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Why the Lloyds Avios Amex fraud happened (probably)

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As a follow-up to my recent articles on the major fraud in the US on Lloyds Avios Rewards American Express cards, I was contacted last week by a reader who works in the credit card industry on the fraud side who explained how he believed it had happened.

You may remember that Lloyds Bank claimed to be the innocent party in all this.  The line given to the media, including me, was that there had been a data breach somewhere on the American Express side.

This had a funny smell to it, as I said to all of the journalists who contacted me.  The fraudsters had made fully working American Express credit cards.  I found it unlikely, to put it mildly, that you could make a fully working plastic Amex card just from knowing the card number.

The reader thought that Lloyds Bank does not appear to have implemented two important security features on its credit cards. 

Firstly, he believes that the Lloyds Bank / Amex processing system does not verify most of the key card information, including the expiry date, before transactions are approved.  The net result of this is that you only need the credit card number in order to manufacture a fake Lloyds Bank American Express credit card.  As the first six digits of Lloyds Bank American Express cards appear to be the same for all cards, it is easier to churn through various permutations to find working numbers even if there was no data breach.

In addition, the reader believes that Lloyds does not appear to match the data from the card terminal (which tells Lloyds whether a transaction is chip, swipe or a contactless tap) with the security data used for verification.  If this was right, it would mean that it would accept the lower level of verification required for contactless transactions – and this is low level verification because contactless fraud is virtually impossible – even when the transaction was not contactless.  It is apparently possible to overwrite the magnetic strip on a real credit card (issuer and card number immaterial) with the lower level of data required to validate a contactless transaction which would be charged to a Lloyds Avios Amex account.

I should stress that we don’t know if any of the above is actually true, but the hypothesis does appear to fit the known facts in this case.

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Comments (106)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • John says:

    If you’re in a position to make use of the AC lounge access that it would actually be worth considering spending £450 for it, then you should easily gain Star Gold status by spending less than £450 on mileage runs or to upgrade your existing flights.

  • Will Jones says:

    Semi related to the Lloyd’s Avios card. My wife signed up to this card about 6 months ago, didn’t have an avios account before so was created around the time of signing up to the card. Ever since she gets “New Joiner welcome bonus” of 50 avios at least 3 times a month sometimes 4. This hasn’t stopped so far for 6 months. I assume it’s a glitch.
    Not complaining as it’s free avios just wondering whether anyone else has experienced this oddity?

    • Jon says:

      I received these 50 pointers for a while, and then had them all reversed in one go without warning.

  • Barry cutters says:

    Are airlines free to make their own rules for lounge access. It seems surprising that an airline can suddenly decide to start charging for this as other *A airlines will be footing the bill…..or is the individual airline invoiced for someone with their status entering a partners lounge ??? Eg if I as a Ba gold enter a cathey or Qatar lounge – is Ba charged for this ?

    • Nick says:

      If you’re entering a lounge only by use of a shiny card then yes, the issuer of that card has to pay whoever owns the lounge for the privilege.

      So all your visits to the CX F lounge in T3 will be costing BA rather a lot of money!

      They pay per entry too, so lounge-hopping racks up a large bill very quickly…

      • Nick says:

        I imagine AC are hoping the number of people doing this outside Canada is fairly small. Doubt they’ve reckoned on the power of FT though! It’ll be popular with anyone who flies regularly from IST, for example, given the relatively poor standard of non-TK lounges there.

      • Barry cutters says:

        I don’t lounge hop. -just go straight to Cathay lounge when in t3 , have only been in t5 over the last 2 months so haven’t had a chance to try the new Qantas lounge yet. I’m off on a ski trip to whistler in middle of Jan so will make sure to try it then before flying to Vancouver. If it’s anything like the lax lounge I think It might become my new t3 lounge of choice.

      • Barry cutters says:

        At £2500 a year you would be much better to use that to upgrade to business and get lounge inc in your ticket . Depending how much you fly of course

        • TGLoyalty says:

          Or buy a Qatar sale fare have a nice break and hit silver

        • Lumma says:

          You can buy just 1 month of status though. Could be useful if someone had a huge month of oneworld travelling

  • Jovanna says:

    I can access any Star Alliance lounge with this..?!

