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Frequent Flyer Fraud – Are You A Victim?

by on January 31, 2013 · 9 comments

in Points Guy Pointers

Recently I read an interesting story about a Seattle-based travel agent who stole millions of frequent flyer miles from wealthy clients and used them to book over 100 award trips for herself and her family.

Karen Yeakel, a travel agent in Bellevue, Washington, stole 3.7 million airline miles from clients whose travel she arranged to book 135 flights for herself and her family totaling well over $100,000 worth of travel.  The investigation has been going on since 2011 after she was fired from her job at Stellar Travel when the agency noticed discrepancies on one of her top client’s frequent flyer mile accounts and the entire scope of her activities began to unravel.

She apparently told clients that she had found them preferential fares that precluded mileage accrual and banked the miles they should have earned into her own accounts instead. Not only that, but she is also accused of using clients’ credit cards to book hundreds of thousands of dollars worth of travel that she then sold to other clients at extreme discounts, pocketing the difference.

Always check your account after travel to make sure miles have been credited.

Always check your account after travel to make sure miles have been credited.

Though it’s not discussed much, frequent flyer mile fraud and theft is an issue that happens a lot more than we think. Miles and points are a form of currency and they can redeemed for much more than travel – everything from electronics and books to gift cards and more.

The key thing to know is that, with a few exceptions with foreign airlines, if you have paid for a ticket you are entitled to frequent flyer miles. The accrual rate may vary based on fare class and which airline alliance or non-alliance partner you fly, but a quick look at your program’s earning webpage should tell you exactly the percentage of miles you earn. Even if your frequent flyer number isn’t on your reservation or boarding pass, you can always request credit afterwards (usually within 6 months to a year). Though many airlines like American have now made the process simpler so that you just have to enter your ticket number in an online form, you should always keep your boarding passes until you’re sure the mileage has been credited to you just in case you need to have a hard copy to fax or scan and email in for proof that you took the flights.

Always keep your boarding passes until your miles have posted.

Always keep your boarding passes until your miles have posted.

In most cases, though, frequent flyer mile fraud seems to be based on email phishing schemes which not only puts your mileage accounts at risk, but also any personal information stored in them such as credit cards, address and trusted traveler numbers. What normally happens in these cases is that the consumer will get an email claiming to be from an airline, hotel or travel agent asking the consumer to verify their account information in order to claim a fake prize or cancel a fake reservation. When the consumer sends the information, the thief gets access to their account and drains it. Sometimes these emails also have links in them that when clicked on infect the computer with malware or a virus that can then steal even more personal information.

The bottom line is, if you get one of these emails, report it immediately to your airline, hotel or bank program and also do not respond to it. Simply call the program it claims to be from directly and ask whether such an email was sent out. Chances are the answer will be no and you’ll know that you’ve been the target of fraud.

Several airlines have fraud warnings and reporting systems for consumers. Here are the ones I found:

American Airlines
British Airways
Delta
JetBlue
Southwest
United
US Airways
Virgin America

Report any fraud as soon as your find it because airlines aren’t liable for miles stolen from your account, but the sooner you catch any fraudulent activity, then better the chances are of them figuring out who was responsible and you getting your miles back.

To prevent fraud, you should take security measures like changing your account passwords frequently and monitoring them at least every month for fraudulent activity.

I luckily haven’t had to deal with this, but would love to hear from anyone who has, so please comment below with any positive/negative experiences with mileage theft and fraud.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

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  • Ryan

    What about the whole industry out there of people who sell points. There are ‘travel agencies’ that will buy the points and then sell flights to other people and make money on the spread. I’d love to see an in-depth article studying this practice.

  • Philipp

    Don’t you think that despite being a PITA, the whole Korean Air process to book reward tickets prevents these situations?

  • mikey

    Sick the IRS on her.

  • john K

    You know…I honestly found award booking on Korean Air 100 times more EASIER than American Airlines (for international and complicated itineraries that can not be booked online)

    1) It takes 30-40 minutes to get an AA rep online. It takes 3-4 minutes to get Korean Air rep online.

    2) It once took me 4-5 CALLS to correct out mistakes MADE by AA reps. 4-5 calls x 30-40 minutes…2-3 hours lost. I’ve not had a Korean air rep who was not knowledge in what they were doing.

    Okay…am I being biased against AA?
    Anyhow, it’s not THAT horrific to book on Korea Air.

    It took one phone call to make a reservation, for which they will hold for like 6-9 months out!
    I had to send out a phone pic copy of my passport via email.
    I also filled out one form online, which I had to pic copy because it needed my signature.
    No biggie.
    After all was said and then, was not such a PITA….AND they have terrific availability to boot! Was able to score 3 F on single flight…and wasn’t that hard either.

  • http://www.triplepundit.com Nick Aster

    How is it possible for here to have earned miles on other people’s travel? My understanding is that it’s the person who’s butt is in the seat who earns the miles, not whoever paid for the ticket… ami right?

  • Suzannehendrix

    I used to have those old Southwest Airlines paper passes coming out of my backside. I would sell them on eBay or Craigslist. Later on, they went to an electronic system for the coupons and I basically had to show the buyer my Rapid Rewards number to book for them. Well, later on, some douche I sold a ticket to, hacks into my account and starts using all my roundtrip tickets, for himself no less. I called up Southwest Airlines and told them about it and I tried to prosecute the guy, but basically Southwest wouldn’t do anything. I told the guy I was going to sue him and he ended up paying me for the passes-fair market value-around $400 each-but I was surprised the airline wouldn’t do anything legal about it.

  • Acker

    It’s not a bad idea to take a photo of boarding passes, folio’s and anything where points/miles are due. Delete when all is in order.

  • Red G.

    Airlines usually send out courtesy email whenever you redeem, at least for flights, so you’d know immediately when there’s been a redemption you didn’t authorize.

  • fsaeed

    I just logged into my united mileage plus account to see that 112,000 miles were stolen. the perpetrator changed the email address on my account so i didn’t get notified of the redemption. i’ve contacted united about the fraud. i have no idea what they will do about it. any ideas on what i can do?

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