Coupon Brokers are still very much a part of the frequent flyer industry-much to the chagrin of the airlines themselves. Despite a number of lawsuits lodged during the "boom" years of the 1980's, it appears that legal efforts have not completely dampened the enthusiasm of those brokers who are intent on carving out a niche in a most unwelcoming business.
For those travelers attempting to seek out a coupon broker, it appears that they may not be as easily accessible as before. Although they continue to advertise their services, it is on a much smaller scale and they usually operate under guises that will not ultimately lead to their whereabouts. Some of the larger operators advertise under 800 numbers in national newspapers-blatantly dismissing the threat of legal action-but this still makes it difficult to track their location due to the auspice under which they offer their services-that probably untraceable telephone number.
It is understandable that the airlines are concerned. The coupon brokers' underhanded activities are costing them revenue in excess of $300 million per annum, a great deal in these days of financial uncertainty in the industry: The airlines remain legally active in the pursuit of their travel nemesis. Although the coupon brokerage business does not violate any federal or state laws, it most certainly does infringe upon stipulations made by the airlines in the wording of their frequent flyer programs.
The "by-laws" of some of the programs state categorically that free award tickets earned via mileage accumulation can only be transferred to the members' immediate family. Most airlines are more lenient, allowing the member to designate any person of choice but the member has to present the relevant information at the ticket counter at the time of ticket issuance.
The coupon brokers are very blatantly ignoring the airlines edicts by purchasing mileage from program participants. When the member contacts the broker to sell miles, the broker provides the name of a willing purchaser, and to go that extra mile, will generally make all of the travel arrangements directly with the airline. The airline will issue the ticket in the name specified by the member and mail it off to the address they have on record. Upon receiving the ticket, the seller hands it over to the broker, for a fee: The broker re-sells this to the person named on the ticket, for a significant mark-up. The purchaser is then advised to concoct a story for the airline, if questioned.The ticket was a gift from a friend, for example. Obviously these acts of defiance by the brokers "fly in the face" of airline policy and only manages to further incense the carriers who are now actively pursuing any suspicious activity in members accounts, such as a great deal of transferring of awards into different names, easily done when these accounts are "tracked" on a computers' database. The penalties can be harsh: Denied boarding of a flight and confiscation of tickets, to closing the frequent flyer accounts of any member caught "dabbling" with these brokers.
But buyers beware! The coupon brokers are not above pulling a fast one on the unsuspecting traveler looking for that great bargain. The brokers have been known to renege on a deal in failing to pay the program member for the precious mileage and, what could be worse in many instances, using information gained (account numbers, PIN codes, etc.) to pilfer miles from the members' various accounts. Unfortunately, when the time comes to approach the broker in question regarding this travesty- they will have been long gone, remaining true to their elusive nature.
Our advice: Stick to the straight and narrow and avoid the coupon brokerage industry, unless you want to take a chance on gambling with those treasured and hard-earned miles.