Yes .. this sounds illegal.

I checked into a *wood last year (unnamed) and was told the rate went up because I had put in my request an upgrade (like I usually do only for special occasions/leisure trips). Being a Plat, I am often given this upgrade gratis but was stunned that they were insisting the upgrade was a +$100 increase in rate. I called SPG Plat line and they squared it away immediately and said the hotel was in error. Call SPG .. they should take care of this ...