ordered enough from Amazon that I'm getting enough back. I think you get 5% back every time you use it, so.

Caleb Newquist: Okay. Yeah.

Zach: Order a lot from Amazon. Get 5% back on everything from that. Um, yeah. As a point. That's a nice one.

Caleb Newquist: Yeah. I think if I had a favorite like we have a Costco one and it sucks, to be honest. Sorry, Costco. They're just it just like the the cash back. The rewards back isn't that good. I [00:07:00] think the best one we have is like a Capital One venture, and that's pretty good. It's like, I don't know, two two points for every dollar purchased. And like there's no limits on anything. But yeah, I don't know, like I know people who buy everything on credit cards and like pay it and just try to pay off the balance every month. And so they just rack up these points.

Zach: Yeah.

Caleb Newquist: And then I'm trying to think of what's the other weird thing that people do that I've heard about. Oh, what I was gonna have you ever heard of these [00:07:30] stories where people like, they'll use, like, point systems. They'll use reward systems. Like from a credit card, like a cash back, a cash back, especially the cash back ones, the cashback ones, they use those and people, they they've they've closed all the loopholes or they've closed a lot of them where you use the cash back to buy like gift cards and shit and they. Yeah, they basically rack up points buying gift cards, and then they use the gift card and they it's it's not quite money laundering because. [00:08:00]

Zach: It's legal money laundering.

Caleb Newquist: It's legal money laundering. It's pretty it's pretty wild how uh, and and I think it's mostly I think I mostly know about it because there's like tax consequences where there's been like, people have gotten dragged into tax court. It's like, well, this is this is you're earning, you're earning, you're somehow earning money on this cash back stuff. And they technically weren't. And like, I don't know, it's I don't have any, you know, solid examples.

Zach: But I know there's also.

Caleb Newquist: It's pretty funny.

Zach: There's whole industries with like the [00:08:30] experts who will get you the best discount and the best like deals or the best points on this, like, oh yeah, whole industries of that.

Caleb Newquist: Yes. Yeah. I'm gonna I'm gonna mention it in, uh, yeah. Our stories. So anyway, well, uh, we're gonna let Zack go and we'll get into the episode, uh, which has on today's episode. We have a number of different of short cases on reward and loyalty frauds, so let's get into them. Story [00:09:00] number one frequent fraudster miles. When did frequent flier miles become a thing? Accounts kind of differ based on the research I did. For example, United Airlines started tracking its customers in the 1950s, but it didn't formalize a frequent flier program until 1972, when it was created with help from Western Direct Marketing. This [00:09:30] is according to a Wikipedia page on frequent flier programs, and apparently this United program. It gave its frequent fliers, plaques and promotion materials, which I think is corporate speak for swag. And so I guess that's something I don't know if there's anyone listening who has been a frequent flier of United for the last 60 years. And you have [00:10:00] your plaque. Uh, send me a picture because I would love to see it or some promotional materials. Anyway, uh, the actual first airline to track its customers mileage was Texas International Airlines. And it gave them rewards based on those miles. It flew the the their their members flew. And this was in 1979. Texas International eventually became part of Continental Airlines, which eventually merged with United in 1980. [00:10:30] Western Airlines created what they called a travel bank.

Caleb Newquist: And this later became part of Delta's frequent flier program when those two companies merged in 1987. But then there was, according to Travel Insider, really, most people go back. People. I think American gets credit. It generally gets credit for its advantage. Program as kind of the first modern, frequent flier program. United, they have one called [00:11:00] Mileage Plus that came a little bit later in the 80s. And then several others. They kind of all cropped up in the early 80s, pretty close to each other. These days, frequent flier airline miles, uh, it's kind of something people, certain types of people anyway, they tend to kind of brag about or obsess over. And I get it. It's understandable. Flying is expensive. And so when you fly for free, that feels good. You know, it's pretty great. [00:11:30] You know, flying to wherever for free, especially if it's someplace fun. You know, if you're flying to Cancun for free, that's that's cool. If you're flying to, you know, I don't know, Salt Lake City. No offense, Greg, but if you're flying to Salt Lake City and it's not ski season. I don't know. Sure. Okay. Whatever. Anyway. And you can use, you know, these miles for all kinds of things. You know, mostly travel stuff, right? You can use them on hotels, rental cars, stuff like that. So [00:12:00] pretty useful, right? And so if you can pile them up, then yeah, it's fun to use them. And personally speaking I think I mentioned it I'm a Southwest Rapid Rewards member and I don't obsess really.

