By Ed Perkins

Do you need government protection for your frequent flyer mileage? Sen. Charles Schumer (D-NY) thinks you do; he called on the U.S. Department of Transportation to take a look into whether the government should require more transparency and more equitable treatment for accrued miles. And, as you might expect, the interested parties are already trotting out the expected arguments.

Schumer focuses on two issues: Whether the airlines' frequent flyer business practices are deceptive, and whether you really own your miles. As usual in Washington, of course, they're "hard earned" miles -- when was the last time anyone labeled something of value that wasn't "hard-earned?"

At any rate, Sen. Schumer thinks the airlines should warn you when your miles are about to expire, early enough for you to do something about it -- something that won't cost you as much as renewing expired miles. As he notes, although miles originally had no expiration date, now different airlines have different periods, and they do not warn you in advance of expiration. "Playing games with frequent flyer miles takes money out of people's pockets, plain and simple," says Schumer. "It's annoying, it's unfair, and it has to stop."

Of course, you're not helpless. If you want to track your miles, several online sites will keep tabs, including Mileport (www.mileport.com) and MileTracker (www.usatoday.deskport.biz), both free, plus several other pay-for-membership sites. And many of you routinely reset each airline's mileage clock by adding a few miles to your account -- a good year-end "checklist" item.

To me, the more intriguing of Sen. Schumer's questions is the ownership of your miles. Currently, you don't really own them at all -- the airline allows you to use them, but it still owns them. It can arbitrarily change program rules and even cancel your miles whenever it wants, without your right of legal recourse. The programs' fine print is very specific about this.

Originally, when you earned miles almost entirely by flying, this made some sense: The airline gave you the miles as a bonus for being a good customer. But these days, when the airlines sell more miles than they award for flying, claiming ongoing ownership is questionable. If you go online, for example, the airlines' Websites urge you to "buy" more miles, for a stiff price, not "rent" or "lease" them. You buy miles from credit card banks when you select miles rather than cashback awards. Although clearly a lawyer's question, it appears to me that the airlines at least strongly imply that your miles are the result of a bona fide sales contract, not some sort of elaborate "you buy it but we own it" shell game.

If you're a very frequent flyer, the ownership issue doesn't matter much to you: Presumably, you fly enough to keep your account(s) current. But if you need to take two or three years to gain enough in any one line's program for an award -- or if you stop flying for a year or two -- the ownership issue could be very important.

The airlines take the eminently predictable line that Schumer's idea is yet another case of unwarranted government interference with business. My take, however, is that the airlines, as usual, are shooting themselves in the foot. They've ignored an increasingly troublesome issue until the point that many affected consumers -- even pro-business ones -- have concluded that the airlines are unable or unwilling to fix their own problems. The situation is much like the case of extended tarmac delays: After years of saying, "Let us fix it," then not fixing it, they're likely to get a law saying they have to fix it.

I've said all along that frequent flyer inequities annoy far more consumers than tarmac delays, and others seem to be agreeing. Do the airlines still have time to fix the problem before the government steps into the fray? I'm not sure; I hope they will, but history suggests otherwise. Meanwhile, don't forget to keep track of your miles and add more when needed.

 

© Ed Perkins

Travel | Frequent Flyers Need a Government Bailout