Finkface

Did you ever receive any money at all from the exes or family? Or anything else in return for the tickets (i.e. They bought you a ticket on another airline or hotel rooms in return, or gave you something else in return for the tickets)? If so, that is the same as selling the miles. If you received anything in return for booking the tickets, it is against the T&C. In other cases posted here on FT, airport agents will ask the traveller how much they paid for the ticket. The wrong answer could be what got you in trouble here.

percysmith

We do have some of the statutory protections that exist in NSW https://www.consumer.org.hk/sites/co...301Full_en.pdf . Sale of Goods Act exists here, control of exemption clauses exist here (which covers part of unfair terms in NSW) exists here, unconscionable conduct exist here.

Also trade desciption offences false trade descriptions, misleading omissions, aggressive commercial practices, bait advertising, bait and switch and wrongly accepting payment.

It's not as strong or complete as the Trade Practices Act (which was the prevailing act when I was in uni as an accounting major), nor I suspect the Competition and Consumer Act that replaced it.

None of these statutory provisions apply here.
Control of exemptions will ask whether a condition (like don't sell or barter miles or awards) can be reasonably complied with --- in my view it can be
Unconscionable conduct will ask whether clause is reasonably needed by the other party. A clause that says the corporation gets to make all decisions, is final and can choose not to fulfil its obligations at any time is likely to be ruled unconscionable. But a no sale/barter clause has a revenue protection purpose for CX.

Furthermore the bigger problem is enforcement. See below.

Unlike the ACCC that can investigate and fine Australian corporations, our Consumer Council can do little more than name and shame, and in very limited circumstances fund litigation. There's only around A$3 million in the litigation fund, Government here is despearate not to do anything that appears anti-business.

I don't think the ACCC can find against a non-Australian corporation that has no presence in Australia. I struggle to think how it will enforce its penalties - tell Amex Australia to garnish its payments? (Amex Australia might respond American Express Inc in the US deals with AM...)

Personally I see resorting to the press is an option of last resort because it guarantees no results. AM may chose to ignore it (CX certainly has ignored Oriental Daily's series on service failings) and that will be the end of the matter.

Hong Kong law and non-exclusive jurisdiction of Hong Kong courts. This is unlike an air ticket where an airline can be sued if it has a physical presence in the passenger's home jurisdiction.

So to pursue AM you have to do it from HK. It won't be easy or cheap and (again our pro-business Government ensures) we do not have class actions or contingency litigation funding (well, NSW doesn't officially have the latter, but Victoria does). You're going to have to appoint solicitors to act for you but you probably won't recover enough to make it worthwhile.

(This is a problem I have with all overseas contracts, whether is it related to my membership and collection of Avios or buying holiday car insurance from the US or the UK)

QRC3288

ha, come on percy...this is when you step out of the legal speak theory world and into the real world. Your gym analogy isn't anything like his.

He's basically just saying "I transferred all these (flexible) miles into CX on account of some incentive, and then CX cancelled them as soon as CX got control." If you want to use the gym analogy..it'd be more like he paid up-front for a gym membership and paid for 5 years up-front due to some discount the gym was offering, but then tomorrow the gym transfers "ownership", and due to some super fine print the new owners say you're no longer a member, no refund and tough $$$$. Just ignoring the law here for a second, hey maybe that's legal but I don't really care. That's not right in my mind. And If I had an opportunity to, I'd go out of my way to screw over the gym owners in every single manner at my disposal. I'd make sure they would regret screwing me over that's for sure.

Forget the law, if he really did nothing wrong like he's saying (contrary to some of the hostile responses above...some guy calling him a troll?), he has clearly been wronged here by CX. Again, forget all the legalese. CX gets hard cash for those Asia Miles they sell to partners. That's real money. And by making those miles disappear into thin air, that's pure profit to CX's bottom line. That's what I call stealing. Maybe they'll get away with screwing him over, but it's a pretty bad look IMO. He may not have a way of seeking retribution, which would be unfortunate but is ultimately a question of the law, or who at CX he knows. But hey, karma comes back to bite. If CX really jacked all this guy's miles like it sounds like, that's not right.

percysmith

Be that as it may, it is for CX to prove. To what standard is in dispute (even among FTers) but when it comes before a tribunal or court AM surely has to at least prove a prima facie case before the member should be called to answer.