Caleb Newquist: But they put your points like right in the app as I'm sure some of you are aware. And so I'm aware of the number of points I have, but I don't really think about it too much. Um, and it's nice when we can use them, [00:12:30] but whatever. Anyway, you will. All of you. Most of you, I should say, most of you know all this. Some of you probably fly a lot and are one of these people who kind of like hoarding the points, you know, and like using them. So more power to you. And since lots of people like these programs, uh, these frequent flier programs have gotten really big. So, for example, American, which you mentioned, uh, American reportedly [00:13:00] generates about $6.5 billion. Well, it it did generate $6.5 billion from its advantage program in just 2023. Uh, so that's, you know, a lot of money. Um, and an article that I found in the Australian Financial Review cited a study from on point loyalty. That's a consulting firm that focuses on airline loyalty. Yes, that's a thing. Um, they reported that the big three US airlines, [00:13:30] United American and Delta, their loyalty programs were worth a combined $73.8 billion in 2023. So that's extremely valuable. And that's almost more valuable than the airlines themselves, which is kind of funny to think about. And you might be wondering like, well, how do they how do they make money from these? Well, one of the easiest ways that they make money from them is they sell miles to credit card partners at [00:14:00] huge margins.

Caleb Newquist: Right. And I wasn't able to find any exact date around this. But they, you know, the the airlines themselves kind of they pay very little. They pay like half a cent per mile to produce them apparently. And then they can turn around and sell them for like 2 to $0.03 each. And that's like just massive, massive margins. Right. And they're just I think what's the the hilarious thing is that these aren't tangible. They're just made up. They're just digital assets that are created [00:14:30] out of thin air. And that's pretty hilarious to me. I don't know. Anyway, uh, however, it's not all upside, right? If you will indulge a little bit of accounting, uh, an accounting nerd detour, we'll call it. But they're not just marketing programs, right? Uh, and they don't they aren't just like, you know, these these digital assets that they can just sell. Uh, they're also liabilities, [00:15:00] right? So, you know, the way revenue recognition works is that each one of these points represents a promise to deliver on some future service, right? Um, and so in the airline's case, you know, they have all these unredeemed points out there and it's deferred revenue, because if people cash them, they have to give them, you know, they said they would give them the free flights or whatever.

Caleb Newquist: So that's that's that's a liability. Right? That's something that they owe. And [00:15:30] if a fraudster, for example, manages to steal those points, that doesn't get rid of the liability, the liability still exists and they still have to make good on it. If if that fraudster like books a flight with those points, they'll probably honor it. But they actually did so under false pretenses. So the customer whose miles they actually were is probably going to try to get them back. So [00:16:00] in some ways there's kind of this risk that they could really be, you know, bleed out a lot of money. Like if they had these, like if there was a big, you know, uh, hack of some kind and lots of miles disappeared, would they be able to cancel them but still honor like in all those customers are going to want their miles back. So are they going to honor all that, but then somehow cancel all the miles that got stolen? I don't know. I mean, that could get [00:16:30] real messy real fast. Um, speaking of the unredeemed miles, how much is out there is kind of unclear, but that same Financial Review article cited a McKinsey estimate that claimed there were 30 trillion unredeemed air miles in passenger accounts. 30 trillion? Uh, that is almost enough for every airline passenger in the world to take a free one [00:17:00] way flight.

