Last week, I wrote about a Department of Transportation (DOT) complaint that caught my eye, whereby a Virgin Atlantic Flying Club member reported transferring points to the program, then redeeming those points for a family member, and then having them arrive at the airport, only to find their ticket was canceled.
At first I wondered if there was more to the story, and if the person filing the complaint wasn’t telling the whole truth. However, over the past week I’ve received a countless number of reports of the same exact thing happening to others, so I think this is worth covering.
In this post:
Virgin Atlantic aggressively canceling tickets, locking accounts
Loyalty program fraud is a major issue that airlines deal with, given how big the world of miles & points brokers is (this primarily consists of people buying and selling points, or tickets booked with points, at a profit). Of course airlines are justified in trying to find these people and take action as appropriate. However, sometimes airlines get a bit carried away.
That brings us to what seems to be a major issue with Virgin Atlantic Flying Club at the moment. I’ve now heard several reports of people who have had their Flying Club accounts closed and tickets canceled for what should be totally standard behavior.
What makes me so confident that these people are telling the truth is how consistent the theme is between all the stories:
- People open up a Flying Club account and then transfer a sizable number of points from one of the major transferable points currencies
- They their first redemption is booking a ticket for someone else (either a family member or close friend) shortly thereafter
- The traveler then shows up at the airport, only to find that their ticket has been canceled, due to a decision by Virgin Atlantic’s fraud department, with no opportunity to get an explanation or appeal
I’ve gotta be honest — often I’m suspicious when I receive reports of airlines being overly aggressive with auditing, and all too often I find that there’s more to the story that hasn’t been shared. Over the years, I’ve gotten pretty good at figuring out which claims are legitimate, and which aren’t.
At this point, I feel pretty comfortable saying that Virgin Atlantic is being totally unreasonable here, because I’ve received so many reports with exactly the same claims.
If Virgin Atlantic has a reason to be suspicious, then it’s fair enough for the airline to pursue that. However, the way the airline is behaving crosses the line, in my opinion:
- If Virgin Atlantic is going to cancel tickets due to fraud, they should at least let people know, rather than having them show up at the airport and find out the hard way that their ticket was canceled
- Of all the reports I’ve received, never has the airline asked for any sort of explanation or documentation of anything, and for that matter, the airline has even refused to provide a specific explanation
What recourse do consumers have against Virgin Atlantic?
Virgin Atlantic isn’t the first airline to have an overly aggressive auditing department when it comes to people transferring points. It seems that some airlines go through phases, and I remember similar phases for Air France-KLM Flying Club and Emirates Skywards (though things seem to have calmed down at both programs).
It’s almost as if the loyalty team and the fraud department aren’t communicating with one another. The fraud department seems to be thinking “how suspicious, people are opening accounts, transferring points, and quickly booking tickets.”
In reality, that’s exactly what the airline is encouraging, by partnering with major transferable points currencies, and also offering transfer bonuses.
This sort of gets at the challenging grey area of loyalty programs. Loyalty program terms and conditions basically allow airlines to shut down your account for any reason they’d like, without an explanation. But I also think that wouldn’t actually hold up in any sort of legal system, when someone is transferring something of value to the program, does nothing wrong, and then has their ticket canceled and points confiscated, without explanation.
It’s kind of like when a valet says they accept no responsibility for damage to your car. Regardless of that claim, if a valet crashes your car while drunk, they’re going to have to take some accountability.
So, what can be done here? The first thing I’ll say is that I hope that Virgin Atlantic reads this, and really looks into the practices that it’s engaging in. I respect Virgin Atlantic and the folks working there, as it’s a great company. I can’t imagine that this is the experience that the airline wants people to have. What’s going on here is unethical at best, and I have to imagine it comes down to a breakdown in strategy between departments.
Beyond that, what can consumers really do?
- You can try to take the airline to small claims court, though admittedly for many people, that’s more effort than it’s worth
- You can file a complaint with the appropriate regulatory authorities, like the Department of Transportation (DOT), because this is obviously a deceiving practice on Virgin Atlantic’s part
- You can reach out to the credit card company that you transfered points to, in hopes that this will cause them to put some pressure on the airline
In the meantime, I’d certainly approach the Flying Club program with caution, at least if you open an account, transfer points, and make your first booking for someone else, which seems to be what triggers these fraud accusations.
Bottom line
Virgin Atlantic’s Flying Club auditing department has been busy taking things to the extreme, freezing accounts and canceling tickets with questionable tactics. Virgin Atlantic seems to be suspicious of people who open accounts, transfer points, and then book tickets for others. But there don’t seem to be any reasons for suspicion beyond that.
