Starbucks, the popular national coffee chain that is at the forefront of mobile payments, is denying various media reports that its mobile app has been hacked, with cyberthieves reportedly siphoning money from customers rewards accounts.
A headline on CNNMoney puts it this way: “Hackers are draining bank accounts via the Starbucks app.”
The reports say thieves are stealing hundreds of dollars at a time from Starbucks customers’ credit cards, bank and PayPal accounts that are linked to the mobile app.
Starbucks Wednesday contradicted these media reports, some of which are full of personal testimonials from customers.
“Starbucks takes the obligation to protect customers’ information seriously,” the company said in a statement. “News reports that the Starbucks mobile app has been hacked are false.”
The company adds that “occasionally, Starbucks receives reports from customers of unauthorized activity on their online account.” Starbucks blames these incidents mainly on customers’ actions, primarily the reuse of “names and passwords from other sites and attempt to apply that information to Starbucks.”
The company said that “customers are encouraged to use different user names and passwords for different sites, especially those that keep financial information.”
Nonetheless, the alleged hacks on the Starbucks mobile app was first reported by consumer journalist/advocate Bob Sullivan.
Here is Sullivan’s account: “Criminals are using Starbucks accounts to access consumers’ linked credit cards. Taking advantage of the Starbucks auto-reload function, they can steal hundreds of dollars in a matter of minutes. Because the crime is so simple, can escalate quickly, and the consumer protections controlling the transaction are unclear, I recommend all Starbucks consumers immediately disable auto-reload on the Starbucks mobile payments and gift cards.”
Starbucks’ mobile payment service is considered a success in the young mobile payments industry, with about a 16 percent share of all purchases at Starbucks locations, the company’s CEO Howard Schulz told investors in January. The app helps generate customer loyalty and reduces the interchange transaction charges, or “swipe fees”, it would pay credit and debit card issuers.
Read Starbucks’ full statement here.