AM is probably expecting most members cannot get that far.

percysmith

Well even on a karma level I don't think this is gonna hurt CX.

We are all too price-sensitive. Are we going to care about the odd unjustified confiscation (or even if it happens to 1-in-10 members) if the redemption chart for AM looks signficantly better than anything Ben has got (QF, and the other Amex MR partners in AU)?

LondonElite

I was going to say something very similar. There are many stories on FT where initially it seems that no programme rules were broken, but then the complete story begins to drip out and it almost always is a case of there being some sort of 'transaction' between the traveller and the account holder. I really don't want to sound like I'm bashing the OP, but random closing for no reason is a relatively rare occurrence, at least based on what we read on FT.

I'm not a lawyer but I do spend much of my time working within the context of contracts, and I believe pretty much all FFPs have the 'at our sole discretion' text inserted gratuitously.

QRC3288

yea, i see your point.

i think if it became more widespread, they'd lose business. but i agree if they screw up once in a blue moon it won't hurt them.

percysmith

All firms try to put it in, the toner cost is negligible.
Whether it is enforceable is questionable - I had one corporation who ran out of arguments except to say my contract had a interpretation clause and they were unconditionally entitled to interpret themselves out of it at any time. I argued that (specific) use of the interpretations clause would be unconscionable as the use will have no other purpose other than for the corporation to escape liability when I have completed my side of the bargain. The corporation then stopped arguing.

LondonElite

I fully agree with you. The trouble that individuals have is that the cost of achieving anything meaningful beyond issuing treating letters is usually quite high. I can't speak for HK or AUS, but the UK (and many European countries) have a fairly easy small claims system (MCOL in the UK), which often has the desired effect. Companies don't want their (usually one-sided and unfair) policies exposed, so they settle. Few people have the time/stamina/knowledge to take it that far, though.

percysmith

Doesn't have to be as rare as a blue moon. iCable makes it its SOP to stop people from cancelling and people still sign up.

Or Cheung Kong properties or HK taxis - just as long as it's the most convenient option it'll win. Told you so will come in later.

Being the most convenient for HK people is CX/KA's USP...so other non-essential costs can go by the wayside.

And finally AM is the most convenient program for me and I suspect many others to accumulate for the awards we want.

percysmith

Well given how BA and other EU carries treat EC261 I don't think companies worry their penny-pinching anti-consumer policies come to light. It's just a matter of enforcement. And garykung is right to say it is hard here.

Ausriver

OP seems unfamiliar with the mileage system, as he said he didn't end of up with booking, 360k miles after few bookings for family is a lot of miles, so let's assume OP stared with 500k miles. Most DMs will need 4 year to accumulate that much miles and most SLs wouldn't even have that much miles in a lifetime. OP transferred from some credit card all at one chunk. And then OP started to book for friends without flying once with CX/KA, and he never booked him even one ticket using miles.

It simply doesn't look like normal. Why would you want so many miles in your account which expires in 3 years anyway but you never travel? I have "sold" miles a friend before when he needed a one way international ticket, I helped him with the booking at half of a return ticket. but I didn't open an account to solely booking flights for "friends". And I agree with even getting very little bit money from friends, it is still counted as "selling" and hence break the t&c.

carrotjuice

I read through the whole thread and am scratching my head on one fundamental - how can CX possibly know that OP has received monetary compensation from anyone and tie it back to having 'sold' his redemption ticket to that person?

d00t

Airlines are known to scour online forums and pose as travellers looking to buy miles tickets...