Caleb Newquist: So that's a lot of unredeemed miles. And like I said, if you're if you're a savvy, kind of opportunistic fraudster, uh, there's a lot to like here. I think, you know, there's this giant pile of valuable assets just sitting around kind of gathering digital dust. Not to mention, well, we are mentioning now that the security around these assets is kind of not good, especially when you compare [00:17:30] it to, uh, you know, the measures that are taken to protect our old fashioned assets, like money in the bank or real estate or investments, business interests, stuff like that. The security around that stuff is usually quite good, in some cases not so good in other cases, but it's pretty robust when it comes to assets. People want to protect their assets as best they can, but you know, for rewards miles, not so much. So why try stealing money? If you're a fraudster? Why would you steal [00:18:00] money when you can steal airline miles or and then use them, or cash them in or use them some way. And then the airlines have got to clean up the mess. Especially since when you think about the airlines and if, you know, in an ideal world, if they're thinking about security, hopefully they're thinking about the security of the giant flying aluminum tubes filled with human beings inside. I mean, I hope that's what they're thinking about. I [00:18:30] mean, recent events have kind of indicated that maybe they don't think about that stuff so much, but that's not the point.

Caleb Newquist: The point is. The point is that these miles programs are a little vulnerable. And there are many, many stories of frequent fliers being ripped off, being defrauded of their valuable, cherished miles. And so we'll just mention a few of those. First, [00:19:00] and this July July 2025, local Seattle news stations reported that multiple Alaska Airlines customers had had their accounts hacked. In some cases, their flights had been canceled and the points stolen. In other cases, the points were simply drained out of the accounts. And in just one case, in Alaska Airlines, customer lost 150,000 miles, worth approximately $1,900. Uh, in another case I found on the Alaska Airlines subreddit, [00:19:30] a user reported that they had lost over 200,000 miles. The hacker. The hacker had used their points to book hotels in Abu Dhabi. Multiple reports stated that Alaska Airlines did not require multi factor or two factor authentication when users logged into their accounts. So that's that's that's certainly not good. This is a recent story. So updates may still be trickling in. But you know if you're an Alaska [00:20:00] Airlines person maybe check your balance make sure everything's good. Another example I found was a writer for the points guy. That's a very popular blog that obsesses over all things rewards. That writer, Gabriel Bernardini shared the story of her Southwest Rapid Rewards account being hacked in December 2024.

Caleb Newquist: She writes that she found out that her account was compromised when she received an email confirming her stay at a [00:20:30] Hampton Inn and Suites in Kalamazoo, Michigan, In, except she hadn't made a reservation for the Hampton Inn and Suites in Kalamazoo, Michigan. Whoever did make that reservation had used 17,100 of her points, and that's worth about 240 bucks. Um, through a lot of persistence on the phone. Gabriel writes that she did end up getting her points back. However, she also [00:21:00] noted that in Southwest's terms and conditions for their Rapid Rewards program, they state that they are, quote, not responsible for unauthorized access to a member's account and will not replace stolen points or awards. But in her case, uh, probably because she was a journalist, but they they, they own. But they said that they only reinstated the points as a gesture of goodwill and one time exception. And just out of curiosity, I decided to dig up the [00:21:30] Rapid rewards terms and conditions. And it still says, and I'm quoting here, southwest is not responsible for unauthorized access to a member's account and will not replace stolen points. So there you have it. Um, that is still the policy. Also, Gabrielle writes, and I confirmed with my own account that Southwest Rapid Rewards does not have two factor or multifactor authentication included when people log in. She [00:22:00] also noted in the article that American and Frontier and we just mentioned Alaska.

Caleb Newquist: They don't have two factor or multi-factor authentication. So yeah, be careful with that stuff. Another case. Again, another points guy writer. This writer's name is Clint Henderson. He wrote about his experience of having his American Airlines AAdvantage account hacked, and in that case, [00:22:30] someone had gained access to his account and used hundreds of thousands of advantage miles for several car rentals. Okay, and Clint's account is a little more harrowing. You can read all about it. It's in the show notes, but he spent a lot of time calling around. He called the car rental companies, he called American Airlines, got connected to, you know, the advantage teams. There was hotels and the flights. But it gets hellishly more complicated. He talks about how, um, you know, American canceled his [00:23:00] advantage number, gave him a new one. Okay, so that's maybe not surprising, but he had to use a different email address in order to do that. That's kind of strange, but he writes that that's their policy and that's what they require people to do. So that's a hoop that you have to jump through. I don't think anyone needs more email addresses or wants one, to be honest. Um, he also talked about when the Advantage Fraud team got in contact. [00:23:30] They informed him that he had to file a police report. Yes, an actual police report. And they would not accept an email. It had to be either a PDF or a screenshot, which seems tedious and weird, but okay.

