The Department of Transportation is investigating the possibility of deceptive practices in airline loyalty programs. According to the agency’s spokesperson on Friday, the DOT is looking “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 DOT’s spokesperson said that they are actively meeting with US airlines to gather more facts regarding the airline loyalty programs.
Deceitful Marketing Tactics?
Why did the department suddenly take a closer look at the airline loyalty programs? This is because two US senators asked the DOT and the Consumer Financial Protection Bureau to scrutinize the “deceitful marketing tactics” in these programs.
US Senators Dick Durbin and Roger Marshall sent a letter to Secretary of Transportation Pete Buttigieg and CFPB Director Rohit Chopra in late October suggesting that airlines are changing the points systems on these airline loyalty programs.
According to the letter, airlines have unilateral contracts that allow them to make changes to the points programs without notifying the consumers about the changes.
The senators cited 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.”
Airline Loyalty Program
Both Delta Air Lines and United Airlines declined to issue statements on the matter. However, these loyalty programs are designed to get consumers to become repeat customers.
For Delta that has more than 100 million frequent flyer members in 2020, it recorded an 8.5 million jump in members last year. In October, Delta revised its frequent flyer program after some members raised their concerns regarding their rewards program.
This year, major airlines lobbied Congress to reject a bill co-sponsored by both Durbin and Marshall. The bill would’ve given consumers frequent flyer miles for transactions made via their rewards credit cards. According to Durbin, the bill would prevent the “outrageous” fees from Mastercard and Visa.
