Loyalty rewards betrayal
Bad news for consumers - one of Australia's largest loyalty programs may be on the brink of collapse and could leave 700,000 Australians and some of the nations biggest companies including Myer, iselect, Hoyts and GE Money, in the lurch. A scale of betrayal echoing the collapse of Ansett and their frequent flyer program in 2001.
The Lifestyle Rewards program is currently facing insolvency proceedings over an inability to pay a debt of $536,000 to the Australian Taxation Office.
Company director Edward Malkoun is also under financial pressure with mounting debts. According to The Age, Mr Malkoun is also being personally pursued by the ATO after running up $1.87 million in income tax bills dating as far back as 2007. While other creditors have accused him of passing a bad cheque for $109,500. It is yet to be decided what will become of Mr Malkoun's mansion in Mount Martha, purchased for $4.36 million in 2011.
The company Lifestyle Rewards promotes itself as a "leading provider" of loyalty cards. Cardholders who shop with certain retailers earn points that can be spent on rewards from companies including Myer, Hoyst, Coles, Woolworths, JB HI-FI, iSelect and Medibank Private.
The State Revenue Office has joined the Australian Taxation Office in a petition to wind up the company. The insolvency proceeding, due to be heard in the Supreme Court of Victoria early this month could potentially affect more than 700,000 members who are eligible to claim points on more than 10,000 different rewards products.
Consumers looking to switch from Lifestyle Rewards to a more reliable and actually rewarding rewards card product can compare rewards cards programs based on usage scenario, here.