Some Accounts suspended for "potentially" dodgy points transfers

[clipped_wings]

Well there you go. If people have actually acted in a less than ethical way with their accounts - then I have little pity for them when they get caught. I had no idea that you could even move points to a non-family member. And that shows either of two things: a) I am too honest to have ever considered it or b) I am too naive to have ever considered it.

While I'd prefer the first option, I think we all know I am still wearing my L plates when it comes to Frequent Flying and It's Benefits. But I do concede that whilst there exists opportunity - there will always be opportunists. If Velocity made it possible for people to exploit the system, then the system should be overhauled. I have no problem with loopholes being closed and eligibility being screened more closely. I also understand that cost cutting is necessary to coast through a financial downturn, (relative to the size of the company).

But this is not a nation of 300+ million people. This is Australia. Since when did generic letters and sterile responses become the norm for a young player like Velocity?

 

[Denali]

Yes. Similar amount to Denali and plans to book for 2018. I think that decision makes itself then.

Yep. Told hubby I might blow them all on SQ/get to Iceland some how.

 

[psi999]

Well there you go. If people have actually acted in a less than ethical way with their accounts - then I have little pity for them when they get caught.

Ditto. Zero sympathy to those doing the wrong thing but do feel for those innocently caught up.

VF have obviously monitored a massive increase of large balance transfers (turned into premium travel) hence the crackdown - which I'm not surprised with given recent massive AMEX signup bonuses (110k velocity platinum), NAB home loans (250k), Holden (up to 100k), ANZ/NAB/WBC credit cards etc points have never been easier to earn & sell in bulk.

Personally holding a 1.25M+ VFF balance having to compete for premium seats is hard enough without also having to compete against others blatantly doing the wrong thing.

My 0.02c anyway.

 

[trippin_the_rift]

This has been something I have been worried about - Im sitting on 600+K points and as I tell my husband, Im worried about having them all in one basket for when VA devalues them

Told hubby I might blow them all on SQ/get to Iceland some how.

Every savvy frequent flyer knows the best use of VA points is shifting them out to Singapore Airlines. 100% of mine points have seen this fate. Krisflyer is a superior redemption program in every way to VA. I'm a huge fan of SQ award seats and Singapore has done a beautiful job at making their redemption process clean, easy and satisfying to book seats. The online redemption process is lovely and the app is even easier. This only works if you want to redeem for international travel.

VF have obviously monitored a massive increase of large balance transfers (turned into premium travel) hence the crackdown - which I'm not surprised with given recent massive AMEX signup bonuses (110k velocity platinum), NAB home loans (250k), Holden (up to 100k), ANZ/NAB/WBC credit cards etc points have never been easier to earn & sell in bulk.

Personally holding a 1.25M+ VFF balance having to compete for premium seats is hard enough without also having to compete against others blatantly doing the wrong thing.

My 0.02c anyway.

T&C aside - any points which are sitting in a Velocity account, already represent earnings for them. If a member is selling them to someone else and booking a flight, this highlights a couple key messages:

1. There are people who want more points but can't get them. If Velocity flat-out sold points to members at a reasonable rate, it would eradicate a large % of these member's behavior and provide a new revenue stream for Velocity. Similar to how illegal marijuan_ sales in California plummeted after it was legalized. Gov now takes a clip and put drug dealers out of business in a day.

2. Velocity works on a perpetuating points model with long term breakage as a revenue driver. That is, so long as you remain reasonably active in earning, the points never expire. But these points decrease in value every day they're not being used. As you rightly point out there are more points being created into Velocity than ever before in history. Your chances of snagging a seat don't necessarily decrease as not everyone will be searching for a seat, nor want to redeem for flights.

This image represents how your 1.25M+ points are decreasing in value over time. This is not the case with programs like Krisflyer because of a hard 3-year expiry, award seat buckets and wait-listing.




Ultimately, suspending accounts of members who are operating outside the spirit of the program is a rookie mistake.

I've done innumerable modelling on these types of members in my businesses over the years (with more than 1 million members and billions of pieces of data), and every outcome paints a similar picture - it makes sense to keep these members on-side as the financial impact is greater by a factor of 1.8x over the weighted average of the average persona in a similar customer segment.

