On September 5, the U.S. Department of Transportation (DOT) initiated an inquiry into the rewards programs of the four largest U.S. airlines to investigate potential unfair, deceptive, or anticompetitive practices. Secretary of Transportation Pete Buttigieg ordered the airlines to provide detailed reports and records about their rewards programs. Specific practices subject to investigation included the devaluation of earned rewards, hidden or dynamic pricing, extra fees, and reduced competition and choice. The inquiry followed a joint public hearing by the CFPB and DOT earlier this year, where concerns about the transparency and fairness of airline rewards programs were raised (covered by InfoBytes here). CFPB Director Rohit Chopra released a statement regarding the DOT’s action, stating “Americans are paying high interest rates and fees to participate in these programs — yet these tempting points and rewards programs are often depreciated or changed with little notice.” The DOT also noted that this initiative was part of the Biden Administration’s broader efforts to improve airline passenger rights and oversight of the airline industry. Other DOT actions included the creation of new rules governing automatic cash refunds to passengers, the imposition of surprise airline fees, and an expansion of DOT’s capacity to review air travel service complaints.