I’m bringing light to this issue because I hope it will put pressure on Virgin Atlantic to change these practices. I generally think of Virgin Atlantic as being a pretty ethical airline, but this is a step (way) too far.
What do you make of this Virgin Atlantic Flying Club situation?
Virgin Atlantic should be boycotted by anyone with a moral compass.
Their CEO, Shai Weiss, was a commander in the IDF and committed war crimes and contributed to genocide against the Palestinian people.
Boycott Virgin Atlantic, and boycott all Virgin Group companies.
BDS, some wild allegations without evidence is contemptible.
Put up or shut up would be one’s best advice.
It's Virgin Atlantic's program so they can do what they wish. I don't know the entire story so can't really comment but this seems to have only started recently for some reason. Was it because of the dynamic pricing? Who knows. Perhaps VS needs to change its program and try to mirror ANA (where you can only redeem awards for yourself and family members.)
Just as with Chase, the problem is the incentive structure for the leaders of the fraud team is such that recognition is earned by closing accounts . Chase progressively closed my personal and business accounts over a period of 13 years, always with the same non-answer response. If an airline did this to me I would sue on principal. I have the time and money to do so.
Chase insisted to CFPB they provided a...
Just as with Chase, the problem is the incentive structure for the leaders of the fraud team is such that recognition is earned by closing accounts . Chase progressively closed my personal and business accounts over a period of 13 years, always with the same non-answer response. If an airline did this to me I would sue on principal. I have the time and money to do so.
Chase insisted to CFPB they provided a reason, but what they gave was a range of possibilities ( “closed due to previous experience with a credit, investment, or other account”). At least I had CFPB to complain to b4 they were gutted.
My “ revenge” is succeeding in opening credit accounts once per year, quickly earning the bonus and transferring it out b4 Chase closes that account .
I also moved a 8 figure trust account from Chase Private and when questioned why, responded with the exact same language Chase provided me. I don’t think that succeeded in doing anything other than making me feel good.
Likewise affected and being stonewalled with impunity by Virgin after a no-notice cancellation and airport stranding. Ingredients for a class action here? Waivers, arbitration clauses in T&Cs can be invalidated when the company is clearly acting in bad faith..
They can hide behind AML and call it a day.
Opening a new account, transferring points and booking for someone else definitely looks a little suspicious but it also it is a very common chain of events that many people do legimitately.
Virgin seem to be acting like there is no possible way these bookings could be legitimate which is dumb.
I am planning to transfer and book tickets for my kids/spuse (same last name)
Have you seen this happen with people with same last name ?
Yes, sadly.
I get it that frequent flyer fraud is a real issue.
But you would think the bare minimum an airline should do is reach out to the person they have suspicions of and get some context and then if the airline still thinks its fishy TELL the customer the ticket will be cancelled.
That's not recommended practice for anti-fraud.
And might not even be allowed if concerns are AML related.
Right or wrong, the bias is to assume the perpetuator(s) are potentially organized crime or funding terrorism.
The topic is loyalty programs. Would it be bad to ask accounts to demonstrate "loyalty" by redeeming at least x% of miles for the direct benefit of the account holder ?
Like first booking needs to include the account holder and subsequent bookings must include account holder for at least 1 in 10 tickets.
That, or airlines need to accept they are not really doing loyalty but minting currency, and secure their system...
The topic is loyalty programs. Would it be bad to ask accounts to demonstrate "loyalty" by redeeming at least x% of miles for the direct benefit of the account holder ?
Like first booking needs to include the account holder and subsequent bookings must include account holder for at least 1 in 10 tickets.
That, or airlines need to accept they are not really doing loyalty but minting currency, and secure their system accordingly. Will we have an American Airlines passport in the future or get salary paid in Sky Pesos ?
Iberia is doing the same thing, although they do send and email informing about the cancellation, yet no explanation whatsoever.
Alaska Airlines similar experience. Wife and I had already purchased flights. Later 2 friends decided to join when I offered to get the flights. They had points of their own so they bought the outbound flight to Dom Rep. I bought the return thru Alaska on American. No notification of any issue until they arrived at airport. Cost $1400 to get them home. Alaska fraud dept was horrible to deal with. In the end I...
