Are frequent flyer programs fair? DOT launches investigation

Airlines often offer frequent flyer points to customers who book flights or make purchases through affiliated credit cards, allowing them to redeem points for perks like free or discounted flights, seat upgrades and other services.
However, according to the Department of Transportation, these services may have been defrauding customers.
On Thursday, the DOT announced it is investigating the four largest U.S. airlines over possible unfair practices in their frequent flyer programs.
Per ABC News, Airlines for America, which represents the accused airlines, said in a statement that “U.S. carriers are transparent about these programs, and policymakers should ensure that consumers can continue to be offered these important benefits.”
The probe will examine whether American Airlines, Delta Air Lines, Southwest Airlines and United Airlines have engaged in “unfair, deceptive or anticompetitive practices” related to their rewards programs, according to a statement from the DOT.
The Transportation Department expressed concerns that these companies may devalue the dollar value of accrued points by retroactively changing reward requirements and adding extra fees for maintaining, redeeming or transferring earned points.
The airlines are also accused of colluding and engaging in price signaling through mergers. When airlines merge, customers may lose value, rewards or status in one or both loyalty programs, which reduces competition and choice.
As part of the investigation, the DOT has ordered the airlines to detail any changes made to their rewards programs over the past six years, provide the average dollar value of points, disclose fees associated with the programs, and explain how mergers have affected existing rewards.
“Points systems like frequent flyer miles and credit card rewards have become such a meaningful part of our economy that many Americans view their rewards points balances as part of their savings,” Buttigieg said. “These programs bring real value to consumers, with families often counting on airline rewards to fund a vacation or to pay for a trip to visit loved ones.
“But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value,” he continued. “Our goal is to ensure consumers are getting the value that was promised to them, which means validating that these programs are transparent and fair.”