American Express Just Dropped Millions of Points into Accounts By Accident. What Should You Do?

A thread started on Flyertalk Thursday night reports that Membership Rewards balances for several members doubled — or even grew ten-fold.

Most of the discussion there seems to be centered around how likely it is that a member could get away with keeping the points accidentally deposited into their account. In fact, many seem to be transferring the points out right away hoping that helps them abscond with their sudden loot.

“If they give you the inflated amount, transfer out all of the points on the spot.”

“Transferring right now, Merry Xmas to me if transfer goes through.”

“Transferred them all out. Now I won’t be able to sleep until transfer is complete. OH MY GOD, points were more than double what I should have! … I consider that paydirt as those cannot be reclaimed.”

In building their case that the points are theirs to keep, and American Express has no recourse:

Points accrued in the Program account have no cash or monetary value.”

So Amex transferred nothing into your account thus you have nothing to worry about.

I think the approach to quickly transfer out all the points credited in error is a mistake:

  • Strategically

  • Ethically

How Should You Handle Points in Your Account By Mistake?

IHG Rewards Club used to have a frequent issue with reward night stays where points would credit back to an account once the stay was completed. Many times I’ve seen United MileagePlus accounts where awards would get issued but miles not deducted.

My advice in those circumstances is always to wait and see if things get corrected on their own. I like to even make a call to alert the program to the mistake.

  • I wouldn’t go to extreme lengths to get an issue corrected. If a program is notified and does nothing after a reasonable waiting period, I’d be comfortable using the points.

  • I’d hate to have a program claw back points later, cause my account to go negative, and decide to cancel awards — something I’ve seen happen (whether members feel it’s fair or not).

I’ve had points fail to credit properly, and I’ve probably have points fail to be withdrawn too. Ultimately it’s a wash. I follow up to get points credited, and when I notice a mistake in my favor I say something too. But I don’t keep calling with superhuman persistence.

Loyalty program fraud groups too often hate their members. Sometimes though there are members they should hate. Don’t be one of those.

Redemptions Using Points That Aren’t Yours Can Easily Be Clawed Back

I once booked an award through US Airways Dividend Miles and points weren’t deducted from my account. The agent issued the ticket, but didn’t input my mileage number. I got a call from the fraud department asking me how I intended to pay for the award. I missed the call, and if I hadn’t gotten back to them promptly they were going to cancel my award.

It was their error, I told them I intended to pay for the award with miles from my account. But they already had their finger on the cancel trigger.

Some members took advantage of a glitch at Priority Club (now IHG Rewards Club) where you could download their shopping toolbar over and over for points each time. You didn’t even need to download the program. You just had to complete the form and go to the download page.

  • People scripted this, and earned millions of points over a weekend.

  • They knew full well that come Monday morning their accounts would be cancelled.

  • So they booked awards right away. Those who booked future hotel reservations had those cancelled. Some got ‘clever’ and issued gift cards. Those were cancelled.

  • Some folks went so far as to redeem for electronic gift cards, and redeem those electronic gift cards from the merchant immediately. Shaky legal ground, but for them it worked, they lost their accounts but successfully stole merchandise.

What Will American Express Do?

Without knowing what caused the glitch or how extensive it is, it’s hard to even speculate — though there’s a realm of possible scenarios.

Points transfers can be reversed. Under normal circumstances points transfers are final, but American Express can work with its transfer partners when they wish to. Even if you’ve already redeemed the points you transferred, that could cause your airline mileage account to go negative — and the issuing airline might cancel your tickets.

I suspect that American Express might just let you go negative, or bill you for any negative balance. Two and a half years ago American Express eliminated the ability to do a ‘points advance’. They used to let members go negative. A Platinum cardholder could borrow up to 60,000 points.

A member was supposed to earn back the borrowed points within 12 months, and any negative after a year was supposed to be charged at 2.5 cents a point (the price at which American Express sells points).

Transferring out points before American Express can reclaim them could be a costly endeavor. And don’t pay them back? Go to collections as well as have cards closed — possibly even being invited to no longer be a customer of theirs in the future.

What’s more transferring out ill-gotten gains right away makes you look guilty. If points had been there for awhile it’s reasonable someone might not know their account balance, and should be given the benefit of the doubt. But receive double, quintuple, or 10x the balance and immediately transfer the points? It’s certainly suggestive of someone trying to get away with something — that’s not someone I’d want as a customer.

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 »

More articles by Gary Leff »

Pingbacks

Comments

  1. the way i look at it is, if they inadvertently deducted the points from your account, you’d call and they’d put them back.

    in this event you shld give them a call to let them know of their error.

    i’m guessing the thieves mothers didn’t inculcate in them the principle of “honesty being the best policy”.