Caleb Newquist: Um, so he had to physically go into a police precinct in New York City because at the time he wrote the article, the NYPD's online filing was disabled. So he filled out a police report and then, [00:24:00] oddly, was told that he wasn't allowed to have a copy of it, which is kind of crazy. Um, fortunately, the next day he tells he writes that a detective got back to him to follow up and said that he could have a copy of it, which was then provided, which he then forwarded to American Airlines. Uh, so they could refund his miles. And for what it's worth, I. I checked NYPD's website, and and you can file police reports online, so thankfully that's [00:24:30] up and running again. Anyway, oddly, little end cap or little. Um, um, yeah. Capstone to this story. He was later contacted by Advantage Hotel. Clint, the writer, was contacted by Advantage Hotels. So that was the organization that the fraudster used to book the rental cars. And Advantage Hotels informed Clint that the rental car company that, uh, they were trying to [00:25:00] that their partner that they were trying to work with to get the miles refunded. They refused to do that. And that is also kind of weird in the article. You know, the the representative that he was working with said that they provided all the information that was requested.

Caleb Newquist: And, you know, in terms of they, you know, as Clint is jumping through hoops trying to get his miles back Advantage Hotels had to jump through [00:25:30] hoops with the car rental company to see if they would refund them. And it sounds like they did all that, but then they said, nope, we're not going to refund it anyway. We're going to stick to the policy, which whatever it is, they're not responsible. And so that was strange too. Um, but fortunately, as I mentioned, Clint got his miles back directly from American. Uh, but, you know, it is a little shocking that sometimes a business will not just summarily make good when [00:26:00] you're a victim of fraud. That's a good thing to know. Story number two, big bucks store. You've probably heard of Sam Walton. He's the legendary business magnate who founded Walmart in 1962, which maybe you've heard has become a behemoth, a retail behemoth. Fun fact about Walmart. Uh, [00:26:30] it is the largest employer in 21 states. Yeah. So, yeah, they're they're doing fine. They're doing fine. Anyway, uh, 21 years after Sam Walton started Walmart, he started Sam's Wholesale Club in Midwest City, Oklahoma. And this was on April 7th, 1983. Midwest city, which I did not know about. Midwest city is a suburb of Oklahoma [00:27:00] City. If you're not familiar, I was not. So now we're all up to speed on that suburb of Oklahoma City. Anyway, believe it or not, the first Sam's Club opened before the first official Costco opened, which was September 15th, 1983.

Caleb Newquist: I went down a bit of a, you know, wholesale membership store, rabbit hole. Anyway, I don't know if you've noticed this or not, but people love these warehouse [00:27:30] club memberships. They love them. My wife loves them. I have a good friend who loves Costco. Uh, mostly they love Costco. But this is not about Costco. This is about Sam's Club. And I still get the sense that many people love buying a lot of stuff at big discounts. And Sam's Club definitely allows you to do that. So I don't know if the brand love for Sam's is quite to the level as it is for Costco, but it [00:28:00] still does all those Costco things, and I'm sure people really like that. Anyway, if you've never set foot in Sam's Club before and don't have any idea what I'm talking about, then all you have to do is imagine the low, low prices of a Walmart in a store with all the charm of a shipping container. Anything you want to buy from box fans to pool noodles to barrels of mayonnaise just sitting [00:28:30] on pallets in a giant warehouse. And those pallets are stacked on metal racks that are 2 to 3 stories high. Aisle after aisle after extra wide, agonizing aisle. Shopping carts. You get these shopping carts that are basically the size of Mini Coopers. Those are provided so that you can fill the back of your F-150 or your suburban easily with, you know, whatever it is that you want.

