UPDATE -- Transcript of Complaint Against Delta Released
||:: Late-Breaking News
(Posted: Jan 30, 2003)
A group of Delta SkyMiles members has filed a complaint in federal court in New York, claiming that the carrier has unfairly restricted award availability by allowing SkyMiles members to earn miles through means other than flying.
The three plaintiffs named in the complaint claim to represent "all members who are or were participants in the Delta Air Lines SkyMiles program and have had Delta SkyMiles wrongfully confiscated" and are bringing the suit as a class action, though the class has yet to be certified.
The suit contends that the SkyMiles program began as a "miles-flown" customer loyalty program, but has evolved into a larger marketing program where Delta awards the majority of its miles to credit card users and shoppers who buy special promotional items. According to the plaintiffs, this practice has caused Delta to adopt restrictions such as blackout dates, capacity controls and expiration dates "that make it ever more difficult for plaintiffs ... to obtain fair value for the miles credited to their accounts."
In addition to making awards more difficult to get, the frequent flyer plaintiffs accuse Delta of using "threats and intimidation" to prevent members from selling, exchanging or bartering their miles and claim that Delta's and other airlines' formation of companies such as Milepoint.com are in violation of antitrust laws. The plaintiffs are seeking unspecified damages and a court order banning Delta and other airlines from forming ventures like Milepoint.
The complaint specifically alleges violation of the Sherman and Clayton Antitrust Acts (15 U.S.C. SS 1 and 2 and 15 U.S.C. S 18, respectively); violation of the Racketeer Influenced and Corrupt Organizations Statute (18 U.S.C. S 1962(c)); breach of contract; breach of duty of good faith and fair dealing in both restriction of availability of goods and services and suppression of value of frequent-flyer miles; conversion; fraud and misrepresentation; and breach of the New York State Consumer Protection Statute.
Delta has, according to the complaint, acted in concert with other airlines to "unreasonably restrict, restrain, limit and control the market" for miles by prohibiting their sale, while simultaneously "selling" miles themselves with ventures such as Milepoint.com. The plaintiffs allege that such behavior not only violates federal antitrust law, but also constitutes a "pattern of racketeering activity" sufficient to violate the RICO statute.
The plaintiffs further allege that SkyMiles rules do not prohibit the sale, exchange or barter of miles, and thus that a prohibition against such sale is a breach of contract. Alternatively, they claim that even if the program rules do prohibit the sale of miles, Delta's own selling of miles constitutes a breach.
The complaint goes on to allege that blackout dates and capacity controls violate Delta's duty of good faith and fair dealing by restricting the availability of promised awards. Such restrictions, the plaintiffs claim, combined with the prohibition on the sale of miles unreasonably suppress the value of the miles.
The plaintiffs, each of whom has had miles confiscated by Delta, also allege conversion, and further claim that by advertising SkyMiles as a means to easy air travel and then restricting availability, Delta has committed fraud and misrepresentation.
Finally, the plaintiffs allege that by claiming the sale of miles was unlawful (as opposed to just "against the rules"), Delta has violated that portion of the New York State Consumer Protection Statute which prohibits "deceptive acts or practices in the conduct of any business, trade or commerce."
If anything, the case offers an insight into the culture of entitlement that has haunted the frequent flyer industry. Originally, of course, if a flyer had the miles, and there was a seat available, any award was a shoo-in. Those awards, however, were generally between 40,000 and 50,000 miles.
It was only much later that the airlines introduced the 25,000-mile awards - a discount that understandably came with restrictions. In true American spirit, though, many flyers now want the availability of the 50,000-mile awards (which are still an option, by the way) at half-price.
If you are a SkyMiles members who supports the claims in this complaint and you want your name added to the class-action suit, you should contact:
Sr. Partner: Barry Roberts
Roberts & Hundertmark LLP
5028 Wisconsin Ave., NW, Ste. 250
Washington, DC, 20016
phone: (202) 362-9700
To view a full-text transcript of the complaint, go to http://www.insideflyer.com/articles/o2.php?key=59.
posted: Jan 2, 2007 at 7:57am (MT)
My wife is also a victim of Delta's unfair mileage program. She received a notice during the month od November informing her that her skymiles were going to expire under new rules that limits the use of skymiles. She was told her options were to use it before the end of the year which was a month away or spend $50.00 to $200.00 to keep the miles active. We tried to find a flight which could be booked using the 36,000 miles she had but could not find one. I wrote a letter to delta and received a call from a Mr. Butler on the 29th of December. He informed me that we could book flights on Northwest and Continental Airlines however when we attempted to do that we were told that the miles were not transferable and at that point we gave up in fustration. We live in Hawaii and thus we are charged more miles for travel as compared to residents from the Continental United States. We may not be a party to this class action but I needed to get this off my chest. Thank You for allowing me to vent. Jimmy Leong
posted: Jun 8, 2007 at 8:32pm (MT)
Delta Airlines and American Express just run a scam on consumers offering cards with miles for "free ttravel" which then is simply not available at the award levels they promote. So they screwed both the actual travelers that collected miles and those who signed for the credit cards expecting the reward. Both Delta and American Express got the clients and the money, and we got scammed.
posted: Jul 7, 2007 at 2:07am (MT)
I tried to find tickets to Hawaii in July, or for Germany in September or Miami in September but nothing seems to be available, even when I told them that I am flexible on dates. No coach tickets are available, only business class, which I would need so many more miles. I think they are just scamming people.
posted: Jul 23, 2007 at 4:09am (MT)
Yes, delta is scamming people - i had over 70000 miles and whenever i tried to use them - could not find any availability & gosh now the miles are gone!
posted: Sep 5, 2007 at 4:59pm (MT)
We have close to 300,000 miles that we have accumulated over several years just so that we could use it as a trip. Over the last 3 years we have called 4-6 months in advance and never seem to be able to find any availability. Now we are are told that IF we can get a reservation we have to pay twice the number of points originally told to us........This type of promotion is unehtical and Delta as well as AE should be held accountable and consumers' points should be refunded in cash. Shame on Delta and shame on AE for promoting them.
posted: Oct 2, 2007 at 11:51pm (MT)
Yeah, just what I thought... I called Delta today and asked about my miles, I got a very rude woman who told me basically I needed 25-90 thousand miles to travel anywhere??? dollars DO NOT EQUAL MILES BEWARE this is a SCAM!!!
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