Alaska Airlines similar experience. Wife and I had already purchased flights. Later 2 friends decided to join when I offered to get the flights. They had points of their own so they bought the outbound flight to Dom Rep. I bought the return thru Alaska on American. No notification of any issue until they arrived at airport. Cost $1400 to get them home. Alaska fraud dept was horrible to deal with. In the end I don't mind them keeping a close eye on things, as long as there is communication and the opportunity to correct any suspicion before simply canceling or denying boarding.
Can you tell us if these cancellations are just for virgin flights or partner flights as well?
It doesn’t matter
We made a booking on Virgin Atlantic in February for our family to fly next December. Is there any way to determine if we've been targeted by this beyond showing up at the airport and being denied boarding? This would really be an awful situation and I can't believe Virgin would put people through this, obviously could hurt their brand significantly.
Ben, your post reads so much like many of my posts over the past year! Just replace Virgin Atlantic with PC Optimum and you have the issues Canadians have been dealing with for well over a year with one of our largest shopping programs.
In my experience they cancel a lot of last minute bookings, and also if you enter your name wrong on your cc.
A month ago I transferred 20K miles to Turkish to buy a ticket for a refugee from the Moldova power blackout who had used up his 90 days in Italy and was headed to Istanbul to stay with friends there. When he tried to check in at Milan this morning, they would not allow him to board unless he told them the last four digits of my credit card number. I was asleep in the...
A month ago I transferred 20K miles to Turkish to buy a ticket for a refugee from the Moldova power blackout who had used up his 90 days in Italy and was headed to Istanbul to stay with friends there. When he tried to check in at Milan this morning, they would not allow him to board unless he told them the last four digits of my credit card number. I was asleep in the US, and my phone was turned off. The only recent contact from Turkish was a text to me, notice of change of seat assignment, a couple days ago. He was not able to check in online because they wanted to see his passport first.
So, no good deed goes unpunished. But it's not just Virgin Atlantic. At least I learned to stay away from Turkish. The ticket could not be booked online; the phone call to book it had taken 15 or 20 minutes. The call to customer service today took another 15 or 20 minutes, just to get them to change it to an open ticket (no flights available until Monday, they said; it's Easter, which I suppose makes a difference in Italy). They weren't interested in helping book another flight, they just wanted to help me file a complaint form.
Turkish will usually tell you when you book over the phone that the credit card will need to be shown at the airport.
It's generally common knowledge to always have the card or a copy of the card that is used to pay for an airline ticket, especially internationally...... I think for the most part anything that is "pre-paid".
Most of my travel purchases these days are made by virtual cards, there's no physical card to show no matter how much I'd want to. It's stupid anyway - they can identify me using my passport, which is far more reliable than some credit card.
Virgin Atlantic has a CEO who served as a tank commander in the IDF. Who has been part of the killing and genocide of the Palestinian people.
It should therefore come as no surprise he oversees a company that lacks a moral compass, gaslights its customers and falsely accusing them of fraud.
There is no genocide in Palestine, except the attempted genocide of Jews by Hamas.
Didn’t know that! Thanks. Security will be good then. Even more reason for me to fly Virgin.
Virgin as a UK airline is under UK261. This would considered a last minute denied. They are required to reroute the passenger or pay for their rerouting if they refuse to provide one and 520 Pound as compensation. I assumed those bookings are confirmed. All they have to do is to get a notarized letter from the account holder stating he/she made the booking for the passenger.
This. would love to see someone try this and see how it goes.
It's an interesting point. I looked again at 261 and I does place an obligation on the airline to notify you that your reservation has been cancelled. BUT denied boarding is permitted where your travel documentation is inadequate (which could be argued if your ticket breached the FFP conditions). So it's not as simple as it looks - but would be an angle.
Of course the other point is that the original story wasn't...
It's an interesting point. I looked again at 261 and I does place an obligation on the airline to notify you that your reservation has been cancelled. BUT denied boarding is permitted where your travel documentation is inadequate (which could be argued if your ticket breached the FFP conditions). So it's not as simple as it looks - but would be an angle.
Of course the other point is that the original story wasn't a flight to or from the UK. It was to the EU so 261 would apply, but many cases will be redemption which don't fall within scope.
I did this and was successful in getting the £520 per passenger EU261 compensation but not the account reinstated!
Airlines can do anything they want with their miles whenever they want. You don't own them.
Just ask anyone caught up in the AApocolypse back in '19 and '20.
Except that when they use them as legal consideration for entry into a contract of carriage, it becomes a lot more complex than "My miles, I can do what I want!"
I was lucky enough not to get hit by that, but again I only used IIRC one (1) mailer sent to someone else and didn't churn the AA cards too aggressively. Only 360k miles or so over a 2 year period, and I'd used over half of them by the time of the AApocalypse.
