Reduction in Transfer Rates to Velocity/Krisflyer

[scwappy]

Have written my complaint email as the first step and will likely have to go to FOS. Requested 100,000 points which is the value I have lost

 

[daveozsydney]

Hi guys,

If it helps anyone, I'm including a copy of the message I just sent to Citibank through secure messaging. I have read the terms and conditions and my reading is that Citibank is in breach of contract.

If points were classified under goods and services points would be liable to GST, but there is a legal ATO ruling excluding points from this definition.

The legal definition of points the ATO use follows - " 'loyalty points' is a reference to any record keeping mechanism (usually, but not necessarily, called points) which is used to ascertain the member's eligibility for rewards. However, it does not include rights to goods or services in the form of vouchers within the meaning of section 100-25 ....

Examples of the final clause of paragraph 6.2 in the terms and conditions for goods or services clause would therefore included redemptions such as kettles, toasters etc., restaurant meals...., hotels...

The first part of the clause covers redemptions "the rate at which all Points in the program are generally earned or ***converted*** we will give you 90 days written notice of that change; (asterisks added by me) "

Anyway, here's my letter. My next steps would be emailing the top execs and then FIO then legal action as my loss is material in the order of around $10K so worth me pursuing. (I have experience in this area but obviously it's cheaper to give citibank the opportunity to rectify the breach of contract before going down that path).
It seems a few others are in this category, so could be class action territory.


Dear Citibank,

At the time of writing I have 672,098 citi reward points.
Until a day or so ago, these were able to transfer to Krisflyer at the rate of 1 citi to .667 making them worth 448,065 Krisflyer points.

When I logged in today to check my balance it appears Citibank have changed the rate at which points are converted to Krisflyer miles without any written notice.

This has made a material difference to me to the effect that these points now only convert to 336,049 Krisflyer points.

This is a difference of 112016 Krisflyer points. I now need an extra 224,032 Citi Points to achieve the same Krisflyer value.
To put this into context, this is the equivalent loss of a one way First Class flight from Sydney to Europe which has a retail value of around $10,000.

Citibank has changed the conversion rate without notice and contrary to clause 6.2 of the Citibank Terms and Conditions "Citibank Rewards and Citibank Qantas Rewards Program Terms and Conditions" which form part of the contract between myself and the bank. As such there has been a breach of contract by Citibank by failing to provide the required 90 days WRITTEN notice.

Clause 6.2 paragraph one is reproduced here for your reference
"If we change the rate at which all Points
in the program are generally earned
or converted we will give you 90 days
written notice of that change ;"

Please can you advise what steps you are going to take to remedy this breach and what compensation for the breach you are able to provide.

Kind Regards,

...

 

[Arrow29]

Very disappointing but, as others have mentioned, unfortunately not all that surprising given Citi's track record (they did the same thing to me when I held the Platinum..but subsequently got offered an upgrade to the signature fee-free for life so have stayed with them).

I'll clearly be diverting spend to my Amex as much as possible now, but I'll still hang onto my Signature as for SQ I still don't think there's a lot else out there that earns better for non-Amex? It's now 0.75KF points per $ - somebody please correct me if I'm wrong! Need a non-Amex in the wallet for those times that it's not accepted / rates etc.

I too have sent a message via their online facility and am awaiting a reply. If I don't hear back in the coming days I'll give them a call.

 

[daveozsydney]

@arrow29 - should be using amex where possible anyway assuming you have a higher earn rate - like 2 per $ on business accelerator which beats 1.33 per $ on citi prestige anyway

 

[Arrow29]

@arrow29 - should be using amex where possible anyway assuming you have a higher earn rate - like 2 per $ on business accelerator which beats 1.33 per $ on citi prestige anyway

Hey dave, I don't have a business Amex so I only hold a platinum edge (which I use at supermarkets and fuel), velocity platinum (for all the recent bonus points and at restaurants) and this Citi Signature. Previously the base earn was the same between my Amex and Citi but obviously now it will all be directed to Amex and Citi only used when that isn't possible.

