Department of Transportation (DOT) Secretary Pete Buddigieg doesn't let any grass grow under his feet. That's for sure.
Just months after he signaled that his agency is shoulder-to-shoulder with the Consumer Financial Protection Bureau (CFPB) over trying to get the airlines to stop devaluing their rewards points, Buddigieg has sent the letter the airlines were hoping would never come.
Recognizing the significance of how airline reward programs have evolved into perks that help Americans budget their lives better – and now devolved by a 50% drop in value – the DOT is stepping in to ensure fairness and transparency. And maybe do enough arm-twisting that the airlines will restore those programs to something close to previous value.
In a letter to the four major U.S. airlines – Delta, American, United, and Southwest – Buddigieg is requesting that airlines provide every single detail regarding their rewards programs. Everything from the basics – how to join, bonus miles for signing up, annual fees, etc. – to the tiniest details, like blackout periods and different membership levels (e.g. Gold, Platinum) and what perks come with them.
“Our goal with this inquiry is to ensure that customer rewards are protected from any practices that would diminish their value, benefit or availability,” the secretary’s letter said.
Airlines also have to explain what you can upgrade to, and how much it costs in points or money. Buddigieg said he wants to see transparency – lots of it – about any fees, such as charges for transferring points or accessing certain benefits. If the DOT gets what it’s looking for, it thinks it can build a new landscape where customers know exactly what they're getting into before they sign up for a rewards program.
Do it or…
The department was able to muscle the airlines into getting transparent over what fliers get when their flights are delayed or canceled, and it now thinks it has the right to throw an “either or” into this situation, too.
“DOT has authority under 49 U.S.C. § 41712 [one about deceptive practices] to investigate and take action against airlines and ticket agents for unfair or deceptive practices and unfair methods of competition in air transportation or the sale of air transportation,” Buddigieg said.
The airlines don’t have much time to respond, either -- 90 days and that's it. The information requested by the Order must be submitted to the Department by December 4, 2024.
