Department of Transportation Launches Investigation into Airline Loyalty Program Practices
ICARO Media Group
The Department of Transportation (DOT) has announced its plans to investigate possible deceptive practices in airline loyalty programs following concerns raised by federal lawmakers. The agency aims to review complaints and exercise its authority to investigate airlines for unfair and deceptive practices that may harm travelers.
A spokesperson from the DOT stated on Friday that they will carefully examine the issue and gather information by actively engaging with U.S. airlines. The department intends to take action against any unfair and deceptive practices found in loyalty programs.
Airlines for America, representing the largest carriers in the U.S., has chosen not to comment on the matter.
The scrutiny from the DOT comes in response to two U.S. senators who raised questions about consumer protection from "deceitful marketing tactics" in frequent flyer programs. The senators addressed a letter to Secretary of Transportation Pete Buttigieg and CFPB Director Rohit Chopra in late October, expressing concerns over airlines changing points systems and devaluing points without properly notifying customers. They highlighted unilateral contracts that allow airlines to make changes without direct consumer notification as a potential source of the problem.
Airlines strategically design loyalty programs to retain their most valuable customers. However, reports suggesting changes to points systems and the difficulty in achieving rewards have prompted lawmakers to request action from regulatory bodies.
In an attempt to attract dissatisfied travelers, Southwest Airlines made a move in October by lowering the requirements for the top levels of its frequent-flyer program. This decision was in response to the increasing dissatisfaction with other airlines that have made it harder to reach elite status.
The investigation by the DOT marks a significant step towards ensuring fairness and transparency within airline loyalty programs. As the department works to gather information and meet with airlines, consumers will be eagerly awaiting the outcome of the investigation and potential actions taken to protect their interests.