That's why i would never buy miles unless I could use them immediately.
Ben can you give a little bit of background on how people actually do exploit airlines' FF programs, and why they can't put in place simple restrictions to prevent it? Is it transfers of miles happening? When is it actually fraud versus trying to make money off of the program versus people incorrectly caught out redeeming for the first time? It seems odd that the airline can't change policies or have better tools for stopping this kind of thing.
The short version goes something like this:
I put up a website selling cheap last-minute airfare and aggressively advertise it. When someone books a flight, I either pay a Virgin Atlantic customer to book that flight, or I just log into a compromised account and book the flight. With a bit of luck, nobody notices until the flight has been taken. If somebody does notice, I vanish into the ether, and my customer is left holding the bag.
@Aric and as I am guessing you already know, that practice is extensive enough to potentially be a material number (I am intentionally not using specific number) on a quarterly basis for an airline that finds it was the most unlocked car in the parking lot.
I worked with a company that was so obsessed with preventing fraud that it caused more financial damage to itself by fighting that fraud than the value of that fraud. This will likely be the same case. Piss off hundreds of legit customers who could've kept bringing you money for every one actual fraud you prevented.
Only a guess, but it has the feel of a situation where AML concerns may have been raised.
Time for cards to have points chargebacks to the airlines now
This is the new brave world of bots, AI and software taking place of human beings. That entire process likely never saw a human eye and was all based upon "machine learning." The number of human beings actually tied to such non revenue/non profit activity is small. Usually grossly undertrained, underpaid and over stressed people that aren't paid enough to care what the bot did.
Truthfully, use your miles only for yourself.
Doubtful. Virgin's IT infrastructure is behind the times. If anyone starts deploying those kind of advance AI analyses it will surely be United.
"Truthfully, use your miles only for yourself."
Lol no thanks -- being able to make business class purchases for people who would never do that for themselves is a pretty nice gift, and it usually works out just fine. I think the biggest issue here is that the people in question...
Doubtful. Virgin's IT infrastructure is behind the times. If anyone starts deploying those kind of advance AI analyses it will surely be United.
"Truthfully, use your miles only for yourself."
Lol no thanks -- being able to make business class purchases for people who would never do that for themselves is a pretty nice gift, and it usually works out just fine. I think the biggest issue here is that the people in question never had personal flight activity with VS prior to making their "gift" award redemptions.
Agree that this is doubtful.
Sounds more like someone in senior mgmt got embarrassed and decided to take charge of the situation in an overly simplified way.
A story that pre dates AI. That probably also happened when the pyramids were built.
When there is fraud involved, an airline would never give you specific information. And they should not - no companies should. That is one of the easiest ways for fraudsters to learn.
If an airline is 100% convinced that fraud is committed, it wants the fraudsters and all associates to be inconvenienced so giving advanced warning would be counterproductive.
There was no fraud involved, hence the outrage. Nothing that was done here is against terms of service or even that usual.
You know that and I know that, however . . . wait, no, we don't know if fraud was involved. It likely was not but if it was fraud, it would look exactly like this, wouldn't it?
I completely understand why people are so upset and Virgin should give ample warning as soon as they detect the fraud, but the actual basis for cancelling the tickets seems reasonable. Brand new account, booking for someone...
You know that and I know that, however . . . wait, no, we don't know if fraud was involved. It likely was not but if it was fraud, it would look exactly like this, wouldn't it?
I completely understand why people are so upset and Virgin should give ample warning as soon as they detect the fraud, but the actual basis for cancelling the tickets seems reasonable. Brand new account, booking for someone else certainly looks like they might be selling their points or the points might be stolen.
In my experience, it almost never matters whether the triggering event was true fraud or just consumer creativity.
It comes down to whether executive management expected it or not. And how embarrassed they got when others found out.
I find it frustrating how so little has changed since being officially brought into SkyTeam. I was hoping to see an improved app (I know Delta's is terrible, but VS is even worse) and much easier cancellations/changes... but really nothing has changed. Still have to call the afterhours call center where barely anything can be accomplished.
Love the lounges and onboard experience, but everything else with VS is a headache.
I find this especially galling because if they wanted to, they could make rules (like some Asian carriers have) saying redemptions must be for those who share the last name of the accountholder or whatnot. I wouldn't like it, but it would preclude any such issues. Or say that redemptions must come at least 30 days after making an account, etc. etc.
