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.
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?
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