When Frequent Flyer Fraud Units Go Off the Rails

I’ve written before about how to deal with the ‘worst case scenario’ of having your frequent flyer account locked for suspected fraud.

There are times, though, that even I’m vexed.

Airlines and hotel programs see ‘loyalty program fraud’ as a bigger issue than ever before — whether it’s simply breaking the rules of a program by selling miles, or large scale account hacking (as has recently happened with some programs).

There’s a balance that programs need to strike. They want to enforce their rules, and they need to limit unnecessary costs. But they don’t want to swing the pendulum too far in the direction of enforcement where they make legitimate members jump through too many hoops. That would undermine their business objectives. Members frustrated by their programs aren’t going to participate in the programs, at least to the extent they would if they had a more seamless experience.

I’m working with an award booking service client now that’s run into a program which seems to have struck the wrong balance: Air France’s Flying Blue.

Flying Blue informed them that their award booking to Europe had been cancelled and their account suspended. They had their miles confiscated.

They were accused of purchasing miles from a broker.

Now, I know with 100% certainty that they didn’t.

  • Their Flying Blue account has zero miles in it when we started looking for seats.
  • When the award was found, they transferred American Express points in to cover the cost.

Now, to be clear I do not broker miles. And I don’t recommend mileage brokers. I get that request quite frequently — people who don’t have the miles for an award but would love to buy miles from or through me, or who wonder if I can direct them to a seller. I tell them outright no.

I suspect that airlines have mixed feelings about award booking services. On the one hand we help make their members happy, but on the other we drive up their cost by delivering more successful redemptions. They tolerate me though, because we follow the rules. (We have ways, even, of working through restrictions on who has access to member account data and who may speak on behalf of a member.)

And I deal regularly with executives of these programs as I put together the Freddie Awards — from conversations about the ballot in the fall through to the ceremony at the end of April, until those start back again the next year.

This client had their own American Express points, opened an Air France account in their own name, and then they transferred their Membership Rewards points to Flying Blue. The awards were booked for travel in their own name.

What’s especially strange here is that it is no longer possible to broker American Express points (without adding the person you want to give your points to as an authorized user on your card account). American Express stopped allowing transfers of their points to others’ frequent flyer accounts back in June.

What’s especially frustrating dealing with an airline’s fraud department is that they aren’t usually open to communicating with you, and they frequently don’t act quickly. We’ve helped the member contact Air France’s fraud department, actually reaching a real person there, but they’re obstinate.

We’ve booked over a thousand award tickets with Flying Blue, and while their website can be frustrating and the competing answers from poorly-informed reservations agents can be frustrating, we’ve never experienced anything quite like this.

Which just goes to show that if a thousand monkeys working on a thousand typewriters hit keys at random for a thousand years… well, that even though in my experience most of the time a member gets caught up in an airline’s crosshairs for fraud, they’ve actually done something wrong, that the evidence is overwhelming… or that sometimes the slow process of looking into a member’s account exonerates them… occasionally there’s an individual that just gets one wrong, blatantly and obviously wrong.

Fortunately I have a lot of options — for escalating, for bringing in others (like American Express), and for reaching out to executives at the loyalty program.

But it’s almost more often than not, these days, that I’m forced to ask the question: if I run into so much trouble dealing with airlines, how does the average person even successfully travel from point A to point B?


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. This is why we will see regulation in this market soon. This is very clearly currency, and should be not allowed to be unilaterally ‘canceled’ with no avenue for appeal.

  2. @Joelfreak

    Totally agree. The airlines do whatever they want. With the only consideration of how much they think they can get away with doing, without members complaining. Since there are hardly any laws governing frequent flyer programs.

  3. I work with many airline fraud prevention executives both in finance departments (who largely deal with credit card fraud) and loyalty departments. I also work with fraud prevention execs in banks, hotels, and some retailers. The problem is that the type of personality that is attracted to work in fraud prevention is very numbers oriented and not people oriented. So, they don’t want to speak with customers and generally don’t communicate well with others in general, including their own marketing colleagues. They tend to be so numbers driven that they don’t have empathy for customers they affect negatively. On top of this, they see so much fraud that they tend to not believe legitimate stories. The best solution is to reach out to your marketing contacts immediately and not try to deal with fraud executives.

  4. Well,the miles and points attract scammers and cheapskates. The loyalty programs didnt want MF to be a game.

  5. If the government gets very far into regulation (and considering miles currency) taxation won’t be far behind.

  6. I believe taxation would be very far behind, for one simple reason: the folks who would be voting on it travel regularly to their home districts.

  7. You could always introduce the “nuclear option”. Go with a crooning by James Taylor. “You’ve got a friend, AF”.

  8. This really sucks. Since fraud nor mileage brokering weren’t involved, at the end your client will get his/her miles back and hopefully the award space will still be there. This whole investigation will just take a few months, unfortunately.
    May I ask what you advised your client to do in regards to their trip? Perhaps use Delta miles or another skyteam mileage currency? Just curious.

  9. @CubaGirl – Are you saying you think the politicians pay for their travel out of their own pockets? I’d say that’s mostly covered by the Members’ Representational Allowance, campaign funds, gifts, etc.

    It costs Reagan National Airport over $700K a year just for the free parking for Congress (92 reserved spots).

  10. Sad but fascinating. Please keep us posted. Anything on how to resolve such issues, or what might’ve triggered the issue in the first place would be very enlightening. Thanks for the post!

  11. Why would FB care from where the points/miles come? And was it actually a clawback from MR? Where any of the MR points a result of manufactured spending?

    If you can vouch for the client then i’ll be inclined to believe you, but i’m scratching my head why FB would care…

  12. Airlines and hotel programs see ‘loyalty program fraud’ as a bigger issue than ever before

    So do I. Fraud by the programs against members.

  13. Gary, Im crying. My FB account was shut down two weeks ago and I never did anything wrong! I transferred my MR to MY FB account and booked a ticket for a close friend of mine (I have proof that he is very close with me) and one morning I woke up to an email that the miles come from a mileage broker and that the tickets were cancelled and the account suspended ;(

    I would appreciate if you can email me if you have a solution. Thanks.

  14. Hey Gary,

    Any update on this? Planning on transferring MR to FB account (that I just opened) and don’t want to deal with this crap!

  15. What the heck? Why not just require the account holder to send in documentation that miles came in from their own Amex? That is very much insane!

    Given that story and Mike’s comment, now I will have to think twice about opening up/transferring any points to FB account (may look into cash tickets for a trip to France next year).

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