The principle behind the popular Worst-Case Scenario books is the simple statement that “You just never know.”

The Worst-Case Scenario books are fashioned as survival guides, but those that write them admit they are regular, everyday folk, not survival experts. Well, we’re not the mileage police and we don’t manage the fraud departments for any of the programs, but we’ve been around these programs long enough and have helped enough frequent flyers through the years to know what might trigger a red flag in your account, as well as what you can do if the situation arises.

When you consider that, over the course of your frequent flying career, you will rack up hundreds, if not thousands, of transactions, it’s not too far fetched to think one of those transactions might raise an eyebrow or two at program headquarters. In a recent poll on WebFlyer.com, 4.9 percent of respondents have had at least one of their frequent traveler programs placed on administrative hold for review. Now, 4.9 percent might not sound like a lot, but when you consider there are over 34 million active members of frequent flyer programs worldwide, the numbers add up quickly.

If you’ve been face-to-face, email-to-email or phone-to-phone with one of your programs concerning a red flag in your account, you’re familiar with the anxious feeling, the sinking in the pit of your stomach, the humiliation. The thought of losing all your miles, miles that were built over the course of years, miles that were intended to jet you and your family to faraway destinations in your retirement years, can be a spine- chilling prospect — whether you believe you’re innocent or know you are not.

If you’ve never been audited, good for you. We sincerely hope that your streak of good fortune remains in tact. To better your odds, though, we’ve compiled this survival guide outlining the pitfalls to avoid and strategies to employ to keep yourself out of trouble with the mileage police.

What Are the Mileage Police Looking For?
What can cause a red flag on your account?

Generally, there are two separate types of fraud the programs attempt to keep in check — fraud related to earning miles and redemption-related fraud.

On the earning side, red flags might appear when you have too much activity in a single partner account, when you have multiple earnings on a single day from the airline in question, when you try to double dip among alliance partners or when you earn miles from a targeted bonus for which you were not targeted.

On the burning side, high balance transfers and high transaction counts in award redemption (more on this later) will tend to garner the attention of those on the lookout for fraudulent activity.

In a nutshell, the frequent flyer computers can be set atwitter by any activity in your account that appears out of whack compared to what other frequent flyers are earning and burning, or any activity that looks suspiciously like frauds that have been perpetrated in the past.

For years, one of the most common ruses used by frequent flyers has been to submit a claim for miles/points to several programs for a single transaction. Before the widespread use of computers, this was a standard ploy, and often proved to be quite profitable for members. Even in today’s age of automation, it is still fairly common for members to submit to several partner programs, whether for a flight, hotel stay or car rental. Sometimes the mistake is innocent (most of us have, at one time or another, forgotten to enter our frequent flyer number into a flight and, later, mistakenly sent missing credit requests to more than one program), but more often than not, the flyer in question knows exactly what they are doing.

The “missing credit” flag runs very red. Because of the prevalent use of this “technique,” programs have become adept at identifying those who attempt it, and it is now the leading cause of red flags.

Partners, both international and domestic, cooperate more so than ever to crack down on this type of fraud. Software is used to scrutinize and compare databases. And many programs now charge partners for “paper transactions,” which means that missing credit may well be automatically put back into your account before being acted upon, thus putting you more in the line of a red flag.

Detecting redemption fraud can be a bit more difficult for the programs, as upwards of 40 percent of all awards are transferred to people other than the account member. Historically though, redemption fraud tends to be carried out in conjunction with other out-of- bounds activities, such as false reporting to partners. The combination of common sense and technological tools can often unearth fraud.

The key factor in ultimately determining whether or not a given activity is fraudulent or not, and the thing that makes it so difficult for the fraud detectors, is the determination of intent. Was there intent to earn false bonuses or evade redemption rules? Generally though, this question is only relevant once an investigation has begun — long after the red flag was initially raised.

How To Fend Off An Audit
Unlike in cases with the IRS, there is no specific “season” in which a red flag on your account may appear; it’s solely based on transactions. Needless to say, an audit is unpleasant at best, and terrifying at worst. In addition to the prospect of someone poking at every aspect of your miles and points, the time spent defending yourself — whether or not it is deserved — can be significant. Plus, your account may be frozen, which can play havoc with your potential award redemption.

Programs typically conduct three types of audits: correspondence audits, contact examinations and travel examinations.

Correspondence audits are computer-generated messages that are sent automatically. Most of the programs have established a set of known fraud conditions. If your account experiences activity that corresponds with these conditions, the computer instantly sends you a message. The most common reason for a correspondence audit has to do with something we addressed earlier — missing credit for partners to the program.

You can respond to these types of audit by mail, and they typically require you to provide proof of a flight, hotel or car rental. When responding to a correspondence audit, you better have paperwork to go along with everything that appears on your account or you can be worn down.

A contact examination audit is much more serious. Less than three percent of those that are identified by red flags are required to face this type of audit. If your account is subject to a contact examination audit, you will be contacted personally to review some activity in your account. If you get a personal phone call or personally addressed letter or email, take this seriously. In this situation you are likely to face a frozen account unless you can, in a timely manner, satisfy the demands of the query. The most common reason that someone might face a contact examination is because they are suspected of buying and/or selling awards.

