Via @palmerlaw comes a story (out of Florida, natch) which illustrates legal risks of taking advantage of some of the very best deals and operating in the ‘grey areas’ of complicated frequent flyer programs.
Anything that a program deems unintentionally too generous may be your fault, and they could even sue you for it.
Their IT glitches may be seen as your problem, not theirs (although I could imagine certain courts taking a law and economics approach and suggesting that programs have the best incentive and can internalize the cost of preventing problems, and so should be the ones held responsible).
So What Was the Glitch That Lands a Mileage Junkie in Court For $150,000 in Damages?
Here’s what he did:
It was the glitch that kept on giving.
That’s how Choice Hotels International, one of the world’s largest hotel chains, portrays a flaw in its online reservations system in a lawsuit accusing a St. Petersburg man of fraudulently redeeming gift cards worth $48,500 in a rewards program for loyal customers.
It seems that this man was making reservations with Choice Hotels, getting awarded Choice Privileges points, and cancelling his bookings.
I’m not certain what was happening here, since the points aren’t usually awarded until checkout. Perhaps the missing element from the article is he was earning shopping portal points which weren’t getting taken away when he’d cancel his reservation, rather than points for the stays themselves.
In any case, he would keep the points and cash them in for gift cards.
The Lawsuit: the Guy ‘Shoulda Known We Were Making a Mistake’
Choice Hotels is suing him seeking triple damages.
They claim he “knew or should have known that people don’t get rewarded by hotel franchises for declining to spend their money on a room.”
The lawsuit said the rules of the program make clear that customers earn the points for “actually staying in a Choice Hotel room and paying for the room in full.”
“Frequent stay programs are common throughout the industry and neither Choice nor its competitors offer rewards for frequent reservations,” the lawsuit said.
Programs Make Mistakes All the Time. And Then Fix Them.
I don’t know that even the claim that programs don’t just award points for things other than actually staying is right. Just this week Hyatt gave a whole bunch of people 30,000 points who merely registered for the current promo. They identified the issue, took responsibility for their own IT glitch, and solved by problem by clawing back the points in a timely manner.
What About When Programs Don’t Fix Their Mistakes. Do You Just.. Win?
I get emails from people all the time who redeem miles for upgrades or awards, and find that the points don’t get deducted from their account.
This used to be very common on United. On IHG Rewards Club redemptions members would frequently see the points they used for a stay redeposited after a stay. I’m not sure a member is obligated to bring this to the attention of a program — spend time on hold, explaining it to a representative who doesn’t really understand, convince them to open up some kind of support ticket, follow up when the program doesn’t act. I don’t think it’s wise to just go ahead and spend the points.
I certainly wouldn’t right away. I would want to make sure that the points were available up until actual travel is completed.
I once had a US Airways award ticket issued, where Dividend Miles auditing found that there was no frequent flyer account attached to the redemption and so no miles withdrawn. They called me and asked, rather accusatorily, how I had planned to support the award (as though it was my doing, or could possibly have been my doing, rather than their agents — I simply told them “with the miles in my account”).
After a certain amount of time, and I don’t have a clear sense of how long that is, the miles are more or less there for use.
Can Benefiting Too Much Be Criminal? What About Too Little?
This case is a civil suit. I was an expert witness in a federal criminal trial where someone, unbeknownst to their employer, credited flights to an airline small business program in their employer’s name and then used the points for personal travel.
I wonder, is it criminal for a shopping portal not to award miles that you earned? Goodness knows there are plenty of times I’ve gone through a mileage shopping site and the miles didn’t credit. Sometimes I follow up. Sometimes I don’t. I’m very often cheated by mileage programs this way.
I certainly do not intend to go through a shopping portal in order to not earn miles. But that doesn’t mean the shopping site has acted in a criminal fashion (computer crimes!) when they don’t award the points. Nor does it mean I ought to be entitled to treble damages in civil court.
Should Airlines Sue You Over Mistake Fares?
We all know that airlines don’t intend to offer international first class fares for just a couple hundred dollars, though, right? (Or do we?)
My own view there has always been to book the ticket, wait to see if it’s honored, but never to claim that I’m entitled to the fare (and sue if the airline doesn’t honor!), although I’ll assume an expectation that the ticket will and should be fulfilled if it isn’t cancelled promptly. I certainly don’t think booking a mistake fare becomes actionable on the part of an airline, let alone criminal!
But There IS a Line, Isn’t There?
Some strategies clearly push the line too far. In 2012 Priority Club offered 300 points for downloading their shopping toolbar, and you could do it as many times as you liked. They simply didn’t technologically limit it to one bonus per member (they didn’t even actually force the download to earn the points). So some people scripted it, earned hundreds of thousands of points or more, and then cashed out those points. Priority Club fixed the glitch Monday morning, but in many cases it was too late — members had cashed out their points for e-gift cards already, and spent the funds on those gift cards.
I wasn’t comfortable doing this myself, it ‘felt’ wrong. Although I cannot articulation a compelling principle that differentiates that from booking a mistake fare — except that I actually don’t think acquiring the points via scripting is wrong as long as the program had the chance to claw back the points or let the points accumulation stand, just as I think an airline ought to be able to choose whether or not to honor a mistake fare (as hotels are able to, and sometimes do).
While the magnitude of the supposed points-earning with Choice is impressive enough to set off alarm bells, I admit there are grey areas where it’s hard to define how far is too far — and it’s worth warning that sometimes pushing the envelope no more than is common among many in frequent flyer forums could land you in court.