Several weeks ago, I wrote about a Department of Transportation (DOT) complaint that caught my eye, filed by a traveler against Virgin Atlantic. Essentially, the traveler claimed that Virgin Atlantic falsely accused him of Flying Club fraud, as he redeemed miles for family members, only to have his tickets canceled, his account shut down, and no refund offered.
Of course when we see just one of these stories, it’s hard to know who is telling the truth. But after writing about this, a countless number of people reached out to me, and told me similar stories. While loyalty fraud is a major issue, it seems pretty clear to me that Virgin Atlantic hasn’t been acting in good faith. Best I can tell, Virgin Atlantic gets suspicious when someone opens a Flying Club account, transfers rewards from a transferable points currency, and then their first redemption is for someone else. So along those lines, there’s an interesting update.
In this post:
Virgin Atlantic restores account, accepts no fault
Virgin Atlantic has responded to the DOT complaint. As you’d expect, the airline claims that it has done nothing wrong. The basis of this claim is that the terms and conditions of the Flying Club program essentially allow the airline to close accounts for any reason they’d like.
The airline also claims that it has tools that it uses to detect fraud, and that those tools suggested there was a “substantial likelihood” of the booking being fraudulent. However, the airline also states that it can’t publicly share why it thinks the booking may have been fraudulent:
VAA does not generally share publicly the methods or sources it uses to detect fraud and root out violators of its Flying Club Terms, and for good reason – doing so publicly would provide bad actors with information that would assist them in circumventing these procedures in the future. It is VAA’s policy not to share with external parties information obtained through its commercial fraud screening tools. Thus, VAA’s ability to defend its decision in public is severely restricted.
However, Virgin Atlantic has now restored the member’s Flying Club account and miles “as a gesture of goodwill.” As the airline explains in its response:
VAA’s decision to cancel the booking was justified in the face of the strong evidence gathered using multiple fraud detection resources. However, VAA recognizes Complainant’s frustrations associated with this matter. Solely as a gesture of goodwill to Complainant, VAA has reinstated Complainant’s Flying Club account to active status and restored all points that were in the account prior to the booking at issue.
Realistically, this is as close to admitting fault as you’ll find from an airline.
Virgin Atlantic adds new fraud procedures
Here’s the more interesting part of this response. Virgin Atlantic has committed to strengthen its tools for determining whether award bookings are fraudulent, while also creating an appeals process for those who believe they’ve incorrectly been accused of fraud. Per the filing:
Although VAA’s actions were proper, VAA has nevertheless decided to enhance and invest in an enhanced fraud detection tool to strengthen its abilities in this area, which will use AI and additional fraud markers, limiting human involvement. Additionally, VAA has enacted revised procedures to afford consumers who disagree with action taken by VAA on the basis of suspected fraudulent activity, loyalty abuse and/or a violation of Flying Club Terms to directly engage with VAA personnel from the Loyalty Fraud Team and present information that may demonstrate that no such fraudulent activity or breach of terms has occurred. VAA believes that these enhancements will strengthen VAA’s ability to appropriately detect and deter fraudulent activity in the future.
Honestly, this is the most we could hope for, and it’s a nice example of how going through regulators can sometimes lead to a better outcome. Not only did the Flying Club member get his account and miles back, but this complaint has caused Virgin Atlantic to actually change its policy for the better.
The airline introducing new technology to detect fraud (I’m a little skeptical of whether that will benefit consumers), but more importantly, members will be able to appeal these decisions if they believe that they’re incorrect.
Bottom line
As I wrote about a while back, Virgin Atlantic seems to have an issue with accusing members of fraud with its Flying Club program. While fraud with loyalty programs is absolutely a major issue, everything I’ve seen suggests that Virgin Atlantic has been taking things a step too far.
A traveler’s DOT complaint will now benefit everyone. Not only did he get his account and miles back, but Virgin Atlantic is introducing an appeals process for claims of fraud.
What do you make of this response from Virgin Atlantic?
Virgin Atlantic also seems to have been into blocking some bank card point transfers into Virgin Atlantic loyalty program accounts from some members who seemed to have been flagged by the airline for fraud even when the accounts were not blocked from points being redeemed.
