DOT to Audit Frequent Flyer Programs

The Transportation Department’s inspector general plans to conduct an audit of frequent flyer programs to ensure that airlines are in compliance with disclosure requirements. In a memo to the DOT general counsel, who oversees enforcement, the inspector general noted that the department does not directly regulate the terms of frequent flyer program contracts, but it does require disclosure of their rules.

The DOT also provides “guidance” on disclosing costs: Any government fees or taxes or mandatory carrier charges, including processing fees charged to members of awards programs, must be shown on the airlines’ websites. Failure to adhere to the guidance “could constitute an unfair and deceptive practice,” the memo said.

The audit, which is slated for later in September, comes at the request of Rep. Alan Grayson (D-Fla.), who “expressed concerns about the lack of transparency for consumers when airlines change their frequent flyer program terms and conditions.”

– Michele McDonald