Travel examinations are the most extreme type of audit. An audit of this type takes the form of a designated airline official personally interrupting your travel and checking your travel documents as well as materials. While these types of audits are extremely rare, members have been known to have been paid visits at gate areas and check-in counters. In these types of cases, it isn’t surprising to see local law enforcement hovering nearby. Most common among these types of examinations are ticket fraud, ranging from doctored upgrade certificates to bulk full-fare tickets for mileage accrual and possible refunds.

The key to deflecting any of these types of audits is to avoid unwittingly triggering the red flags that cause them and to keep impeccable records. But what, specifically, are the items that raise the red flag? Here are a few of them:

1. Large deductions relative to earning miles/points. If you are claiming multiple awards in short periods of time and all the awards are being transferred to names other than your family name, be careful. The programs will usually check unusually large award deductions, especially for business- or first-class awards internationally (these are the types of awards coupon brokers often sell). Other items that catch the attention of the programs include large numbers of debits and credits for partners such as credit cards.
2. Incomplete or incorrect reporting. This includes making overt mistakes on missing credit for partners, such as international airlines (including alliance partners) as well as for other partners when select bonuses apply.
3. Far-fetched earning transactions. Programs understand that certain types of bonus transactions can become popular, but when you suddenly start to show that 90 percent of your earning is member referral bonuses, you can expect a correspondence or contact audit.
4. Bonuses earned to non-targeted members. We hate to bring you bad news, but many programs are trying to perfect their data mining to detect when members have received a bonus for a promotion in which they were improperly registered or not directly targeted. The popularity of the Internet has contributed to the masses of members who share information about one-to-one bonus promotions.

If you find that you will be innocently triggering any of these red flags through the course of your normal earning/redemption activities, contact your program ahead of time and let them know what your situation is. This won’t guarantee an audit will be avoided, but it will help if the eventuality should arise.

How To Escape When Your Frequent Flyer Account is Frozen
Uh oh, for whatever reason, your program has frozen your account, and has told you that your miles are no longer available for your use. Or, worse yet, the program has actually asked you to take your business elsewhere. But you say you’re innocent of all charges. What are you to do?

Well, there’s no easy answer. But here is some advice that just may help you get past the “Go Directly To Jail” message.

If your account has been frozen temporarily in conjunction with a correspondence audit, you probably don’t have too much to worry about. You can usually respond in kind to satisfy paperwork demands. For instance, we recently took a partner flight in United’s Mileage Plus program. Sending in the boarding card for missing credit produced a request for further correspondence, such as proof of ticket purchase from a credit card bill or travel agent. Not having that convenient, we deferred to their own rules, which stated a legitimate boarding pass was all that was required for missing credit transactions. We also pointed out that the partner flight in question was in the middle of two connecting flights on United. Common sense won out, and the missing miles were credited.

Occasionally, especially in the case of targeted bonus discrepancies, a program might demand you produce the correspondence through which you learned of the offer, such as a postcard or email. If you saved the postcard or email, you’re in good shape. If not, say goodbye to the miles.

Which leads us to our first recommendation — save every piece of paperwork you receive in conjunction with flights, hotel stays and bonus promotions from which you earn miles/points. While you probably won’t ever need most of it, you’ll be glad you have it should you be audited.

Here are some other tips that will help you navigate any audit:

• Before the audit, find out exactly which transaction the program is questioning and be prepared with all the necessary documentation.
• Answer all of the questions put to you, and only the questions put to you. Do not volunteer any information that is not specifically asked for that might in any way prejudice the outcome of the audit. Remember, the person making the decision whether you will keep your miles or points will make an objective decision based on the information presented them.
• Tell the truth. If you’ve engaged in some less-than-honorable actions, come clean. Attempting to cover up actions during an audit will only lead to more scrutiny placed on your account.

How To Survive When Red Flags Are Flying
Did you lose your audit and get stuck with an even bigger ding on your miles or points? Before you go off the deep end, understand that while technically you can appeal an audit, there’s really no one to whom you can appeal. Most, if not all, programs state very clearly in their fine print that “the decisions of [the program] are final.”

When it comes to miles and points, you should certainly earn those you deserve. But also keep in mind that too many red flags can attract the attention of program mileage police.

Frankly though, most people worry far too much about audits. As we noted earlier, very few returns are audited (4.9 percent in the latest research), and you really only have to worry about an audit if you’re cheating.

While you certainly want to be aware of what the mileage police are looking for and how to avoid being red flagged, you shouldn’t let paranoid fear stop you from taking advantage of legitimate bonus offers, or from donating an award to a friend out of the kindness of your heart. In short, be aware of the mileage police, but spend your time figuring out how to exploit the legitimate breaks in these programs — and there are lots of them.

“You just never know” when you might be audited by your favorite frequent traveler program. But if you are innocent, you’ve saved your paperwork and you follow the guidelines we’ve outlined, you can be sure you’ll get every mile and point that’s coming to you, and you’ll remain in good standing with your program.