Personally.. if that’s how Virgin does things, fsck Virgin, appeals process or not.
I had a similiar case with a German airline. Sued them. Made them pay for my replacement tickets on QR J, 12kEUR.
Are they gonna reimburse the customer for the cost of a new out of pocket ticket? That would be the bare minimum I'd expect from the airline.
The regulatory framework really doesn't seem to be sufficient here.
Glad the consumer got a positive outcome in this case, and doubly glad Virgin set up a process for people to appeal. Just goes to show that automated systems like these still require human oversight and escalation, because they will generate false positives. Just shutting down accounts that have done nothing wrong is quite obviously harmful to the brand.
Not sure what VS means by “now” having an appeal process? It has always been there as far as I understand. I was at the receiving end of one of these VS “fraud” identification processes, and I could appeal by providing documents that proved that the booking was for a family member. My account was restored, miles refunded and new bookings honoured. Isn’t that an appeal process?
@ DMoney -- Good to hear that was possible for you, but lots of reports suggested people were told their accounts were shut down, and there were no ways to appeal the decision or provide documentation to the contrary.
Possibly an obvious question DMoney, did your claim originate from a UK or U.S. standpoint?
Canadian standpoint
Thanks, DM.
Yet another example why government agencies are needed to protect the rights of Jon Doe against big companies, Without the DOT all airlines could arbitrarily do as they want.
There needs to be stronger consumer protection. If this was just an FFP that's a "value add" proposition, then there's a stronger case for Virgin claiming they can do whatever they want with the loyalty account, but when they're selling miles and essentially doing a swap of their own currency (miles) for fiat currency, then they can't just close accounts without proper justification.
Clearly the case which is mentioned in Ben’s article is a matter of speculation as to where the fault lies (we are all entitled to our opinion), however, what I take from this case is my gratitude to the aggrieved party for bringing the case. My reasoning is that if VA are in error then that injustice has been addressed. If the VA fraud identifier system was in error then that has been addressed too....
Clearly the case which is mentioned in Ben’s article is a matter of speculation as to where the fault lies (we are all entitled to our opinion), however, what I take from this case is my gratitude to the aggrieved party for bringing the case. My reasoning is that if VA are in error then that injustice has been addressed. If the VA fraud identifier system was in error then that has been addressed too. Thereafter, if anyone else should fall victim to the VA fraud system, than at least now there is a complaints process for all to follow.
VA is Virgin Australia.
But, as always, it's always nice to see you commenting on US time.
@Ben: When this happened to me with an Air France award booked through VS, I was able to get my account reactivated and the miles refunded after contacting their executive office and providing passport copies and utility bills. But then the award space was gone.
I am currently suing Air France (my lawyer said we have to sue them, not VS, then if AF loses, they can try to recover the cost from VS). Feels...
@Ben: When this happened to me with an Air France award booked through VS, I was able to get my account reactivated and the miles refunded after contacting their executive office and providing passport copies and utility bills. But then the award space was gone.
I am currently suing Air France (my lawyer said we have to sue them, not VS, then if AF loses, they can try to recover the cost from VS). Feels a bit unfair to me, but it is what it is. I’ll keep you posted how this goes.
Get a new lawyer.
Even the fake Skadden Arps knows better than that.
I agree with Eskimo. Common sense dictates that it was VS at fault. AF can’t control who books award space they make available to partners and they sure didn’t cause this delay. Not sure why the lawyer thinks AF is at fault?
your lawyer is wrong. Virgin is the issuing carrier and is responsible for any issues surrounding ticket issuance/cancellation.
@omar
Blasphemy.
Throughout history, they are so many thing including but not limited to bloodsucker, vampires, or hypocrites.
The only one thing they never are is wrong.
Regardless the verdict in favor of plaintiff or defendant, they always win and earn money just for playing the role.
This is the result of the commentary here and elsewhere about the operating carrier being contractually responsible for transporting passengers who have bought tickets from other carriers.
Let's make it crystal clear. If it's not a 261 claim, it's ALWAYS the responsibility of whoever took the money (and/or miles) from you, not anyone else's.