Airline rewards programs called ‘deceitful’; feds open investigation
The Department of Transportation is investigating possible deceptive practices in airline loyalty programs after federal lawmakers raised concerns about how companies are calculating points and rewards.
A DOT spokesperson said Friday in a statement that the agency is planning “to carefully review complaints regarding loyalty programs and exercise our authority to investigate airlines for unfair and deceptive practices that hurt travelers as warranted.”
The spokesperson said agency officials are actively meeting with U.S. airlines and gathering more information about the issue.
Airlines for America, which represents the largest U.S. carriers, declined to comment.
The department is stepping up its scrutiny after two U.S. senators asked the agency and the Consumer Financial Protection Bureau about the steps they’re taking to protect consumers from “deceitful marketing tactics” in frequent flyer programs.
In a letter sent to Secretary of Transportation Pete Buttigieg and CFPB Director Rohit Chopra in late October, U.S. Sens. Dick Durbin and Roger Marshall pointed to reports that suggest airlines are changing points systems — and even devaluing points — to make it harder to achieve rewards. The letter said this can stem from unilateral contracts that allow airlines to make changes to their points programs without directly notifying consumers.
Airlines design loyalty programs to keep their most lucrative customers coming back.
In October, Southwest Airlines lowered the requirement for the top levels of its frequent-flyer program to lure in travelers dissatisfied with other airlines that are making it harder to reach elite status.