Virgin Atlantic Flying Club’s Fraud Department Needs To Chill

Last week, I wrote about a Department of Transportation (DOT) complaint that caught my eye, whereby a Virgin Atlantic Flying Club member reported transferring points to the program, then redeeming those points for a family member, and then having them arrive at the airport, only to find their ticket was canceled.

At first I wondered if there was more to the story, and if the person filing the complaint wasn’t telling the whole truth. However, over the past week I’ve received a countless number of reports of the same exact thing happening to others, so I think this is worth covering.

Virgin Atlantic aggressively canceling tickets, locking accounts

Loyalty program fraud is a major issue that airlines deal with, given how big the world of miles & points brokers is (this primarily consists of people buying and selling points, or tickets booked with points, at a profit). Of course airlines are justified in trying to find these people and take action as appropriate. However, sometimes airlines get a bit carried away.

That brings us to what seems to be a major issue with Virgin Atlantic Flying Club at the moment. I’ve now heard several reports of people who have had their Flying Club accounts closed and tickets canceled for what should be totally standard behavior.

What makes me so confident that these people are telling the truth is how consistent the theme is between all the stories:

• People open up a Flying Club account and then transfer a sizable number of points from one of the major transferable points currencies
• They their first redemption is booking a ticket for someone else (either a family member or close friend) shortly thereafter
• The traveler then shows up at the airport, only to find that their ticket has been canceled, due to a decision by Virgin Atlantic’s fraud department, with no opportunity to get an explanation or appeal

I’ve gotta be honest — often I’m suspicious when I receive reports of airlines being overly aggressive with auditing, and all too often I find that there’s more to the story that hasn’t been shared. Over the years, I’ve gotten pretty good at figuring out which claims are legitimate, and which aren’t.

At this point, I feel pretty comfortable saying that Virgin Atlantic is being totally unreasonable here, because I’ve received so many reports with exactly the same claims.

If Virgin Atlantic has a reason to be suspicious, then it’s fair enough for the airline to pursue that. However, the way the airline is behaving crosses the line, in my opinion:

• If Virgin Atlantic is going to cancel tickets due to fraud, they should at least let people know, rather than having them show up at the airport and find out the hard way that their ticket was canceled
• Of all the reports I’ve received, never has the airline asked for any sort of explanation or documentation of anything, and for that matter, the airline has even refused to provide a specific explanation

What recourse do consumers have against Virgin Atlantic?

Virgin Atlantic isn’t the first airline to have an overly aggressive auditing department when it comes to people transferring points. It seems that some airlines go through phases, and I remember similar phases for Air France-KLM Flying Club and Emirates Skywards (though things seem to have calmed down at both programs).

It’s almost as if the loyalty team and the fraud department aren’t communicating with one another. The fraud department seems to be thinking “how suspicious, people are opening accounts, transferring points, and quickly booking tickets.”

In reality, that’s exactly what the airline is encouraging, by partnering with major transferable points currencies, and also offering transfer bonuses.

This sort of gets at the challenging grey area of loyalty programs. Loyalty program terms and conditions basically allow airlines to shut down your account for any reason they’d like, without an explanation. But I also think that wouldn’t actually hold up in any sort of legal system, when someone is transferring something of value to the program, does nothing wrong, and then has their ticket canceled and points confiscated, without explanation.

It’s kind of like when a valet says they accept no responsibility for damage to your car. Regardless of that claim, if a valet crashes your car while drunk, they’re going to have to take some accountability.

So, what can be done here? The first thing I’ll say is that I hope that Virgin Atlantic reads this, and really looks into the practices that it’s engaging in. I respect Virgin Atlantic and the folks working there, as it’s a great company. I can’t imagine that this is the experience that the airline wants people to have. What’s going on here is unethical at best, and I have to imagine it comes down to a breakdown in strategy between departments.

Beyond that, what can consumers really do?

• You can try to take the airline to small claims court, though admittedly for many people, that’s more effort than it’s worth
• You can file a complaint with the appropriate regulatory authorities, like the Department of Transportation (DOT), because this is obviously a deceiving practice on Virgin Atlantic’s part
• You can reach out to the credit card company that you transfered points to, in hopes that this will cause them to put some pressure on the airline

In the meantime, I’d certainly approach the Flying Club program with caution, at least if you open an account, transfer points, and make your first booking for someone else, which seems to be what triggers these fraud accusations.

Bottom line

Virgin Atlantic’s Flying Club auditing department has been busy taking things to the extreme, freezing accounts and canceling tickets with questionable tactics. Virgin Atlantic seems to be suspicious of people who open accounts, transfer points, and then book tickets for others. But there don’t seem to be any reasons for suspicion beyond that.

I’m bringing light to this issue because I hope it will put pressure on Virgin Atlantic to change these practices. I generally think of Virgin Atlantic as being a pretty ethical airline, but this is a step (way) too far.

What do you make of this Virgin Atlantic Flying Club situation?