 

[Pumbaa]

Ever since the platinum conversion rate change all those years ago, I made sure I transferred my points as soon as I reached 15,000 Citi Points. Currently I only have 40,000 points across 3 different Citi accounts, so not too heavily leveraged, but annoyed all the same!

Especially with my CitiGold card where the value drop is significantly more than 25%. It used to be 1:1 now its 1:0.5!

 

[N860CR]

I'm trying to work out the maths for moving forward.

1.5 Citi Points per dollar therefore "costs" $13,333 for 20,000 points which converts to 10,000 Kris/Velocity points. So that's roughly 0.75 PPD as mentioned above. Is there any Visa/MC that is better than this?

 

[burmans]

Looks like to me there is no hope in hell of any action from FOS. The Citi T&c 6.2 says that they can change the reward redemptions without notice. It only says 90 days notice to change the reward earning. This is no different to changing the value of the toaster from 50,0000 points to 75,000. The FOS is just going to laugh.

Our perception that the card was earning 1 velocity for $1 spend wasn't really correct, but that is the way I viewed it too. I Also have lost a few points so I am somewhat pissed but I won't be throwing the card away. At $1 spend for .75 velocity points it is still one of the highest earning cards out there, and because I have the Signature free for live it's still an exceptional deal.

for Visa cards, only ANZ Black, and Virgin cards are better value on earn but the annual fee is quite a lot.

Not what 6.2 on my PDF says. my bolding

6.2 We may vary these Rewards Program Terms and Conditions from time to time. We will notify you of a change in the following ways:

• If we change the rate at which all Points in the program are generally earned or converted we will give you 90 days written notice of that change;

 

[Beta4Me]

If it helps anyone, this is what I sent to Citibank (via the Messages facility in Citibank Online):

IMPORTANT

Dear Sir or Madam,

Upon logging into my Citibank Online account and proceeding to the CitiRewards subsite to transfer points, I became aware that the redemption ratio for KrisFlyer and Velocity has been reduced from 1.5:1 to 1:0.5. I have not received any notice of this change which appears to have come into effect 1 November 2015--and, seemingly, neither have any other Citibank customers.

I draw your attention to Citibank Rewards and Citibank Qantas Rewards Program Terms and Conditions which applies to the product that I hold, the Citibank Rewards Credit Card - Signature. At Clause 6.2 it clearly states: If we change the rate at which all Points in the program are generally earned or CONVERTED we will give you 90 DAYS WRITTEN NOTICE of that change (emphases added). This without notice devaluation in points transfer redemptions is a direct breach of the product terms and conditions and is therefore unlawful.

Accordingly, I demand the following:
- With respect to my current balance of 202,273 CitiRewards points which would have been convertible to 134,849 KrisFlyer miles or Velocity points, a credit of 67,425 points such that the amount of post-conversion points or miles is maintained.
- With respect to 90 days worth of future transactions and the associated 83,956 CitiRewards points (based on the last three account statements) that would have been earned, a credit of 27,986 points as compensation for the lost post-conversion points or miles associated with this earning.
- A further 95,411 CitiRewards points (being the amount of the above-mentioned compensatory points) as compensation for the stress, suffering and lost time that this matter has caused me--notwithstanding the unlawful manner in which Citibank has acted.

It should be noted, with reference to notes on my account, that I have consistently experienced extremely poor customer service from Citibank and this devaluation, unfortunately, appears to be the continuation of it. For me to maintain my current revolving credit facility with Citibank, I would have to maintain the same effective points earn and conversion rates, which is now only possible with the Citibank Prestige credit card product. Therefore, I further request an immediate conversion to this product whilst maintaining the current fee free for life status which I hold with my current card. Failure to honour this request would reflect bad faith and cause me to seriously reconsider my relationship with Citibank.

I look forward to a prompt reply.


Yours sincerely,
Beta4Me

 

[yohy?!]

Nice one Beta4Me, I thought about asking for the future 90days worth of points but then decided I would rather just cut my losses and put all that spend to another card.

 

[burmans]

If it helps anyone, this is what I sent to Citibank (via the Messages facility in Citibank Online):

I do like the claim for future earnings and the stress, suffering and lost time claim, I must use that.

