German customer sues for cash equivalent of miles, M&M suspends hotel point transfers
Jun 9, 2019, 6:21 am
#16
FlyerTalk Evangelist
Join Date: Sep 2005
Location: Capetown
Programs: Marriott Lifetime Plat, IHG and Hilton Diamond, LH SEN, BA Gold
Posts: 10,167
Usually, "money" is defined as something that is generally accepted as payment for goods and services (and for the settlement of tax obligations).
In practice, "generally accepted" in interpreted with some lenience. So it doen't mean universally accepted or something. But, for instance, if there's a chip on your employee ID on which you can store money to use for nothing but the firm's cafeterias and other in-house shops, that's not considered money.
I think the lawyer's argument that M&M miles are broadly accepted has little merit. I see LH's reaction as a precautionary measure. Even if their chance of losing is fairly small, there's so much money at stake that they do it.
In practice, "generally accepted" in interpreted with some lenience. So it doen't mean universally accepted or something. But, for instance, if there's a chip on your employee ID on which you can store money to use for nothing but the firm's cafeterias and other in-house shops, that's not considered money.
I think the lawyer's argument that M&M miles are broadly accepted has little merit. I see LH's reaction as a precautionary measure. Even if their chance of losing is fairly small, there's so much money at stake that they do it.
Jun 9, 2019, 6:28 am
#17
Join Date: Mar 2016
Programs: BAEC, Ib+, Accor, HHonors
Posts: 609
Usually, "money" is defined as something that is generally accepted as payment for goods and services (and for the settlement of tax obligations).
In practice, "generally accepted" in interpreted with some lenience. So it doen't mean universally accepted or something. But, for instance, if there's a chip on your employee ID on which you can store money to use for nothing but the firm's cafeterias and other in-house shops, that's not considered money.
I think the lawyer's argument that M&M miles are broadly accepted has little merit. I see LH's reaction as a precautionary measure. Even if their chance of losing is fairly small, there's so much money at stake that they do it.
In practice, "generally accepted" in interpreted with some lenience. So it doen't mean universally accepted or something. But, for instance, if there's a chip on your employee ID on which you can store money to use for nothing but the firm's cafeterias and other in-house shops, that's not considered money.
I think the lawyer's argument that M&M miles are broadly accepted has little merit. I see LH's reaction as a precautionary measure. Even if their chance of losing is fairly small, there's so much money at stake that they do it.
Now, if it turns out that miles from Miles&More are e-money, then users have the right to claim them in Euros (the BaFin has two exceptions to them: meal vouchers and money on prepaid sim/phone, where users are not allowed to claim the value in Eur).
Jun 11, 2019, 1:29 am
#18
Join Date: Feb 2016
Programs: MM, EK, HH, etc.
Posts: 381
I appreciate that this, at the moment, is a German issue (who is to stop similar concerns arising in other jurisdictions, though), but how come only LH MM seems to be taking precautionary measures? I would assume any other program operating in the German market (which could theoretically be any similar program with Germany-based customers and trading partners) would be subject to the same restrictions...
Jun 11, 2019, 2:34 am
#19
Join Date: Apr 2019
Posts: 57
I think the lawsuit is a very long shot. As posted above, one thing they would have to prove is that miles are to be considered e-money which is a stretch.
But M&M is the largest points program in Europe. In the unlikely event this lawsuit was successful, LH would have to re-appraise the outstanding mileage for its financial accounting. That wouldn't be pretty to put it mildly. So I think that's the rationale why they're being cautious. Not even speaking of the follow-up lawsuits. So it's a low-probability event but if it realizes the damage will be quite big.
But M&M is the largest points program in Europe. In the unlikely event this lawsuit was successful, LH would have to re-appraise the outstanding mileage for its financial accounting. That wouldn't be pretty to put it mildly. So I think that's the rationale why they're being cautious. Not even speaking of the follow-up lawsuits. So it's a low-probability event but if it realizes the damage will be quite big.
Jun 11, 2019, 6:40 am
#20
Join Date: Dec 2009
Posts: 1,752
Yes, big risk for LH. My guess is the lawyer looked at what happened in the last case (in 2013, LH lost in a lower court, then won in the Oberlandesgericht Köln (regional) court, and then settled before it went to the Bundesgerichtshof (Federal Supreme Court)). I'm pretty sure the settlement included legal costs, so if something similar happens this time it is win-win for the lawyer (plus some publicity).
