Frequent Flyer Programs Are Under Scrutiny

People walking with suitcases past a window at an airport.

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Has your favorite frequent flyer program seemed a little lackluster recently? Well, the Department of Transportation is taking a look into it, as part of what they say has been "historic action to defend the rights of airline passengers and hold airlines accountable if they fail consumers" under Secretary Pete Buttigieg.

The Transportation Department is looking into a few different factors that they say may "hurt travelers," Reuters reported. This reportedly includes transparency in award tickets, the transferability of miles, and how much notice consumers get when changes are made to programs, sources told Reuters.

"We plan to carefully review complaints regarding loyalty programs and exercise our authority to investigate airlines for unfair and deceptive practices that hurt travelers as warranted," the Department of Transportation told Kiplinger in a statement. "DOT officials are actively meeting with U.S. airlines and gathering more information on this issue."

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Another factor the department is reportedly looking into is how frequent flyer miles may devalue over time, making them less useful for getting new tickets. This is something Ganesh Sitaraman argued in a recent piece for The Atlantic criticizing mileage programs and travel rewards. "Online analysts try to offer estimates of points’ cash value, but airlines can reduce these values after the fact and change how points can be redeemed," he wrote.

This scrutiny by the Department of Transportation comes after members of Congress called for government action. Two senators, Dick Durbin and Roger Marshall, put out a statement asking the Department of Transportation and Consumer Financial Protection Bureau about actions they are taking to protect consumers from “the deceitful marketing tactics of these frequent flyer programs."

"There are troubling reports that airlines are engaged in unfair, abusive and deceptive practices with respect to these loyalty programs," the senators said in the statement. These include, for example, reports suggesting airlines are changing point systems in ways that are unfair to consumers, including by devaluing points.

Hopefully this will mean that airlines will have increased transparency in mileage programs, allowing you to better use your miles, whether you're going to one of the cheapest countries to visit or one of these great places to buy a vacation home.

Over the last year, the Department of Transportation has made some movement on air travel. After last winter's flight meltdown, the DOT heard people's cries about getting refunds for cancelations and delays. In May, the department proposed a rule to help passengers with cancelations and delays, and just this week imposed a $140 million civil penalty on Southwest Airlines for its role in last winter's flight chaos.

Alexandra Svokos is the digital managing editor of Kiplinger. She holds an MBA from NYU Stern in finance and management and a BA in economics and creative writing from Columbia University. Alexandra has over a decade of experience in journalism and previously served as the senior editor of digital for ABC News, where she directed daily news coverage across topics through major events of the early 2020s for the network's website, including stock market trends, the remote and return-to-work revolutions, and the national economy. Before that, she pioneered politics and election coverage for Elite Daily and went on to serve as the senior news editor for that group.

Alexandra was recognized with an "Up & Comer" award at the 2018 Folio: Top Women in Media awards, and she was asked twice by the Nieman Journalism Lab to contribute to their annual journalism predictions feature. She has also been asked to speak on panels and give presentations on the future of media and on business and media, including by the Center for Communication and Twipe.

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