I recently wrote about the rules surrounding selling airline miles. Generally speaking it violates the terms of airline frequent flyer programs to buy & sell miles, but it’s not illegal.
Along similar lines, I think it’s worth discussing airline mileage brokers, which is a pretty big underground industry. I get questions from readers all of the time about whether it’s safe to do business with these companies, given how much they advertise online.
Often the way that mileage brokers market isn’t particularly straightforward. Some market themselves as offering discounted business & first class tickets, when in reality they’re just redeeming miles for your tickets. Others will outright sell you miles in your choice of accounts.
I should mention that this is different than some first & business class airfare consolidators. There are some legitimate companies that have access to discounted premium cabin tickets that don’t involve the shady business of buying and selling miles.
A fascinating look at the world of mileage brokers
Back in 2016, The Milelion published a fascinating post about the world of online mileage brokers. For this, he posed as someone who was looking to buy miles, and contacted five different companies. His goal was to see how they do business, how transparent they are, etc. Not surprisingly, the experiences varied by company.
Reading the correspondence is fascinating, so if you have time I’d recommend taking a look at that story. For example, one of the brokers claimed to have access to more than 500 Singapore KrisFlyer accounts. Wow!
My take on mileage brokers
Let me start by saying that personally I wouldn’t do business with mileage brokers (and for that matter I’ve never done business with a mileage broker). Buying airline miles from someone violates the terms & conditions of frequent flyer programs, and you could potentially find yourself in a bad situation if things don’t go as you’re hoping.
A couple of things to note about mileage brokers:
- In general I think most mileage brokers are running “legitimate” businesses, in the sense that they intend to deliver on what they’re promising, and they’re not looking to rip you off; however, if things go south, I doubt you’ll hear from a mileage broker who you already paid
- Using mileage brokers is extremely risky, and you could have your tickets canceled and frequent flyer accounts closed, as airline auditing departments are getting increasingly aggressive and savvy about audits, and know exactly what to look for
How do mileage brokers do it?
The above are the basics of how it works from the customer’s perspective, but how do the brokers actually get the miles? There are several different methods, and they vary based on whether the broker transfers actual points to you, or whether they book a ticket out of an account for you (the latter is much more common nowadays):
- Some will buy accounts with a lot of miles in them from consumers, and then resell them in the form of promising specific tickets; in this case they’re typically just redeeming miles out of those acquired accounts
- It’s my understanding that in some circles mileage brokers go door-to-door, have people apply for credit cards, pay them a fixed amount for the miles, and then fully manage their accounts
- Some use transferable points currencies, though many of the major currencies have added restrictions when it comes to points transfers, specifically in order to avoid this kind of activity
- Some will just buy miles at a discount when they’re on sale, and then resell them at a profit in the form of promising a specific type of ticket
Like I said, I recommend steering clear of all of these. The reality is that if you’re maximizing credit cards and taking advantage of buying miles when there are promotions, you should have some fantastic premium travel opportunities for pennies on the dollar.
Personally I don’t recommend using mileage brokers, though given the number of questions I get about this, I figured it was worth a post. If you want to earn lots of miles without actually flying, I recommend buying miles directly from loyalty programs when they’re on sale, as that can be a great way to score a premium cabin ticket at a discount.
While buying miles from brokers typically isn’t illegal, it comes with lots of risks, and also violates the terms of loyalty programs.
Have any OMAAT readers ever purchased miles from a broker? If so, what was your experience like?
Ben has this turned upside down. I think the better question for this audience is who are the reputable brokers you can sell to, not the other way around.....and tell how that process works.
Who would ever try to scam a airline? ;)
NO. That is the answer to your question. Next!
It was quite popular here in SE Asia with Citi Thank You transfer partners. Until recently, you could transfer your Citi points to five airline partners by just entering the FF number of any person. But now Citi transfers points only to your FF account. Though there are still some banks (KTC, SCB) where they do not check whether the cardholder matches the FF account.
Oh, no, I'd never buy miles or a miles-procured seat in such a way. I tend to agree that most intend to provide what they are selling, but the thought of relying on them for refunds or the time and effort to deal with flight changes is just overwhelming. I just would not anticipate anything that looks like sufficient customer service if things go sideways on any itinerary.
Allen Pabst (Duane Pabst) of TA Travel Services scammed me for $1600 in 2013 after responding to an add on Craigslist. Charges were filed against him by the USAO, but I am not sure of the outcome.
After this experience, with a continued desire to travel comfortably, both physically and financially, I found OMAAT and Lucky. I never pursued a broker again.
Thanks for your support Richard.
Search US v Papst, March 17, 2016 for what happened to Duane Allen Pabst. Looks like he reached a plea deal to pay restitution and stay clean.
Lucky, it would be interesting to hear your thoughts on countries that allow the legal brokerage of miles, like Brazil.
The courts there ruled that miles belong to the consumer, so accounts can't be shut down for buying or selling miles. A pretty interesting industry has sprung up around that.
I wonder what the implications would be of somebody with a US based program that has their account registered there.