  2. ethics aside, is is really worth pissing off Amex and having them cancel your account and lose any future earning potentials?

    looks like many of the people talking about transferring out the loot are all FT members less than 2-3 years old. they don’t understand about playing this game for the long haul

  3. i don’t disagree, honesty is the best policy, is all about being in for the long haul.

    people that have long term success live principled lives.

  4. The only thing I’d disagree with is calling and following up on any points that have been inadvertently deposited to your account. It is an asynchronous relationship between you and your points program- they build their customer service centers, they can and do make mistakes that deduct points, forget to credit you, keep you on hold for extended periods of time.

    If I get extra points in my account, which happens with some frequency on my IHG account- bonus for this activity, bonus for credit card promotion, etc- I would not bother calling in. I wouldn’t use the points immediately, but if they were still there 6-12 months later, then I would, without any guilt.

  5. I really think that the phrase in their T&C (Points accrued in the Program account have no cash or monetary value.) is extremely interesting. It’s obvious to anyone that the points DO have value in the sense that they can be exchanged for things that cost money (flights, hotels, et al.) Companies put clauses like this in their T&C to protect themselves.
    It would be very ironic if a creative lawyer could present this to a court so that their client wasn’t guilty of fraud since nothing of value was taken.
    Personally, i wouldn’t transfer them out. I would let the problem sort itself out.

  6. About 2 years ago, I received double Starpoints for about 6 long-haul DL flights; this totaled about 24,000 Starpoints. Since I keep a close eye on my accounts, I e-mailed SPG and told them I thought there was a problem with double credits (in one instance, they showed me flying twice to PEK on the same day).

    They responded that they did not see a problem, and told me the points were mine.

    Honesty works.

  7. My MR account went from around 1800 points to over 67000. I chatted with a rep. online and they had no idea what happened. My account shows that there’s an error and to try back later. If the points are still there in a few months, I’ll chat online again or call the MR team. After that, I may just give them to charity.

  8. I don’t have as much mercy for a company when they will sell me MR for 2.5c value, but only allow me to redeem them or pay my credit card balance at pitiful redemptions. E.G 28k points for a $165 charge.

    I would love to see a real value of 2.5c on MR points…

  9. I don’t free points, I just want my points back … they disappeared from my account as they used to show on the upper right hand side of the screen!

  10. Interesting : I had this discussion with a federal judge several months ago about Sen Menendez claiming the AMEX points from his friend had no value. The judge didn’t think that argument would win the day, but did find it funny Menendez could have gotten the 2 nights in Paris just by applying for the Hyatt card.
    I think Gary thought Menendez needed schooling on use of AMEX points at more than 1 cent each.
    Last December SPG debited 45k points from my account they have credited in error more than a year earlier. Definitely a bad business decision on their part, but I knew the points were erroneous.

    This is sort of like money being erroneously deposited in your bank account and the account holder taking it out and using it. Not exactly, just sort of like that.
    I don’t think the feds are going to be showing up at your door. Of course, Martin Shkreli didn’t either.

  11. Being one of the people who got extra points and moved them to an airline, I’m not sure how this diferes from mistake airline fares or hotel rates, both of which I’ve taken advantage of once. Big corporation makes mistake on data entry or coding, people pounce on the opportunity. Why is this different?

    Even though I’ve moved the points, I haven’t used them. I realize that there’s a chance that they will take them back (although the account adjustments make it look like they won’t). I also realize there’s a good chance I will never see another AMEX credit card. But since the only AMEX card I was waiting for was the 100k platinum, and this was over 400k, I’ll take my chances.

  12. @H – an airline can choose to honor a mistake fare or not. Transferring the points out immediately is a strategy to ‘get away with’ the mistake. Just MHO of course.

  13. Gary, I understand. But until recently, the airline didn’t have the option to not honor the mistake fare. Buying the ticket immediately at the incorrect price was a strategy to “get away with” the mistake.
    Plus, I suspect that AMEX could undo this, as I did not spend the transferred points.

  14. This comment is months late, but the one thing I didn’t understand was there numbers being discussed. Most people seemed to have gotten five digits extra, with a couple boasting about six extra digits. For anyone seriously playing this game, that’s nothing. Is it really worth trying amex’s hand for such a small number? This glitch seems to have happened due to something else going on that not many are aware of, but they aggravated each others situations tremendously. The fallout to the affected parties was incredible, but most people aren’t involved in this ongoing situation. There’s a lot going on behind the scenes, with a couple of things making their way to the spotlight, but many don’t realize the root, not seeing the whole picture. It’s a delicate and fragile situation at the moment. It’ll be interesting to see how this chess game plays out.

  15. What did he say?

    BTW, no communication from AMEX for me, and they continue to give me more points after they lost mid six figures

Leave a Reply

Your email address will not be published. Required fields are marked *