Caleb Newquist: And then you can drive over to their gas station, which [00:29:00] has its own zip code, and you can fill it with 30 gallons of unleaded gasoline that is also at a, at a, at a very, just a much better price than your average Exxon station. Okay. So you get all this and much, much more for, you know, 50 or $110 a year. That's the cost of the basic and plus memberships for Sam's Club. And in either case, [00:29:30] the amount that you save on, you know, a 98 inch screen TV that will pay for your membership, those savings, that's that savings on that giant ass TV will pay your annual membership well into your kid's being in college. So that's why people do this. Okay. And as if you know, this discount Paradise wasn't enough, Sam's Club opts all of its plus members into what's [00:30:00] known as Sam's Cash. Now, these are cash back rewards that these plus members can earn 2% of every purchase that they make at Sam's Club, and they can also use them by using Sam's Club Mastercard credit card. Uh, there are bonus and special offers, too, that allow members to earn points, and those points accumulate and can be used to make purchases at Sam's Club online or in the Sam's Club app, or in Sam's Club store.

Caleb Newquist: And you can renew [00:30:30] your membership with them, or you can even cash them out. Okay. And this makes Sam's cash valuable. Very valuable, right? The number of Sam's Club memberships isn't publicly available, but estimates I found put it in the range of about 69 million. That's a lot. And so if even one third of those were plus members, we're talking 23 million people who just earn these points. [00:31:00] And Sam's Club generated more than $86 billion in revenue for its 2024 fiscal year. So there's got to be a lot of Sam's cash floating around out there, right? So it will come as no surprise that a enterprising fraudster Stir might go after those. This past May, the Sheriff's Office of Sacramento County, California, arrested a 38 year old [00:31:30] man, Enaam Rasul. Hope I'm saying that right. Enaam Rasul, after a months long investigation, the. Folsom. Folsom. California. Folsom times reported that the story began in February when Rasul quote attempted to leave a Sacramento County Sam's Club with more than $1,000 in unpaid merchandise. I wonder how was, man, a thousand bucks of unpaid merchandise? [00:32:00] Anyone who shops at these places know that you can't. I mean, like where how? Like, do you have two carts? Like, what was he doing? Or did you just get, like, you know, two sets of tires? I don't know, like, but still, how are you going to how would how would you try to sneak out with that anyway? I don't know.

Caleb Newquist: He and mix these in with legitimate purchases. And the receipt checker, which these stores have a [00:32:30] receipt checker discovered the Unscanned stuff. But Rasool, he was just allowed to pay for them, you know. Oh, honest mistake, yada yada yada, whatever. I'm sure that's how it went or something like that. And he just had to pay for him. But the article goes on. Quote. Store personnel began monitoring his return visits. That internal review revealed a broader scheme in which [00:33:00] Rasool used other customers, Sam's Club accounts and accumulated reward balances to make unauthorized purchases. Detectives say Rasool fraudulently obtained merchandise using those stolen rewards points, and then sold the items through an online marketplace. Very, uh. Very enterprising. A little a little busy body of fraud right there. Anyway, [00:33:30] when a search warrant was executed on his house, authorities found, quote, hundreds of items valued at more than $25,000, including electronics, over-the-counter medications, pet food, hygiene products, nutritional supplements, and snack foods. Investigators also located shipping supplies, a computer and a label printer believed to be used for online sales. So there you go. Somebody being awfully clever or not very clever using [00:34:00] the Sam's Club points rewards. Story three A full tank of fraud. I do not know if you've noticed this or not, but the price of gas is something that people get worked up about. I think I first noticed this when Iraq invaded Kuwait in 1990.

