The U.S. Department of Transportation this week launched an inquiry into the four largest U.S. airlines’ rewards programs, with the goal of “protecting rewards customers from potential unfair, deceptive or anticompetitive practices,” according to an agency statement. American Airlines, Delta Air Lines, Southwest Airlines and United Airlines were ordered to provide records and submit reports with detailed information about their rewards programs, practices and policies.
DOT said that given the proliferation of rewards programs in air travel, the review was launched to examine the fairness, transparency, predictability and competitiveness of such programs. “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,” Transportation Secretary Pete Buttigieg said. “But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value.”
The inquiry is the latest volley by the Biden administration against rewards programs. The Consumer Financial Protection Bureau earlier this year issued a report on complaints it had received about credit card rewards programs, and the CFPB and DOT in May held a joint hearing on credit card and airline rewards programs. In an ABA Viewpoint blog post, Thomas Rosenkoetter, executive director of the American Bankers Association’s Card Policy Council, said the CFPB’s research methods were not transparent, and it drew conclusions in its report based on a very small number of complaints (1,215 complaints relative to the 143 million U.S. adults who own a rewards credit card).
“The facts are clear: Americans like their credit cards. They like their rewards. They would be disappointed to lose their rewards programs,” Rosenkoetter said. “The complaints about rewards are exceedingly rare. When they do occur, banks take them seriously and resolve them quickly.”
