Frequent Flyer Fraud - Are You A Victim?

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.

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.

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.