Caleb Newquist: Uh, if you remember this, uh, it caused a brief spike in oil prices and therefore [00:34:30] gas prices at the time. And it was kind of short lived. I, I looked into it a little bit. That was another rabbit hole I went down was the the original Gulf War. But, um, in that case, uh, things kind of came back down to earth after an initial spike. But anyway, I also remember, uh, in college, I was in college in the late 90s. And, uh, gas prices actually dropped quite a bit. They actually kind of got quite low in the late 90s. But then things kind of exploded [00:35:00] around, you know, between 2000 and 2003. I don't know if Y2K had anything to do with it, but, you know, that was a thing. The September 11th attacks, of course, uh, and the US invasion of Afghanistan that came after that. And then, of, of course, there were the Iraq War. Um, personally, I remember on the morning of September 11th, 2001, it was my senior year of college. I was in Kearney, Nebraska. I had driven to campus for class. It [00:35:30] was a Tuesday, as I'm sure many of you remember. And I heard the news on the radio and it was didn't make any sense at the time, but I was I was listening to the radio and I was hearing the news being reported, and I got to class and my professor had the news on his projector screen, and I saw the North Tower collapse.

Caleb Newquist: And that was awful, of course. And finally, the last time I remember people freaking out about gas was in the summer of 2022. [00:36:00] So relatively recent, uh, when inflation was getting out of hand. And, you know, we weren't totally clear the pandemic at the time. And, you know, people were worked up about a lot of things, uh, particularly they were worked up about the price of things and gas prices was one of those things primarily that people were worked up about. And because the price of gasoline has long been this thing that people obsess over, or this kind of aggravating [00:36:30] necessity, many people have found ways or tried to find ways to save money when they buy it. And it has become kind of their raison d'etre, uh, if you like. So, yeah. Gas prices. Here we are. So in March 2025, the CBS Pittsburgh affiliate reported that at least 19 people in Peters Township, Pennsylvania, that's a suburb [00:37:00] of Pittsburgh, were victimized when someone hacked their giant Eagle fuel perks accounts. And they use those points, of course, to buy gas. Um, one uh, one customer said, quote, I could never imagine someone hacking a Giant Eagle Perks card. I mean, really? But this day and age, anything is possible. Yes, yes, yes it is, I [00:37:30] guess. Um. Peters Township police first learned of this fraudulent activity when a woman reported that her card was fraudulently used to redeem about 1500 points, worth about $30.

Caleb Newquist: Um, video of the gas station showed a 18 year old suspect, Paul Kostynowicz, putting his phone in front of the barcode scanner at a gas station to activate the points. Giant Eagles loss prevention team traced [00:38:00] his card back to numerous other fraudulent transactions, saying that he had been returning, quote, almost daily and using multiple different individuals. Giant Eagle Advantage cards to fraudulently purchase fuel. Now, I don't know how much gas the average 18 year old needs in this day and age, but the fact that he was going back every day is kind of weird. But that's what he was doing. And, um, if I go [00:38:30] back to this one customer that was interviewed. Quote, to all these youngsters who want to take advantage of the system. Just stop it, man. Go get a job. Be a citizen in this community. And. Sure. I mean, in this case, it was a youngster. But I don't know if all the all the people taking advantage of the system. I don't know if the majority of them are youngsters. Anyway, I think most [00:39:00] of them, most of the people taking advantage of the system do have jobs and are citizens in their community. Whatever. Not to. I don't want to dwell too much on it. I thought it was just a funny quote anyway. When he was questioned by police, Kucinich admitted to hacking about 20 accounts.

Caleb Newquist: He was looking at 58 charges, including identity theft, accessing a device issued to another who did not authorize use, and receiving stolen property. Okay, [00:39:30] so what did we learn? Uh, I think it's fair to say that very few of us think about the reward points we accumulate, whether it's airline miles or Starbucks stars or fuel points, whatever. I don't think most of us think about those points as assets, you know, at least certainly not in the way that we think about the money in our bank accounts or the balance in our retirement. We don't we don't think about them in the same spirit of those. Right. But [00:40:00] the rewards, they do have value in some cases. They have a lot of value. And if they are lost, that can be pretty devastating. Okay. Not devastating. Like your house burning down. Devastating. But, you know, it's a pretty big drag if your rewards points got stolen. Yeah. Not fun, not good. And as we've heard, getting them back. Not easy. And that's the other thing. I think lots [00:40:30] of these rewards programs do not have robust security around them. Why is that? Well, unlike assets such as money and bank accounts, these reward programs, you know, the points that we get, they they're created out of thin air. You know, they aren't legal tender. They're they're, you know, if we're being real about it, if we're being honest, they're just a marketing gimmick developed by corporations [00:41:00] that they hope will get us to spend more money with them.

