Over at CreditCards.com there’s an interesting interview with Representative Alan Grayson (D-FL). Grayson, like most members of Congress, is a frequent flyer, and he’s not too pleased with how airlines have treated their loyalty programs. Check this out:
Q: What specifically needs changing?
A: One element is the frequent devaluations. The programs went in some cases for decades without devaluing. Now, they do it once or twice a year. Another element is the lack of availability at the touted award levels. In some areas, you can look almost a year in advance and you don’t see a single seat available at the award level that the airlines claim is available when they are advertising these programs. Another element of it is changes without notice. Historically, airlines gave changes with a year’s notice. The National Association of Attorneys General recommended that be the standard, and now we’re seeing in some cases changes with no notice whatsoever. All of those activities are deceptive.
Q: What is it you would like to have done? Simply an investigation or are you looking for particular policy changes?
A: There is clear evidence at this point that there is misleading and deceptive activity on the part of the airlines. The frequent flier programs need to be reformed, either voluntarily or through regulation. The best case scenario is that everyone realizes — either voluntarily or through regulation — that there should be one year’s notice to changes in these programs, that there should be availability on every flight at the advertised levels and that the devaluations either stop or occur at very lengthy intervals, with some kind of business justification.
Grayson does not seem concerned with hotel or credit card rewards programs, only airlines:
Q: The majority of frequent flier miles are actually earned not by flying, but through credit card partnerships or other partnerships. Is part of the scope of this looking into other forms of miles and point currencies created by credit cards or hotel programs?
A: By far the largest of the loyalty programs that involve these kinds of arrangements are airline programs. This is the focus of activity. In recognition of that, the banks have paid literally billions of dollars to try to hook up with airlines to promote their frequent flier programs to credit card holders. Although credit cards are a very large part of the program, they aren’t the focus of the deceptive elements of the programs. The deception comes from the fact that they’ve essentially created a private currency, and the airlines are cheating their customers by devaluing it.
The whole interview, plus the background, is here.
What do you all think? Should the feds intervene in the frequent flyer frequent devaluations?