Just as Texas Attorney General Ken Paxton accused the travel company Booking HoldingsBKNGof “misleading” customers by omitting hidden fees from the total hotel price in August 2022, two US senators are now pursuing what they call “unfair and deceptive practices in airline loyalty and frequent flyer programs.”
Despite belonging to opposing political parties, US Senate Majority Leader Dick Durbin (D-Ill.) and Senator Roger Marshall (R-Kansas) have joined forces to call on the Department of Transportation (DOT) to now the Consumer Financial Protection Bureau (CFPB) More information about the frequent flyer and loyalty programs proposed to customers by the country’s main airlines.
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“There are disturbing reports that airlines are engaging in unfair, abusive, and deceptive practices regarding these loyalty programs,” Durbin and Marshall write in the letter to government agencies. “For example, reports have suggested that airlines are changing points systems in ways that are unfair to consumers, including by devaluing points, meaning that more points than initially marketed are needed to achieve the promised rewards.”
Letter to DOT and CFPB raises serious concerns
Without naming any individual airlines, the senators expressed concern about behavior that includes luring customers with offers and promises of rewards and then changing conditions at will, as well as encouraging customers to spend more only to make it more difficult to obtain the promised rewards. .
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“These programs incentivize consumers to purchase goods and services, obtain credit cards, and spend with those cards in exchange for promised rewards, all while maintaining the power to strip consumers of those rewards at any time,” write Durbin and Marshall in the letter. addressed to DOT and CFBP Chairmen Pete Buttigieg and Rohit Chopra.
All of this comes at a time of general upheaval in the world of airline loyalty programs. In September 2023, Delta Air Linesgive it attempted to cut costs by changing its loyalty program in a way that would have limited visits to airport lounges to 10 per year and required travelers to spend more to earn the status that would allow them access in the first place.
Amid an outcry from passengers who felt they had been giving their loyalty to the airline only to have the rug pulled out from under them, JetBlue AirwaysBLUEAlaska AirlinesALKand southwest airlinesLUVeveryone launched withoffers toequal or even exceed the status that frequent travelers had with Delta.
This is the mess that’s been going on with airline loyalty programs in recent months
At a Rotary Club of Atlanta meeting on Sept. 25, Delta CEO Ed Bastian said the airline “probably went too far” in pushing for the changes. A month later, Delta committed to reducing the amounts needed to reach the different status levels, but despite marketing how it is “reducing” the amount customers will have to spend, it is only reducing them to a lower amount. Despite promising to increase the number of visits to lounges, Delta also remains firm in its decision to introduce them.
Durbin and Marshall’s letter also draws attention to how “the cost of purchasing points directly can sometimes be three times the value of the points at the time of redemption.”
“This disparity between the value of points at the time of purchase and redemption can be even more extreme, depending on when, how many, and even where on the website points are purchased,” the letter reads.
