Why All Lufthansa Points Transfers Are Suspended

Filed Under: Lufthansa

A couple of days ago Tiffany flagged how something strange is going on with Lufthansa Miles & More points transfers. Those trying to transfer points from Marriott Bonvoy to Lufthansa have found that the transactions haven’t actually gone through, and instead have stayed in limbo.

We weren’t sure what exactly was going on, and if this issue was specific to Marriott Bonvoy, or what. Well, we now have a better sense of what’s going on.

First of all, since publishing the first story, a Marriott representative issued the following statement to us:

“We have had to suspend Lufthansa Miles & More as a Marriott Bonvoy points to miles transfer partner at the request of Lufthansa Miles & More in connection with German regulations. This suspension is not specific to the Marriott Bonvoy program and other Lufthansa Miles & More hotel partners have taken the same action. Points to miles transfers from member accounts were made through May 20, 2019 and any transfers occurring after that date will be returned to the member’s account. We will share a timeline soon for when we expect the points to be returned. We are working to ensure all pages on our digital and mobile sites reflect this change in the status of Lufthansa Miles & More. We apologize for the inconvenience to members and look forward to providing updates about Lufthansa Miles & More once we have them.”

So as it turns out, points transfers to Lufthansa Miles & More from all programs are suspended right now. Lufthansa claims that this is due to German regulations, so what exactly is going on?

YHBU has a statement from Lufthansa Miles & More about what’s going on, translated from German into English with Google Translate:

“The background to this is that Miles & More must ensure that its services do not constitute an e-money transaction subject to authorization in the meaning of the German Payment Services Supervision Act (ZAG). We can not completely rule out that the ability to earn loyalty points from a partner company abroad directly and for a consideration could be considered as an e-money transaction. To make sure that this is impossible, all programs that open up this possibility are suspended. We can not yet estimate how long our assessment will take. This measure protects both the interests of our participants and those of our partner companies and, last but not least, ours. Payback is not affected, a conversion is still possible.”

Due to German laws that were instituted last year, further types of transactions are subjected to authorization requirements under the Payment Services Supervision Act.

This means that payment initiation services, which are services that trigger a payment transaction at the customer’s request, and where the account accessed in the process is held by a different institution, are subjected to new restrictions.

The question here seems to be whether a Miles & More mileage transfer is considered an “e-payment.” While you might only be exchanging points currencies, presumably some money is changing hands between companies, and therefore it may qualify.

Up until now it has been business as usual for Lufthansa, and they seemingly have continued to allow mileage transfers. However, with a lawsuit filed against Lufthansa within the past few weeks, it seems they’re reconsidering that.

So while Lufthansa Miles & More works on figuring out how exactly the regulations apply to miles, all points transfers to Miles & More are suspended…

I’ll post an update once this is resolved (or once we know it won’t be resolved).

Comments
  1. I pray that LH is losing in court. I’m so done with them. Already shifted my loyalty to another carrier. As soon as we are legally allowed to cash in our miles with LH, I will make use of it and never board a “Kranich”-plane again. Spohr: shame on you!

  2. Lucky, did you read my Ask Lucky post about Iberia expiring miles? If you mix old miles with new miles, the new miles expire at the same time as the old miles. I just lost 11,500 points I transferred from Chase 4 months ago. I’m on my 3rd call and 7th email and they aren’t budging. It’s pretty f’d and your readers should know so they don’t loose points.

  3. Interesting story. If anything it perhaps opens up more space in the interim with Aeroplan etc as people are unable to transfer from hotels or credit cards to LH directly. I scored an F four days out from FRA-IAD this week and just landed a few hours ago. Honestly, IAD rarely ever comes up for me so was wondering. And there were only three people in the cabin which is rare for Washington.

  4. Barclays Miles&More credit card is affected as well? Or not? I have one, and so far have not received any info/letter/email/warning from them, so I wonder if it’s just a matter of time and if I should even bother putting any spend on this card or maybe just outright close it?

