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New York Senator Wants Frequent Flyer Regulation

There oughta be a law!

In the exasperating world of frequent flyer programs, that’s an oft-expressed sentiment. Luckily for those who have gotten the short end of the mileage stick, it’s a sentiment shared by U.S. Senator Chuck Schumer (D-N.Y.).

The Associated Press reports that Schumer has asked the Department of Transportation (DOT) to look into complaints from frequent flyer program members that airlines have unfairly expired their miles.

According to a news release provided by his office, Schumer said, “As the holiday travel season approaches, we cannot let airlines and credit card companies continue to fly off with hard earned frequent flier miles. When a consumer accumulates valuable frequent flier miles, they should not have to constantly worry that they are going to expire with little nor no notification from the airline. Playing games with frequent flier miles takes money out of people’s pockets, plain and simple. It’s annoying, it’s unfair, and it has to stop.”

Schumer may be the right man for the job. Most recently, according to his website, he sponsored Senate bill 235, “to amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan.” And the stated goal of his Senate bill 710 is “to prohibit unfair or deceptive acts or practices relating to gift certificates, store gift cards, and other general-use prepaid cards.” Fairness and transparency in the consumer arena are clearly deeply-held values. And he believes that government enforcement is an appropriate means to attain them.

Again, from the Senator’s news release: “To protect consumers, Schumer today called on the DOT to investigate whether or not air carriers are engaging in deceptive business practices. In making this determination, Schumer says that DOT should examine both the accounting statements and the frequent flier agreements of the carriers who operate frequent flier programs, in order to determine whether the airlines have treated these miles as having been purchased by consumers as opposed to being gifts from the airlines to their consumers as a reward for their patronage. Schumer also asked the agency to draw up new rules to improve disclosure and set limits on when miles can be rescinded and accounts can be closed.”

While the legislation Schumer envisions would be a step in the right direction, it’s not nearly enough. Mileage expiration is just one of a number of consumer issues posed by travel rewards programs. My hope is that the discussion will ultimately spur legislation leading to full transparency of the programs. Consumers should be able to review and compare program performance in such meaningful areas as the availability of award seats and the success rates of program members attempting to redeem miles for free seats or upgrades. The airlines’ ability to gratuitously devalue program members’ miles needs to be examined. And so on.

As the airlines did when popular sentiment looked to be building toward a federally mandated passenger bill of rights, they will probably try to deflect Schumer’s initiative by warning of dire unintended consequences and promising to self-correct. Based on their record to date, it’ll never happen.

Which is why, indeed, there oughta be a law.

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