How did you get involved in this?
I started getting calls from people saying that Delta had confiscated their miles. In most cases these were people who, for a variety of reasons, couldn’t use them, so they sold or brokered them. I’ve got one person that couldn’t find a Delta flight, so she went to a broker, who said, ” Give me your Delta miles and I’ll give you a ticket on American.” Essentially a mileage swap. Which technically the airlines claim are against the rules. What Delta has done here is when they suspected somebody of brokering or selling miles, was sending them a letter, saying, “You violated our rules and we are therefore deducting (your miles).” I’ve got a pile of statements that show negative balances, and a lot of these people are what Delta would call Medallion members.
We started researching, looking into it. I’m familiar with all the old cases. And I said there’s something wrong here. At some point these airlines have to come to the realization that their mileage programs are not what they started out to be. These are not just loyalty programs anymore; Miles are the new green stamps. I’m willing to bet that more than half the miles out there are credited to people’s accounts without ever having to fly. Credit cards, mortgage loans, telephone. You’ve got people with thousands of miles who maybe fly once a year. These miles people buy and pay for. The number of miles out there is going up, Delta is getting paid for the miles, and yet the ability the people have of redeeming the miles is going down.
But anyone can get any seat any day on the Delta program. We tend to focus on the 25,000-mile awards, and you talk about the blackout dates — it’s hardly anything new to the courts. How are you going to get around that?
It’s a different program than it used to be. You have to give customers fair value. If you’re going toincrease the number of miles out there, at least have a program that will increase in opportunities. But people should have a fair opportunity.
It’s got to be tough to certify a class action because you’ve written it to include only people who have had miles confiscated. That would be an extreme minority of people at Delta. How are you going to get around that?
Because you don’t have to define every mileage holder’s class under the rules, you simply have to say it is a class of people that’s too numerous and therefore too inconvenient to bring every one of them individually. We think we are going to have several hundred people around the country. I didn’t look for this case. I’m trying to do right by the people.
We have also named MilePoint as a defendant. And the reason we have done that is not because they’re corrupt here. But, what we’re finding is that Delta is saying you cannot privately sell or barter, but we’ll give you an outlet. So you’re stuck with only their outlet — as I understand it, MilePoint is owned by Delta and several other airlines. So in effect, it’s Delta and the other airlines that are setting the price for miles.
So what is the timetable here?
We filed a compliant Monday (1/27), it’s just been served, and Delta and MilePoint will have 30 days to respond. I don’t know what they’re going to do. They can call and say, let’s sit down and resolve this thing, or they can come out blasting from both barrels and say “You’re not going to tell us how to run our program.”
At least. The press is going to follow it and Delta will do nothing for its customer service reputation. I called Delta — the guy that was sending the letters — and he said they were from the legal department, but the legal department won’t talk to me.
We think we have a valid case. These airlines have to understand that even with their best customers, even if the rules are what they say they are, with your best customers every once in a while you need to look the other way, because it’s good business.
If Delta would show some flexibility and think of itself as a customer service airline, this thing could be resolved quickly.