Virgin Atlantic Accuses Man Of Loyalty Fraud, But It Doesn’t Add Up

Loyalty program fraud is a major issue for airlines, and can come in many forms. For the most part, airlines are good at detecting suspicious behavior, and a vast majority of the time, when they accuse someone of something, they’re correct. That brings us to an interesting complaint that has been filed against Virgin Atlantic.

Flying Club member files DOT complaint against Virgin Atlantic

The Department of Transportation (DOT) publishes all kinds of filings, which I routinely keep track of. In most cases, these are filings by airlines, which give us a sense of the routes they’re looking to launch, what new seats they may be looking to get certified, etc. However, in some cases these filings also include consumer complaints.

That brings us to a noteworthy complaint that was filed by a New Yorker named Chaim Zeev Rozen, against Virgin Atlantic. According to the complaint, Virgin Atlantic accused him of “loyalty fraud,” when he did nothing more than transfer points from his Chase Ultimate Rewards account to Virgin Atlantic Flying Club, to book travel for his family. Then the airline didn’t even notify him that his tickets had been canceled, leaving them stranded.

Here are the details contained in the complaint:

• On December 3, 2023, Rozen opened a Virgin Atlantic Flying Club account, and on October 26, 2024, he transfered points from his Chase Ultimate Rewards account; specifically, he transfered 65,000 points, and thanks to a transfer bonus, that got him 91,000 points
• On October 26, 2024, he made a booking with points through the Virgin Atlantic website for his parents and his brother (who share the same last name) to travel on October 28, 2024, on Delta from New York to Milan
• When the family attempted to check-in, Delta informed them that Virgin Atlantic had canceled their tickets
• He was forced to purchase last minute tickets at a higher price, which required transferring an additional 69,000 points, and paying an additional $96.90; on top of that, the family couldn’t order special meals (since there wasn’t 24 hours notice), which were needed to accommodate dietary restrictions based on their religion
• He could no longer log into his Virgin Atlantic Flying Club account, and Virgin Atlantic never contacted him about the tickets being canceled, or about his account being locked
• He attempted to reach out to Virgin Atlantic, but they refused to provide any details about what he did wrong, other than accusing him of misconduct, and claiming their decision was final
• In an email on October 29, 2024, Virgin Atlantic simply stated that “your account has been suspended following recent investigations by our fraud protection team,” and that “we believe that your account has been used for fraudulent activity and has therefore breached our Flying Club Terms and Conditions”

Rozen points out all the way that the airline could have tried to verify if there was actually fraud:

“Despite Virgin’s protestations, there are obvious methods for Virgin Atlantic to investigate. If they thought I was selling points, they could have asked me, and I would have told them no. If they didn’t believe my simple attestation, they could have asked me to submit a sworn or notarized statement. They could ask me to explain my relationship with the passengers, or to prove it, and I could easily have done so. (My birth certificate shows that I, the account-holder, am the offspring of two of the passengers. And my brother’s birth certificate shows that he is also their offspring.) They could examine our booking patterns, which would have shown that none of us has ever redeemed points for any third party unknown to us, nor have we ever offered points for use by any third party unknown to us. Nothing in Virgin Atlantic’s communications with me indicates that they did any investigation like this, nor that they investigated in any other appropriate way. They seem to have seen the inbound transfer (from Chase) and redemption (on Delta) and immediately assumed the worst.

As Rozen summarizes the situation:

“The totality of the situation is Kafkaesque – an incorrect penalty meted out arbitrarily by a secret adversary that claims to be its own judge, jury, and executioner, with no apparent concern for either fairness or the DOT regulations that rightly disallow these tactics”

I’m curious how Virgin Atlantic responds to this complaint

As I mentioned earlier, airlines do deal with a ton of loyalty program fraud, and in my experience, they’re right a lot more often than they’re wrong. There’s a massive industry of points brokers, who essentially buy and sell points (or tickets booked with points), in order to make a profit.

Based on the details that Rozen provided, I can see how an itinerary like this might be flagged in general — you had a member who never had any activity, then transfered points for imminent travel for people other than the member. The reason these last minute bookings are suspicious is because that’s how a lot of fraud happens, where people will steal points in order to book last minute travel, before it’s caught.

But then actually looking at the details should’ve made it clear that this wasn’t fraud. Rozen was booking tickets for family members who have the same last name he does. Virtually all ticket fraud would be for people with different last names.

So I’m curious what’s going on here. Is Rozen telling the entire truth, or is he leaving out any important details? And if he is telling the truth, what the heck is wrong with Virgin Atlantic’s fraud department, that they think this is fraudulent activity, even after being confronted by the member?

My best guess on the situation (and this is purely speculation) is that since this was so last minute, the fraud department temporarily suspended these tickets to investigate. But given the imminent travel, tickets weren’t reinstated in time, and to avoid being held liable, the fraud department just doubled down.

Airline loyalty program contracts of carriage are really one-sided, which is to say that airlines basically reserve the right to cancel someone’s account or take their points away for any reason. That being said, canceling a confirmed ticket with no justifiable reason surely violates some basic good faith contract rules.

Since this complaint was filed with the DOT, Virgin Atlantic will have the chance to respond, and I look forward learning what the airline has to say. We’ll learn if the company was acting completely unreasonably, or if there’s more to the story.

Bottom line

A person has filed a complaint with the US Department of Transportation over an award ticket dispute. He transfered points from Chase Ultimate Rewards to Virgin Atlantic Flying Club, to book last minute travel on Delta for his family.

The company’s fraud department accused him of misconduct, without providing more details on why. He ended up needing to book new tickets. Even after the fact, the airline doubled down, without actually providing any evidence for how he violated the rules.

Based on the facts presented, Virgin Atlantic was acting completely out of line. That being said, the beauty of these DOT filings is that we get to see both sides, so I’m curious how Virgin Atlantic responds.

What do you make of this complaint against Virgin Atlantic?