Unfortunately, this lawyer has the the potential to ruin things for the rest of us.
Unfortunately, this lawyer has the the potential to ruin things for the rest of us.
Jul 1, 2019, 3:35 am
#21
Join Date: May 2018
Location: FRA
Programs: LH SEN
Posts: 1,494
So I'm just catching up on this whole story after finding out the hard way that my points are now trapped in Hilton Honours. 
It was really nice of M&M to notify us of this by putting out that prominent press release when the change happened. Oh, you don't remember the PR? THAT'S BECAUSE THERE WASN'T ONE.
It was really nice of M&M to notify us of this by putting out that prominent press release when the change happened. Oh, you don't remember the PR? THAT'S BECAUSE THERE WASN'T ONE.
Jul 1, 2019, 3:43 am
#22
FlyerTalk Evangelist
Join Date: Sep 2005
Location: Capetown
Programs: Marriott Lifetime Plat, IHG and Hilton Diamond, LH SEN, BA Gold
Posts: 10,167
Yes, big risk for LH. My guess is the lawyer looked at what happened in the last case (in 2013, LH lost in a lower court, then won in the Oberlandesgericht Köln (regional) court, and then settled before it went to the Bundesgerichtshof (Federal Supreme Court)). I'm pretty sure the settlement included legal costs, so if something similar happens this time it is win-win for the lawyer (plus some publicity).
Unfortunately, this lawyer has the the potential to ruin things for the rest of us.
Unfortunately, this lawyer has the the potential to ruin things for the rest of us.
Hotel point transfers...
Jul 31, 2019, 9:55 am
#25
FlyerTalk Evangelist
Join Date: Nov 2006
Location: Stoke on Trent, UK (MAN ), BUE, BKK, DBV
Programs: LH HON***,UA,BA.EK Gold,AV.
Posts: 11,632
Aug 6, 2019, 7:29 am
#26
Join Date: May 2018
Location: FRA
Programs: LH SEN
Posts: 1,494
It's worse for Hilton because you can't directly earn M&M miles so you can only get their points which remain trapped.
At least most other properties still allow direct earn of miles even if conversions are blocked.
Oh, and someone should tell the M&M helpdesk. I have a ticket open with them and they just keep cutting and pasting a stale FAQ answer at me
At least most other properties still allow direct earn of miles even if conversions are blocked.
Oh, and someone should tell the M&M helpdesk. I have a ticket open with them and they just keep cutting and pasting a stale FAQ answer at me
Aug 6, 2019, 4:10 pm
#27
FlyerTalk Evangelist
Join Date: Feb 2002
Location: Montreux CH
Programs: FB Platinum, M&M FTL, BA Blue
Posts: 11,619
I had understood that Melia was back on, but it might have been a badly worded email that I got. I think the hotel programmes aren't sure how to handle it, so they're just bumbling on while hoping it all sorts itself out.
Aug 8, 2019, 7:08 am
#28
Join Date: Nov 2013
Programs: AA Lifetime Platinum; Amex Plat; Four Seasons; Fairmont; HH; etc.; "Retirees-In-Training"
Posts: 658
The problem is related to buying points. According to the BaFin (Germany´s Federal Financial Supervisory Authority) points/miles program are not considered e-money as long as the user can not buy the miles/points. The lawyer´s argument is that, even though Lufthansa Miles&More does not sell points to you, they sell it to other third parties, where you, as a user, can buy them. So basically, Lufthansa Miles&More is selling, indirectly, miles to the end-user.
Now, if it turns out that miles from Miles&More are e-money, then users have the right to claim them in Euros (the BaFin has two exceptions to them: meal vouchers and money on prepaid sim/phone, where users are not allowed to claim the value in Eur).
Now, if it turns out that miles from Miles&More are e-money, then users have the right to claim them in Euros (the BaFin has two exceptions to them: meal vouchers and money on prepaid sim/phone, where users are not allowed to claim the value in Eur).
), so IF this were happening with AA instead of LH, would something like an average purchase price be used?(We haven't "needed" to do this yet, but it's nice to know that we could, if necessary.)
Also, are there other FF programs where one can just "buy" the points?
GC
