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DOT and CFPB Take Aim at Airline and Credit Card Rewards

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DOT and CFPB Take Aim at Airline and Credit Card Rewards

The Department of Transportation (DOT) and the Consumer Financial Protection Bureau (CFPB) want loyalty programs to be more transparent with customers, and aim to add new rules to force them to do so.

The two agencies are investigating whether airline and credit card programs are engaging in bait-and-switch tactics. They are looking at the fairness, transparency and predictability of airline credit card rewards programs to ensure consumers are receiving what they were promised.

Frequent flyer programs have evolved from just an additional perk for loyal customers into a multibillion-dollar market and a major asset for airlines and credit card companies. These programs launched soon after the Airline Deregulation Act (ADA) of 1978.

CFPB says the goal is to protect people’s points from being devalued, to stop bait-and-switch tactics that prevent consumers from being able to tap the rewards they signed up for and to level the playing field between large and small airlines and banks.

“Credit card companies promise upfront benefits for signing up and using their rewards card, but often bury complex terms in the fine print for using the rewards,” said CFPB Director Rohit Chopra. “The CFPB will be looking for ways to protect people’s points, stop bait-and-switch scams, and promote a fair and competitive market for credit card rewards.”

The two agencies held a hearing last week. Participants included Allegiant Air Chief Marketing Officer Scott DeAngelo, Apple Federal Credit Union CEO Andrew Grimm, Association of Flight Attendants International President Sara Nelson, Breeze Airways Chief Commercial Officer Lukas Johnson, OneUnited Bank General Counsel Robert Patrick Cooper and Spirit Airlines Chief Commercial Officer Matthew H. Klein.

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Based in NYC. Points/miles enthusiast for years and actively writing about it for the last 6+ years at Danny the Deal Guru. I'm always looking out for deals. Making a few bucks is always nice, but the traveling is by far the best part of this business.

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  1. It’s like they picked the weirdest mix of small time right wingers and intentionally avoided any major airline or bank ceo. Exactly what does an idiot like Nelson have to contribute? More of her drivel about how FA’s should not be providing service? Why not question Robert Isom instead.

  2. Be careful on the transparency take.

    All an airline has to do is say that they’ll no longer provide award seats based on award chart and say that points needed will be basically determined by the cash price.

    This would just make award redemptions like Southwest and JetBlue.

    That said, many airlines are trying to get their points down to a $0.01/mile already, so it doesn’t seem to far from reality already (looking at you, Delta).

  3. So what did they do? Invite the worst points and miles programs and the most liberal industry people they could find, weird.


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