US DOT launches inquiry into the major US frequent flyer programs

[Mattg]

https://www.reuters.com/business/aerospace-defense/dot-orders-largest-us-airlines-answer-questions-frequent-flyer-programs-2024-09-05/

The U.S. Transportation Department (DOT) said on Thursday it is opening an inquiry into the four largest U.S. air carrier rewards and frequent flyer programs to ensure consumers do not face unfair, deceptive, or anticompetitive practices.

Transportation Secretary Pete Buttigieg sent letters to American, Delta, Southwest (LUV.N), opens new tab and United Airlines (UAL.O), opens new tab, ordering them to provide records and submit reports answering detailed questions on their rewards programs.

The Department is reviewing how consumers are "impacted by the devaluation of earned rewards, hidden or dynamic pricing, extra fees, and reduced competition and choice."

Reuters first reported in December that DOT had begun scrutinizing the frequent flyer programs of major U.S. airlines for potential deceptive or unfair practices.

I'm personally very happy to hear this. I've been a United MileagePlus member for years and have been pretty miffed that United keeps increasing award costs (significantly, too) without any notice. It means the miles I've accrued are suddenly worth half. I don't think most consumers would find this acceptable, if they realised what was going on.

 

[Doctore1003]

A lame duck admin in a nation with some of the weakest consumer protections … I wouldn’t get my hopes up.

 

[cove]

Trying to stop devaluations is worth a shot.

 

[kyle]

I'll like to see the points earned to retain their value based on the value at the time of earning! If there's a devaluation, then more points should be given to compensate. Fat chance!

 

[justinbrett]

The credit card reward schemes (and sign up bonuses) are out of control there, which is the main thing fuelling this. There is also some government scrutiny over merchant fees (which fund the schemes) and many points hack youtubers (in the general sense, not the company) are getting their viewers to sign petitions for the government not to touch these fees (knowing that would diminish their rewards).

 

[levelnine]

Much ado about nothing.

Sign-up bonuses are increasing quicker than devaluations if you know what you're doing. One of my current US cards will net a welcome bonus of 475,000 MR, which convert 1:1 to all major airline programs, so equivalent to 950,000 - 1,425,000 MR in Australia.

The main losers are people without access to the US credit card market.

 

[dajop]

The main losers are people without access to the US credit card market.

Which probably is the vast majority of AFF, although most are probably not heavily invested in the US based programs.