DOT Looking at Deceptive Practices in Airline Frequent Flyer Programs
The U.S. Transportation Department (DOT) want to look into frequent flyer programs for potential deceptive or unfair practices, as reported by Reuters.
The latest move is part of an overall trend of more oversight of the airline industry. Just recently DOT levied a record fine on Southwest Airlines.
The DOT has reportedly held meetings in recent weeks with passenger airlines to discuss the popular loyalty programs of domestic airlines. Some of the issues involve transparency of award tickets, transferability of miles and notice given before making changes.
“We plan to carefully review complaints regarding loyalty programs and exercise our authority to investigate airlines for unfair and deceptive practices that hurt travelers as warranted,” a department spokesperson told Reuters. “DOT officials are actively meeting with U.S. airlines and gathering more information on this issue.”
Another key issues is the devaluation of frequent flyer miles over time that makes it harder to book award tickets, a separate source told Reuters.
The issue of frequent flyer programs has also come up in congress recently with Senate Judiciary Committee chair Dick Durbin and Senator Roger Marshal asking the Transportation Department and Consumer Financial Protection Bureau about “troubling reports” of unfair and deceptive practices in airlines’ frequent flyer and loyalty programs.
They say that airlines are “changing point systems in ways that are unfair to consumers, including by devaluing points, meaning it takes more points than initially marketed to achieve the promised rewards.”
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Award availability on the airline itself to its own members.
Award availability on the airline itself to its (purported) partner airlines.
Award availability using an airline’s points on its (purported) partner airlines.
Funneling awards through specific partners and not others, even when availability exists on all.
Award pricing. Higher prices on non-competitive routes.
DOT investigating ff program deception? I hope they have a lot of time because there’s a whole lot to unpack.