    I think I’ve missed something.

    • Rob says:

      …. when flying Star Alliance.

      • jovanna says:

        So the United lounge at Heathrow are not going to point me in the direction of AC, when flying Y with, say, Lufthansa? Aegean are not going to turn me away at Thessaloniki when flying Turkish?

        • Rob says:

          The list of applicable lounges is on the Maple Leaf Club site. At Heathrow I think you only get AC because they clearly don’t want to pay United (but check, not on a computer at present).

  • Gill says:

    Unexpected hit a 2nd BA 2 4 1. Is there any restrictions on return destination? We have a Lloyd’s upgrade return flight from HKG and I’m wondering if I could use the voucher to cover a stop over on our way there. Unlikely to be open jaw – just in to somewhere in Asia and then out from the same location onto HKG.

    • Genghis says:

      I’m not sure exactly what you’re trying to do but “All Companion Voucher bookings must originate and return to the UK” and “Avios and Companion Vouchers can only be used on British Airways mainline flights, where ‘BA’ is specified at the beginning of the flight number (e.g. BA1324). This includes CityfFlyer where flight numbers begin ‘BA’.”

      • Gill says:

        Thanks Genghis. I somehow missed the return to UK condition. Will continue the hunt for a good one way or multi stop fare heading in that direction.

  • Kinkell says:

    OT. Award wallet just alerted me to 4200 SAA voyager miles about to expire. Anyone know what I can do with them…..luggage tag perhaps?! Didn’t find a shopping catalogue on their site and I seemingly don’t have enough miles to donate to one of their worthy causes! ( min 6k) .

  • Tom says:

    OT – Ordered a wine from Laithwaites (via BA Executive Club December deal 1000 avios for the first order) several weeks ago, how long does it take to receive avios?

    • the real harry1 says:

      a few weeks

      very flaky their end so worth a phone call now

      • Tom says:

        Thank you, wasn’t sure whether to wait any longer, I’ll get in touch with them soon!

        • the real harry1 says:

          they are excellent at putting you right, though

          plus you might feel inclined to ask the gel who answers the phone out on a date 🙂

          they’re all a bit pleasant

  • RK says:


    On a Hilton mattress run, I can’t remember do you need to be present, i.e. turn up to the hotel to get the stay and points credited?

    I know on IHG you do, but cannot remember for Hilton

    Thanks in Advance

    • Rob says:

      Yes you do.

    • TGLoyalty says:

      and never checkout just leave the key in the room and leave.

      • Rob says:

        I had a reader yesterday who had just done an IHG mattress run to get the last 800 points for Spire – checked in and immediately checked out at the front desk. I told him that this was not clever and there is a chance he won’t get the points.

        • Waribai says:

          That happened to me a couple of years ago at Holiday Inn Express T5. Rather foolishly, I was pushed for time. So after checking in, I didn’t even go to the room. Inevitably the points didn’t post and my accelerate promotion wasn’t credited. However, I got on to IHGcare and told them that I had stayed but unfortunately the points hadn’t posted. They took care of the points and my accelerate promotion was also credited.

    • John says:

      You need to be physically present for all hotels if you want to earn points and stay credit.

      The exception may be at Hiltons which use digital key, when you can spend the entire stay without interacting with any staff at all, but I don’t know whether the hotels might audit that the digital key was never used.

      • AlanC says:

        Nearly 40 Hilton stays this year and yet to use digital key. I did notice a couple bypassing check in last night and using digital key. I was picking up my free drink and breakfast coupons at the time – how does digital key work in this situation?

      • signol says:

        We had a Novotel booking about 2 years ago that we no-showed at (change of travel plans). Stay and points credited correctly to Club Accor.

    • Brasov says:

      I fear it is too late to ask this question as any check in today will count as a 2018 stay

      • Rob says:

        No, it usually goes by check in.

        • LB says:

          Unless it involves the latest Club Carlson promo. I lost out because the terms stated that checkout should occur before the end of the promo, not check in.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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