Suspending legit members is even worse as it affects propensity models once member relationship tree has been established. This has a direct link to the effectiveness of p2p engagement where influential markers are paramount. Regression analysis will confirm this outcome.

So while Velocity may well be right in suspending accounts, in my experience there is far greater value in taking a different approach.

 

[anat0l]

Ultimately, suspending accounts of members who are operating outside the spirit of the program is a rookie mistake.

I've done innumerable modelling on these types of members in my businesses over the years (with more than 1 million members and billions of pieces of data), and every outcome paints a similar picture - it makes sense to keep these members on-side as the financial impact is greater by a factor of 1.8x over the weighted average of the average persona in a similar customer segment.

...

So while Velocity may well be right in suspending accounts, in my experience there is far greater value in taking a different approach.

This is an interesting observation. What kind of statistical strength does your average factor hold? For example, is there a significantly large spread? Can the average be biased or skewed based on particular demographic factors which may apply to Velocity?

This seems to contrast with the poster you quoted who feels a sense of injustice and rage against those members who cheat / defraud the system, and (in a manner similar to the biblical parable of the prodigal son) you're suggesting that Velocity would benefit financially to keep these customers.

Of course, even if some members believe it is unfair to have "cheats" in the system, they are unlikely to leave the FFP themselves as a result of that rage. The only way I can think it would make them leave is if the presence of cheaters impedes their ability to achieve their goals in the FFP, e.g. redeem premium seats. That said, there would need to be data (perhaps that is difficult to capture) that would show that the proportion of prized premium seats are garnered by those suspected as "cheating" the system. But that in itself wouldn't mean taking "cheaters" out of the system would make it easier to get those seats, as it may indicate faulty technique (or "luck") on the part of those who complain being unable to get those seats.

I would be rather surprised if those who are suspected of "cheating" significantly fall in the demographic with a propensity to lose their dishonest gains via breakage.

 

[Happy Dude]

Actually if you read the letter it isn't section 9... anyway that's another point.

But with your account suspended it also means your benefits are suspended as someone I know found out last week. got off the plane to find the email, nothing since but the following night was denied entry to the lounge as their status was reverted back to red. So they've had no actual explanation as to why or what is going on..

A better approach would be to rather than just suspend the account and you sit there and wait, would be to actually get the so called "breaches" and send them out when you suspend the account. As it stands, it's been nearly a week and nothing since the initial email saying the account is suspended with no explanation. Poor handling by VA....

Well I did write that before reading the letter. Now that I have read it, I'm not sure how Section 8.1 applies. Looks like a typo to me. 9.1 makes way more sense.

 

[Happy Dude]

Trippin: I dig your graph but it does imply that reward seats are actually increasing. Partial credit!

 

[Happy Dude]

Very easy.

First, those are both very quick processes. The imposition on your time relative to it preventing you from completing the intended activity is nearly minimal (unless the evidence is suspicious). Plus, you are offered the presumption of innocence in both cases.

That said, it's hard to compare what's happening with Velocity and the two examples you give. The two example processes you provide are thoroughly covered in legislation; the processes have been rather comprehensively (not completely!) debated over fairness, dignity, civil rights whilst still maintaining legal and process integrity (or trade-offs thereof). Given that Virgin run Velocity and they essentially make the rules, barring commercially unconscionable conduct (which falls under common legal frameworks), they are allowed to do whatever they want.

You've got the facts right as always Anatol, generally, but missed the point entirely. I was cheekily suggesting that some of those caught up here may actually be offended by having to prove something they're not.

There's absolutely no presumption of innocence at all with either of my analogies. You're legally sober enough to drive only after the breathaliser says so. Ditto no bomb residue. Decline either test and see how far your innocence takes you.

 

[basso]

Since when did generic letters and sterile responses become the norm for a young player like Velocity?

It's not a marketing communication.....It's a very matter of fact, this is ths situation type letter. No spin, just as it is. Maybe that's what;s upsetting people.

 

[anat0l]

I was cheekily suggesting that some of those caught up here may actually be offended by having to prove something they're not.

