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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Want to earn more points from credit cards? – April 2025 update
If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.
In 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
Barclaycard Avios Plus Mastercard
Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review
Barclaycard Avios Mastercard
Get 5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review
You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.
SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on the ‘free for a year’ American Express Preferred Rewards Gold card is increased from 20,000 Membership Rewards points to 30,000 points. Points convert 1:1 into Avios (30,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.
SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on American Express Platinum is increased from 50,000 Membership Rewards points to a huge 80,000 points. Points convert 1:1 into Avios (80,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.
American Express Preferred Rewards Gold
Your best beginner’s card – 30,000 points, FREE for a year & four airport lounge passes Read our full review
British Airways American Express Premium Plus
30,000 Avios and the famous annual 2-4-1 voucher Read our full review
The Platinum Card from American Express
80,000 bonus points and great travel benefits – for a large fee Read our full review
Virgin Atlantic Reward+ Mastercard
18,000 bonus points and 1.5 points for every £1 you spend Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these offers:
American Express Business Platinum
50,000 points when you sign-up and an annual £200 Amex Travel credit Read our full review
American Express Business Gold
20,000 points sign-up bonus and FREE for a year Read our full review
Capital on Tap Pro Visa
10,500 points (=10,500 Avios) plus good benefits Read our full review
Capital on Tap Visa
NO annual fee, NO FX fees and points worth 1 Avios per £1 Read our full review
British Airways American Express Accelerating Business
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
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