  5. A repeat from another post. To stress how serious this issue potentially is. I side by LH just to safeguard the future value of my assets. Careful what you wish for.

    Hah, Germans trying to ruin miles & points for the whole world.

    Once it becomes cash, the IRS (and each country’s equivalent) can easily justify it as income.

    Loyalty Programs will be under the Patriot Act, Money Laundering Act, Currency control, etc. Makes it easier than ever for Big brother to now see where, when, and how we go around. Also let’s Big Brother seize without notice or fair trial.

    This is the 4th Reich attacking the 21st century free world capitalism.

  6. The point is, that LH is sued in a German court by a customer who has millions of miles (really, not literally) in his account and wants to have a cash withdrawal with the arguement, the miles are “e-money” related to Ger€an and EU laws…

  7. Credit card miles from LH cards should not be affected, as these are not transfers, but earned direcly.

  8. I think the issue is you can buy points in those programs for cash and immediately transfer to Miles & More – so this is much closer to something having a cash value than something you just earned say flying butt-in-seat miles on LH

  9. This could imply all points transfer to European based airlines and hotels will be blocked in the future…

  10. From how I understood it, the issue is not the transfer but the fact that those programs (e.g. Marriott) let you buy miles and that could be considered an e money transaction. Some dumbass sued Lufthansa because he wants his ~700k miles paid out as ~21k€ in cash and argues that this should be possible under the e-money act because you can buy them from another loyalty program and transfer them, effectively making M&M miles e-money. This is what happens when you sue someone before thinking about the consequences… At least some programs (like payback) are not blocked from transferring because you can’t buy points there.

  11. @Sam G

    There is no issue here. Everyone knows that there are unofficial value to points and miles, for now mostly for accounting purposes.

    It is just a matter of time before they are considered cash and income. Dynamic pricing that reflects cash price even support that there is a value. (Hello Delta)
    Eventually it will be regulated.

    This German (I assume, could be Swiss) A**H** just made the process 10 years faster.

  12. That’s not the only issue currently with Miles & More, since they have launched a new website design mid-April even simple steps can become painful and frustrating.

  13. Based upon this, does it mean that under German Law we would be able to sell our Lufthansa miles without repercussions?

  14. @Eskimo – the status of miles under US law as, effectively, a discount on future purchases is well established in legal precedent. Changing that status would likely require an act of Congress – the IRS can’t do it with a regulation.

  15. @Endre: can you be more specific as to why? This is just a completely unjustified rant. I’ve been flying with them for many years without a single issue.

  16. @Chilangoflyer: as far as I know the person suing has about 700.000 miles. That’s far from being “millions”.

  17. i am thinking about the complete opposite: so one day we can ask Delta to buy back our miles in cash? lol

  18. And also a great way to ensure your miles never expire again particularly if you have a small balance that you can’t use – simply cash it in 🙂
    There is always a downside and an upside

  19. LH miles are a complete scam. I hope they go under and this guy wins in court. Last time I used LH miles for a trip from the US to the EU they charged me $689 in taxes which was only $59 cheaper then actually buying the freaking full fare economy ticket! To add insult to injury, LH does not refund of the taxes paid in the event you need to cancel or change the flight but they have no issue refunding the miles back to your account! They really do deserve to go under, F* those greedy basturds!

  20. I am so mad at this and wish I have read this article sooner.

    I just transferred 50k worth of points from Amex to Bonvoy with the intent to transfer the rest of the points from Bonvoy to Lufthansa, but only to realize the carrier is no longer redeemable.

  21. Meh, I think you’re all a bunch of blowhards and I hope LH wins. I get incredible value out of my miles with last-minute LH F redemptions (sometimes 20c per mile minus taxes/fees).

    I want to know when this case will finally be over so I can begin transferring from Marriott again. Anyone have a timeline?

Leave a Reply

Your email address will not be published. Required fields are marked *