 

[Cruiser Elite]

Yes very well done B4M - do you mind if I use that template for my submission?

 

[MEL_Traveller]

Signature was 1.5:1, so effectively 1KF/$ on domestic spend.

Still confused! We called citi and at first they said 'oh! no change!'. Then we asked them what the rates were before and after 1 november.... they said Citi Signature was 1.5 Citi -> 1 KF, and now is 2 Citi-> 1 KF. Sorry to be dumb here... but that's a correct summary of the change?

We will write in accordingly. Just need the correct figures to put in. We haven't done a conversion before.

 

[Beta4Me]

Nice one Beta4Me, I thought about asking for the future 90days worth of points but then decided I would rather just cut my losses and put all that spend to another card.

I actually love Citibank because I get so much compensation from them. Takes some time, but worth it. I've got around 100,000 SQ miles (after conversion) from them over time for various screw-ups. This is simply another opportunity. Unfortunately, my future use of the card will drop as sub-1ppd non-Amex earn rates don't interest me when there are other cards with a higher earn rate such as the Virgin High Flyer (0.926ppd to KF) and various QF direct earn cards. Hopefully I can get the Prestige, otherwise I'll probably try and get an ANZ Rewards Black (there being an extra motivation to do so as it is ATO-friendly) which is 0.74ppd on the Visa and 1.11ppd on the Amex for KF mike's. But my credit score is a bit below par at the moment. Decisions, decisions...

 

[Beta4Me]

Yes very well done B4M - do you mind if I use that template for my submission?

Not at all. That was the reason for sharing it

 

[yohy?!]

Still confused! We called citi and at first they said 'oh! no change!'. Then we asked them what the rates were before and after 1 november.... they said Citi Signature was 1.5 Citi -> 1 KF, and now is 2 Citi-> 1 KF. Sorry to be dumb here... but that's a correct summary of the change?

We will write in accordingly. Just need the correct figures to put in. We haven't done a conversion before.

Yep, you got the numbers right there (or 1:0.67 now 1:0.5)

 

[albyd]

Just called Citi - got through to someone in Sydney call centre and they gave me the standard spiel then transferred me to their supervisor in Sydney called Drew who agree with me and said he's been making representations all day but not getting anywhere. I asked to be put through to retentions. They initially offered me the other $350 off my annual fee and I told them I wanted 200K points as that's how many extra points I need at the new conversion rate to put me in the same position as I was a few days ago given they've not played fair and given us fair warning of the devaluation.

Said he will get back to me by Friday on my proposal (might meet me "half way" were his words) and I'll report back on my experience.

Only just signed up for Amex Platinum Charge wondering if I'd ever use it much beyond the sign up. I've got my answer now - prefer to accumulate to Amex MR. PayPal is becoming more prevalent with billers (like Sydney Water who I just paid) who don't accept AMEX - will be interesting to see how much I can move away from Citi then downgrade to lower card next year. Wonder if this is going to happen everywhere sooner rather than later with the proposed reduction in interchange - might just transfer out when I can - shame can't use it as a warehouse anymore.

 

[GalaxyNexus]

After a few prior screwups with citi where they think it's alright to take 3 weeks to process my money transfer (during which the money just go "missing") rather than the nomral 2-3 days, I have no more loyalty for this bank. I now only use them for 0% BT (free money!) and PriorityPass - they probably have lost nearly a grand out of their relationships with me as I've never paid any fees

 

[aerotravel]

As a compensation for me personally to move from annual fee free Visa Signature to annual fee free Visa Prestige... that would make me happy! Since that would make it back to $1 to 1 VA/KF.
I'm sure others might feel differently on what would make them happy.

Yes - restoration to previous redemption rate would be ideal... plus, clean up their act on 90 days notification too...

 

[bigsleep55]

Edit - Don't worry. I figured it out.

For those who have issues calculating, like I apparently do, make sure you calculate as follows:

'CitiRewards Points' x (2/3) = X /0.5 = 'Grossed up CitiRewards Points'

Therefore, the compensation amount should be the 'Grossed up CitiRewards Points' less 'CitiRewards Points'.