DOT and CFPB Put Airlines’ Frequent Flyer Programs in the Spotlight

It could lead to changes down the line

DOT/CFPB hearing
Pete Buttigieg, US transportation secretary, speaks during a hearing in Washington, DC, US, on Thursday, May 9, 2024.
Tierney L. Cross/Bloomberg via Getty Images

This week, two U.S. government agencies teamed up to investigate frequently flyer programs — and the rsult could have an impact on how you travel. The agencies in question were the Department of Transportation and the Consumer Financial Protection Bureau. As The Points Guy’s David Slotnick reported, the entities represented a wide range of the travel industry, including representatives from airlines, unions and banks.

This hearing included statements made by the heads of both agencies, which included CFPB director Rohit Chopra explaining the reasoning behind holding them to begin with. “These programs have evolved from many years ago, from rewards for the airlines’ most loyal customers to a multibillion-dollar currency market where credit card companies and airlines buy, sell, convert and issue miles and points throughout sectors of the economy,” he said.

The CFPB has also been exploring credit card reward programs more broadly, and recently released a report about consumers’ issues with said programs. The report addressed the way that accumulated points or miles can sometimes lose value due to corporate decisions, with criticism of the ways “airlines and other merchant partners have announced changes to loyalty programs associated with co-brand cards to restrict access or increase requirements for achieving preferred status.”

This report also highlighted the challenges some consumers have faced when redeeming points for travel. “Converting credit card points to airline miles or hotel points can be one of the costliest redemptions for issuers to provide,” the agency wrote in their report.

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Both agencies have emphasized consumer protections recently. See also, the Department of Transportation’s recent guidelines requiring airlines to refund travelers cash in the event of a cancelled flight. As The Points Guy reported, this week’s hearing was more informational than anything else — but it wouldn’t be surprising to see it leading to further action down the line.


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