Well, perhaps they have a right to be offended. OK, silly suggestion - of course they do. But your point seemed to attempt to analogise with near accuracy the relationship between those proposed tests and this VFF process. I think you're calling it from a "due process" point of view, whilst I'm attempting to look at it from a fairness (as well as explain the subtle differences in the analogy).

I also have reports from some others who are going through this process; and before anyone criticises, some of them have genuine clean hands, so they probably have a good right to be rather confused as to why they have been subjected to this process.

There's absolutely no presumption of innocence at all with either of my analogies. You're legally sober enough to drive only after the breathaliser says so. Ditto no bomb residue. Decline either test and see how far your innocence takes you.

There is the presumption of innocence in both cases. If you refuse a blood alcohol test, you are not guilty of driving intoxicated. You can be found guilty of a disobedience misdemeanour.

If the refusal of the test were not codified as a law, then hypothetically if you were charged with driving intoxicated but in fact you were not intoxicated at all (you declined the test), you could take that to court and argue that you could not be convicted of driving drunk as that fact was not established.

The same with a bomb check. Just because you refuse a bomb check doesn't automatically make you guilty of carrying a bomb. Your refusal to a test would result in your being refused carriage; if you really had a bomb (whether you were going to catch a plane or not, let alone about to undergo a security check), you might be lucky to be alive.

 

[trippin_the_rift]

This is an interesting observation. What kind of statistical strength does your average factor hold? For example, is there a significantly large spread? Can the average be biased or skewed based on particular demographic factors which may apply to Velocity?

It's important to note I don't own or work for an airline, and the models I've run are on other loyalty/rewards businesses.
To remove the noise and work with robust data I used members who had been active and engaged in one or more attempts at gaming the system. For my purposes, this was anyone who had made a points transfer, points redemption or spent hard currency with our service. It's a broad range.

This seems to contrast with the poster you quoted who feels a sense of injustice and rage against those members who cheat / defraud the system, and (in a manner similar to the biblical parable of the prodigal son) you're suggesting that Velocity would benefit financially to keep these customers.

Velocity is not out of pocket except for if the consumer would otherwise have paid cash for the same ticket. Industry statistics show most 'loyalty fraud' redemptions are converted into digital goods and services with premium cabins next. Therefore the member likely wouldn't have paid cash for a revenue ticket anywy. If points were redeemed onto Virgin Australia flights, then VA actual profited from the exchange.

Of course, even if some members believe it is unfair to have "cheats" in the system, they are unlikely to leave the FFP themselves as a result of that rage. The only way I can think it would make them leave is if the presence of cheaters impedes their ability to achieve their goals in the FFP, e.g. redeem premium seats. That said, there would need to be data (perhaps that is difficult to capture) that would show that the proportion of prized premium seats are garnered by those suspected as "cheating" the system. But that in itself wouldn't mean taking "cheaters" out of the system would make it easier to get those seats, as it may indicate faulty technique (or "luck") on the part of those who complain being unable to get those seats.

'Cheating' is the wrong word. Remember, any frequent flyer point sitting in a Velocity member account has already generated earnings for the program.

There is nothing illegal, fraudulent or immoral. No 'cheater's, hackers or scams. The only alleged wrongdoing is the member activity was against what Velocity lays out in terms and conditions which they dreamed up themselves.

Not excusing whatever activity the members caught up engaged in, but once you kill off a member - they're gone for life. Along with their family, businesses, future employment, and a host of other worthwhile factors (see my last reply re: partners).

In addition to this, why not soft suspend the account and call the member?
Warnings? Was the member even aware this was against the terms?
Invite the member in for a chat about why they were engaging in activity which breaches the T&C and learn from what could be improved both on prevention and further developing the product.

I would be rather surprised if those who are suspected of "cheating" significantly fall in the demographic with a propensity to lose their dishonest gains via breakage.

I agree they probably wouldn't. Breakage is one of many revenue strategies.
I would, however, as a partner of Velocity, be concerned if Velocity is suspending accounts without proper due analysis. Partners (e.g., banks) are the ones paying for points to be in the member's account, and if the Velocity account becomes suspended, then my business with that customer is also in jeopardy.