This aside, if we take a step back and look at how totally messed up this situation is from Asia Miles perspective:-

- Any miles sitting in Asia Miles = REVENUE BANKED. AM instantly takes a portion of the revenue and banks it as revenue earned.

- When AM are redeemed for a flight, AM pays CX for the ticket. CX makes money from the miles redemption. This is called positive working capital and is to the airlines' benefit to have more award seats redeemed.

- Killing off accounts for a 1st-time offender will fundamentally mean this customer will never do business with you ever again. If this customer has 100,000's of miles which could be transferred from credit cards, this is future revenue down the drain. And of course, this means no CX/MPO activity either.

- Let's say the OP did sell miles. The person buying them more than likely would never have paid for a business/first class seat anyway. There is no lost revenue opportunity. In fact, one could argue it's a revenue gain to the airline.

- Why the .... isn't Asia Miles selling miles at a reasonable rate? Doing so would instantly kill off this type of activity. Lost revenue opportunity RIGHT HERE!

- Other airlines no longer consider miles selling as 'loyalty fraud', but rather accept it as part of the normal business activity. It has a halo effect on the program.

Also don't forget that selling miles may be against the T&C, but it's sure as heck not illegal.

Personally and professionally, I think AM and any other program which shuts downs accounts for this type of activity are stupid. They just haven't figured out where the revenue is in opening up the opportunity.

percysmith

//Any miles sitting in Asia Miles = REVENUE BANKED. AM instantly takes a portion of the revenue and banks it as revenue earned.

No it's not from an IFRS15/IFRIC-Int13 perspective
It sits in "Unearned Transportation Revenue", a current liability on AM's (consolidated into CX's) balance sheet

A balance is not even revenue from a cash perspective
What if I credited from Amex and then went off to redeem a Qantas itin?

- When AM are redeemed for a flight, AM pays CX for the ticket. CX makes money from the miles redemption. This is called positive working capital and is to the airlines' benefit to have more award seats redeemed.

It is to AM's benefit (remember AM is still a 100% sub of CX, this isn't like Aeroplane and AC) to see the miles expire and write back the miles liability, just as long as the suckers will still keep carding.

//Killing off accounts for a 1st-time offender will fundamentally mean this customer will never do business with you ever again. If this customer has 100,000's of miles which could be transferred from credit cards, this is future revenue down the drain. And of course, this means no CX/MPO activity either.

Best not target the DM crediting from the Cent then. But certainly killing the newbie who credits a few hundred K and then issues them to everyone but itself

//Let's say the OP did sell miles. The person buying them more than likely would never have paid for a business/first class seat anyway. There is no lost revenue opportunity. In fact, one could argue it's a revenue gain to the airline.

CX (among others) use miles to practice price discrimination on high frequency routes http://www.flyertalk.com/forum/briti...l#post25916250 .

The big worry with a member who sells is he's gonna sell to the £7 or £5 business traveller in my ex-EU example above - revenue CX will rather receive in cash!

//Why the .... isn't Asia Miles selling miles at a reasonable rate? Doing so would instantly kill off this type of activity. Lost revenue opportunity RIGHT HERE!

If AM made miles accessible as a normal cash purchase they'd be cannibalising their cash fares and reduce their ability to practice price discrimination. In my ex-EU example, they only want the £3 passenger to be able to access the fare thru miles.

//Other airlines no longer consider miles selling as 'loyalty fraud', but rather accept it as part of the normal business activity. It has a halo effect on the program.

Look up BA audit and ex-gratia

//Also don't forget that selling miles may be against the T&C, but it's sure as heck not illegal.

Correct. They seem reluctant to even allege fraud. Instead they allege misuse, whatever that means, and sit on the miles and wait for affected members' writs. None have been forthcoming.

//Personally and professionally, I think AM and any other program which shuts downs accounts for this type of activity are stupid. They just haven't figured out where the revenue is in opening up the opportunity.

From both price discrimination and revenue protection perspectives they are doing exactly the right thing by closing down sellers.