There are plenty of options which aren't unilateral ticket canceling
Tbh, sounds like a typical over correction that often comes down from non technical executive management after an embarrassingly negative internal audit finding makes it to board meeting-level.
Not saying that's what is happening here. Just that it rhymes with similar counter productive knee-jerk policies i have seen at other companies.
Looks like we can adapt the Fight Club formula to this situation. Should Virgin Atlantic "recall" their currently agro anti-fraud procedures? The formula becomes:
Take the number of Flying Club members flagged by the current fraud detection system (A), multiply by the false positive rate of said system (B), multiply by the total cost per false positive (C). Where C includes:
* Lost customer lifetime value
* Negative PR damage and brand erosion
Looks like we can adapt the Fight Club formula to this situation. Should Virgin Atlantic "recall" their currently agro anti-fraud procedures? The formula becomes:
Take the number of Flying Club members flagged by the current fraud detection system (A), multiply by the false positive rate of said system (B), multiply by the total cost per false positive (C). Where C includes:
* Lost customer lifetime value
* Negative PR damage and brand erosion
* Potential regulatory fines from DOT complaints
* Cost of handling customer service issues at airports
* Legal expenses from potential small claims cases
A × B × C = X (Total cost of false positives)
If X is less than the savings from prevented fraud, they maintain current practices. If X exceeds fraud prevention savings, they should "recall" and fix their system.
Just another reminder that we as individuals do not matter. Only in aggregate do we matter.
That all makes tremendous sense.
Unfortunately it is much much more common to see anti-fraud actions and inactions driven almost solely by executives' emotional reactions to specific events.
@Ralph
So true, and not just re anti-fraud.
I was once given a hard time for an expense claim which included a flight I did not use (a business emergency meant the trip was delayed)
The fact that the unused ticket plus the one I did use totalled less than a flexible ticket would have cost was apparenlty irrelevant.
When I got to the staqge of writing and approving expense claims I did not repeat that mistaken logic.
@It's Cynical Corporate Math - Let's See How This Goes
That's not how Fight Club works.
1.You do not talk about Fight Club.
2.You do NOT talk about Fight Club.
Appreciate the follow up.
I’ll take this as a warning, and not book award tickets via VS for anyone not traveling with me.
I wonder if VS is having a huge problem with account hacks since they implemented the new two factor authentication. My FC account was hacked in early March with multiple same day redemptions from LHR to various places in Africa going unnoticed by VS. They may have problem and have "over corrected" in an effort to combat it.
You tell 'em, Ben! I hate Gary Leff, but, like a broken clock right twice a day, he makes a good point that the optimal amount of fraud is not zero. False positives hurt your business more than you can measure because they also hurt your brand and lead to posts exactly like this.
On the broader point about "chilling," I've been told throughout my schooling that I need to chill and put down the...
You tell 'em, Ben! I hate Gary Leff, but, like a broken clock right twice a day, he makes a good point that the optimal amount of fraud is not zero. False positives hurt your business more than you can measure because they also hurt your brand and lead to posts exactly like this.
On the broader point about "chilling," I've been told throughout my schooling that I need to chill and put down the Federal Rules of Evidence on a Friday night, but guess what. I'm now a $6MM/year equity partner and the losers who told me to chill are not making even $600,000/year. Not only do they not have money, they don't have social cachet.
You do need to chill, bro. There are things money can't buy. Bragging about your income out of nowhere continuously on an unrelated blog, probably says a lot.
Being insufferable to gain social cachet, works every time!
I feel like I'm one of very few people here who appreciates Arps' sense of humor. Keep it coming, I say! It's more refreshing than the TD mocking.
@Redacted - agreed. Unlike TD, @Arps is clearly performance art and is so over the top that it's clearly meant to be comedic as well.
People (poorly) writing completely irrelevant fake shit, is amusing to you? That's the weirdest part of all.
Hi @ImmortalSynn - what's weirder:
a) Being momentarily amused by @Arps's Andy Kaufman level of dedication to an absurdly over the top internet persona on OMaaT comments sections
b) Getting so upset about Arps's internet performance art that you take time to lash out at those who are amused
"Money can't buy you class." - Countess LuAnn de Lesseps.
There are probably a few contributors to this board who pay more capital gains tax than that every year. Bragging about money is bad manners, and immediately betrays you as nouveau riche. You should desist, or move to Dubai where people are impressed by vulgar declarations of wealth.
The difference between Arps and Tim Dunn.
Arps is authentically a fake.
Tim Dunn is faking to look authentic.
Esk, some contributors really get under your skin. Your obsession with TD will turn you old and grey before your years bro.