I'm hoping we don't know the full story because it's not adding up from a business perspective.

 

[cove]

Velocity has great availability for coast to coast business class seats for redemptions when the other guy has zero. I have never done family transfers because my sons just use these points when they need them.

 

[pauly7]

1. The company is in deep financial cost cutting mode and I have been advised this is just one of their latest tactics internally to clamp down on waste.

Just one point, yes VA is in cost cutting mode, we all know it as we sit starving on their planes

But as others as have flagged, Velocity is a seperate company to VA now, as they have sold part of it off. They remain a majority owner but they have other shareholders who own Velocity who have their own agenda.
I've been told that the other group has been insisting that Velocity has grown 'a bit flubby' and needs a 'nip and tuck' so I suspect that it isn't just VA behind 'leaning' Velocity up...

 

[serfty]

...

There is the presumption of innocence in both cases. If you refuse a blood alcohol test, you are not guilty of driving intoxicated. You can be found guilty of a disobedience misdemeanour. ...

Not true in Victoria ... a refusal of a blood alcohol test is not a misdemeanor any more than driving under the influence is - in fact the base penalties for refusal can be more severe than those for driving under the influence.

 

[serfty]

It seems to me that with family pooling, having "Auntie Jean" "move" into your house for their once a year domestic trip so you can garner their points is costing Velocity in that those several hundred points would eventually expire otherwise.

It must have had a significant impact to the bottom, hence the tweaks to the relevant parts of the Velocity t&c's in the last year or so.

 

[Milefest]

Not true in Victoria ... a refusal of a blood alcohol test is not a misdemeanor any more than driving under the influence is - in fact the base penalties for refusal can be more severe than those for driving under the influence.

Indeed. In Queensland, refusing to take a breathalyser test faces a $4000 fine or 6 months in prison, in South Australia it can result in an automatic disqualification of your license. Penalties vary state to state but refusing to take one will result in a much more severe penalty.

 

[anat0l]

Not true in Victoria ... a refusal of a blood alcohol test is not a misdemeanor any more than driving under the influence is - in fact the base penalties for refusal can be more severe than those for driving under the influence.

Indeed. In Queensland, refusing to take a breathalyser test faces a $4000 fine or 6 months in prison, in South Australia it can result in an automatic disqualification of your license. Penalties vary state to state but refusing to take one will result in a much more severe penalty.

Alright so I got that part wrong. Oops.

But if you did refuse, what is the charge against you? I'd be very surprised if you refused a breathalyser test and the charge is automatically that you were driving under the influence. What would they establish as the BAL - the maximum?

Suffice to say the penalty may be greater than driving under the influence... to tie it back, at least the test you undergo for each is (more or less) the definitive breaker as to whether you are guilty or not, e.g. if you blow under 0.05 and the machine says this, in almost all case you are free to go. The 'test' VFF requires here is not clear cut - VFF decide in this case (they could very well refuse to read the stat dec and declare you guilty; that's not entirely fair, but you wouldn't be none the wiser on the actual process anyway).

 

[basso]

Just one point, yes VA is in cost cutting mode, we all know it as we sit starving on their planes

Except they haven't cut the meals - they never had them.

 

[Rigs]

I don't think this is particularly controversial. They probably allowed a bit of it but people love to go too far and ruin it. I get the feeling that those complaining the loudest might have something they are worried about.

 

[Deleted member 29185]

They tried it on with a couple of my friends - issued letter to terminate ..let's say after some legal professionals were shown the letters, a strongly worded legal letter was sent back. Within 12 hours all accounts were reinstated. Amateur hour as usual at velocity. Even for a SG member, they weren't shown any courtesy to be asked for an explanation. Just a letter saying your account and all your points will be gone in 14 days... pathetic.

I guess that's easier than carrying out that troublesome routine called investigating to establish the truth. They suspect, accuse and wait. If no argument is forthcoming, chances are the suspicion was correct. If a customer bites back, chances are no fraud was involved. Just plain laziness and a pretty coughpy way of dealing with your customers, but since when has VA really cared about what their customers think of them?