President Joe Biden has often seemed to deflect from the primary concerns of voters—immigration, the economy—by positioning himself as a consumer advocate over relatively trivial financial transactions. For several years Biden has bragged about trying to bring grocery stores to heel over “shrinkflation,” and he has also touted his actions against so-called “junk fees” at hotels and vacation resorts.
Now the administration has set its sights on what it seems to believe is a scourge for the American public: dishonest airline frequent flyer programs. Secretary of Transportation Pete Buttigieg https://www.cbsnews.com/news/airline-frequent-flyer-programs-american-airlines-delta-southwest-united/has sent a letter to the heads of Delta, American, United, and Southwest asking for detailed information about the fees and terms of their frequent flyer offerings.
Apparently, passengers have complained that airlines change the rules on the fly, swapping out the number of miles needed to take free flights, and unfairly limiting the number of seats that customers can buy using banked points. According to Buttigieg, American families depend on these programs to visit family and take vacations.
Comparing frequent flyer programs unfavorably to bank savings accounts, Buttigieg said the benefits are controlled by the companies which “unilaterally change their value.” In a statement put out by his department, Buttigieg claimed his goal was to make sure customers get the benefits promised to them, and that requires him to ensure that the programs are “transparent and fair.”
Several of the airlines responded individually. Delta issued a bland statement saying its loyalty program “means everything to us,” and that the company enjoys “providing a meaningful rewards experience.” For its part, Southwest said it “takes great pride” in its Rapid Rewards scheme, which it made sure to characterize as “award-winning.” Southwest said its program is “flexible” and offers the best selection of seats available for redemption with miles.
The trade group Airlines for America, which all four airlines are members of, said its members’ programs were all “transparent.”
In the past, customers earned free flights solely based on how many flights they have bought, factoring in the number of miles traveled. But airlines now offer their own credit cards and many travelers rack up points by using the cards for everyday expenses.
In May, the Consumer Financial Protection Bureau and the Transportation Department held a joint meeting on frequent flyer deals where they discussed the same issues that Buttigieg cited in his recent letter to airlines. Consumer advocates spoke at the meeting, but there was no representation from the big four airlines.
The CFPB said it has received more than 1,200 complaints about credit card reward programs within the past year.
