DOT opens investigation into major airlines’ frequent flyer miles systems

The Department of Transportation is launching an investigation into major U.S. airlines’ rewards systems to ensure customers aren’t seeing their frequent flyer miles being devalued without notice.

Transportation Secretary Pete Buttigieg sent letters to the four major airlines —  American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines — ordering them to provide records and submit reports with detailed information about the workings of their rewards programs, practices, and policies. The DOT said the investigation will focus on how consumers participating in airline rewards programs are affected by the possible devaluation of earned rewards, hidden or dynamic pricing, extra fees, and reduced competition and choice.

Buttigieg said the agency’s goal is to make sure customers get the value of their miles or points that were “promised to them, which means validating that these programs are transparent and fair.”

“Points systems like frequent flyer miles and credit card rewards have become such a meaningful part of our economy that many Americans view their rewards points balances as part of their savings,” Buttigieg said in a statement Thursday.

“These programs bring real value to consumers, with families often counting on airline rewards to fund a vacation or to pay for a trip to visit loved ones. But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value," he added.

The DOT said that as part of its investigation, airlines will need to describe each change made to their rewards programs over the last six years, as well as how the change affected existing points and status for customers.

The investigation is also looking into dynamic pricing and its financial impact on consumers. Airlines will need to provide the average dollar value of one reward point, the value of a point when it is redeemed for various services, and the price to purchase a point directly from the airline.

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The press release also notes DOT officials have already met with 11 U.S. airlines to discuss their rewards programs as part of a broad look into the industry.

During President Joe Biden’s administration, the DOT has taken large steps toward protecting consumers from airline malpractice. The department has ensured customers are entitled to a cash refund for flights that are canceled or significantly delayed, as well as when airlines don’t offer promised services onboard, such as Wi-Fi.