Caleb Newquist: And it just so happens that they're very, very good at doing that. And so the security around these things, it's not really their highest priority because it's the customer satisfaction and repeat business that is the priority. Those are the primary goals of these of these, uh, of these reward points programs, you know, um, for a bank, if a bank can't keep [00:41:30] your money safe, then you're not going to bank at that bank, right? You're just not. So security is extremely important. But if you're accumulating American Airlines advantage points, I mean, they just want you to fly more and fly more and fly more and fly more, right? They don't they're not necessarily concerned about the security of that of those miles that you get. And, you know, the actual number of victims of this type of fraud are pretty small. The size [00:42:00] of rewards program fraud is only like 1 billion to $3 billion. But these programs are virtually everywhere. Virtually every retail business has them. Virtually every travel and hospitality business has them. And so, you know, they're they're they're so widespread at this point that there's just a lot of vulnerability. Right. Lots of risk. So what can you do to protect yourself and [00:42:30] your highly curated batch of weird digital assets? Um, number one, change your change your password.

Caleb Newquist: Um, now, I know, I know, it's okay to admit it, but many of you are using the same password for many different accounts. And, you know, for a rewards program that it has to be one of those, right? You're not saving your password for, you know, your [00:43:00] your your Kroger fuel points. I'm sure you know, and we all do it. It's fine. You know, you'd have to be a cerebral freak to generate a different password for virtually every account you have, right? It's not realistic, but in any case, maybe around your rewards points, that's maybe some vulnerable ones. So, yeah, maybe do that anyway. Also, uh, use two factor or multi-factor authentication. This is old hat by now, but [00:43:30] geez, just turn it on, you know? Is it tedious? Yes. Does it save your bacon? Like 99.9% of the time? Also, yes. Okay. Uh, three. Consider a password manager. These are very useful. They are not foolproof. All the big ones that you've heard of have been hacked. Um, but the usefulness of them being able to manage dozens of accounts, uh, and being able to assign good passwords [00:44:00] to them vastly outweighs the risks. Uh, associated with, you know, those big password managers being hacked? Fair. Fair. All right. And also, keep your eye on your accounts. That's a good thing to do. You know, it's not like you're checking your bank balance every day, but, you know, check them out once in a while, you know, just make sure nothing weird is going on.

Caleb Newquist: And, um, I don't know, this is a shameless plug, but tell your friends about this podcast. [00:44:30] You know, uh, just awareness of these things is important. So, yeah, just talking about it with people, you know, uh, that this is a thing that happens that you heard about and you listened to and then. Oh, you should listen to this. Yeah. Shameless plug. Yes. Helpful. Arguably. So. Okay. All right. That's it for this episode. And remember that violations of your privacy [00:45:00] are taken very seriously. And security is everyone's top priority. But really, what it comes down to are the terms and conditions and the terms and conditions of corporate partners who may choose to enforce their policies, despite all the evidence that you were ripped off. If you have questions, comments or suggestions for stories, drop me a line at Omi fraud at CPE. Com or hit me up on LinkedIn. Oh my fraud is created, written, produced and hosted by me, Caleb Newquist Zach [00:45:30] Frank, who had a little guest appearance today. He's my co-producer, audio engineer, music supervisor Laura Hobbs designed our logo. Rate. Review and subscribe to the show wherever you listen to podcasts. If you listen, on your mark, get some CPE there. Join us next time for more avarice, swindlers and scams from stories that will make you say oh my fraud!