A bill has been introduced to the US Senate that would see airline loyalty programs more strictly regulated by government agencies.
US Senate Majority Whip Dick Durbin has put forward the Protect Your Points Act that, if entered into law, would give the government authority to oversee airlines’ power to change the terms and conditions of their loyalty programs, make carriers more transparent, and protect consumers’ reward points from expiring or being devalued without advance notice.
Too many consumers experience confusion & frustration when navigating airline rewards programs, especially when program terms change at the airlines' whims.
— Senator Dick Durbin (@SenatorDurbin) September 26, 2024
I introduced the Protect Your Points Act to require greater transparency from these programs, ensuring airlines play fair.
Why do loyalty programs need better oversight?
According to the Better Business Bureau, the aviation sector is the source of thousands of complaints from loyalty program members, who say their points are being devalued, or that airlines are imposing terms and conditions that prevent them from making certain bookings or from claiming previously promised rewards. Particularly notorious are the promotional “bait and switch” tactics airlines use, that appear to promise huge rewards or benefits, only for consumers to find there is a loophole that devalues the offer.
Now, through the proposed legislation, Durbin, an Illinois Democrat, intends to tackle some of these issues. His intention is not to ban loyalty programs but to level the playing field between airlines and the consumer. “My new legislation, the Protect Your Points Act, would require one thing from the airlines – transparency. To be clear, my bill would not eliminate your airline rewards programs or regulate the value of your points or miles. My bill only requires the airlines to play fair,” he explained in a statement released by his office.
What would change?
Under the new regime, airlines’ loyalty programs would be regulated by the US Department of Transportation (DOT) and the Consumer Financial Protection Bureau (CFPB). Changes airlines would have to implement if the new law is passed include ensuring they notify customers in advance if altering reward program terms and conditions, as well as disclosing to customers the value of single points/miles, and displaying pricing in both miles and US dollars simultaneously. In addition, the new law would prevent points or miles from expiring.
Airlines operating multi-million dollar reward programs as a form of currency are likely to challenge aspects of the proposed regulations, with the idea of open-ended reward miles potentially damaging to their bottom line, especially after reward programs were expanded during the Covid-19 pandemic to encourage more people to travel. Honouring those points could prove costly.
