Fraudalent collection of miles
 

What would you do if a friend told you of a great way to collect FF miles into your account, but at the end of the day it is fraudalent? I am not specifically sure if it is against the law, but it definitely violates the TOS for the airline FF program.

Do you just talk to them, do you report them or do you do nothing?

(Note to Mods - not sure if milesbuzz is the right forum, but since it relates to miles I thought it should go here, if not feel free to move as appropriate)

I certainly would not participate.

I would tell them of the potential consequences if they get caught.

Of course, if they are getting miles fraudently (spelling?), then there could actually be some legal ramifications.

William

I would definitely not snitch on anyone. The only crimes I might report are those involving death or grievous bodily harm (incl. rape), and I would not be sure whom to report them to, considering the level of corrupt police(wo)men -- especially the marauding murdering morons in the so-called intelligence and secret services of all countries.

I probably would not participate in a fraud unless it is obviously once in a lifetime option.

I might participate if it is an airline/miles granting body I do not plan to use legitimately ever in the future, but even so only if it is only against the agreement, but by no means against the law. But the motivation would have to be truly substantial.

This is not because I have higher moral standards than the others, but because it takes an effort to take part in a fraud. -- Much easier being legal.

Sounds like a moral dilemma. To fraudulently collect miles - well, for me, it would be a bad idea. If nothing else, the guilt or the concern over being busted would almost certainly overshadow almost any benefit.

I agree with Master - it's much easier being legal.

But in the end, what can you live with?

It is not a question of me collecting the miles fraudently, I only collect them legally (Divinity student here :) ). My main question was do I talk to this friend, ignore it or go as far as reporting him to the airline?

Right now I am leaning to letting him know my thoughts and counsel against it, but not reporting him. It never crossed my mind to join him and pad my accounts, as much as I would like to.

As you know. Everything is open to interpretation and the airlines are the final judge when it comes to their Terms and Conditions. At times things will put up on this board that some call fraudelent, some call unethical, and others call normal.

My feeling is this. If it truly is fraudulent it won't take long for the airlines to figure it out. Miles are not FREE, whoever is "giving" them to you has to buy them from the airline. I am sure there are ways to illegally "buy" these miles, like hacking into the airlines computers, but generally they have pretty good systems to prevent that.

I think if I were you I would discuss it with your friend and make sure that his understanding and your understanding of the situation are the same AND that his/your understanding of the situation is accurate. Go to the website or view the material or whatever he is using to get the miles. There might be some fine print your friend has not read or understood. When you both fully understand it; if you still feel it is fraudulent I would explain to him that he could loose his account and any legitimate miles he has earned.

Then I would forget about it and go on with life.

It truly is a no-win situation for you.

I agree that I would not participate and you already said that that never was an issue. Even if he was a not a friend of yours, I would not report him to anyone because you could don't have proof that he actually did what he proposed (unless he showed you the mileage statement.)

I would definitely counsel him about the situation. You are in a better position than most friends since you are a divinity student as well as his friend. It would bother me as an individual that he was thinking/ planning on doing this. You need to be prepared to lose him as a friend, even if you did absolutely nothing. I certainly would have trouble looking at him straight in the eye and continuing my friendship, under the circumstances, even if I tried to forgive him. That's just me, though!

I think it would help if you could give us the details of how your friend is getting these miles fraudulently. If you could just give us the step-by-step procedures along with some weblinks to make it easier for us (to understand), it would be greatly appreciated.

Thanks.

The consensus seems to be that this behavior is wrong, or unethical, or (at the least) "dangerous" in the sense that your FF account could be terminated. In fact, if you asked this question of most FTers in the way posed here, I suspect that most (myself included) would respond negatively to the idea.

That being said, the Coupon Connection forum has lots and lots of people trading all kinds of items that are, no doubt, listed as "non-transferrable" or selling/trading things that aren't supposed to be bartered. (There seems to be a line drawn at the outright selling of miles, but my impression is that there's a lot of other trading going on that clearly violates stated rules.) So it seems that some folks, in general, are willing to bend/break terms & conditions to some degree. I'm not talking about interpretations of convoluted or vague rules -- we all know that these are rampant in the industry and everyone has their own take on these. But more often than not it's clear that something is against the rules and folks do it anyway.

I don't bring this up to accuse anyone, lay blame, or even state a moral objection. My point is simply that many people who, at first blush, would object to "stealing" miles or other subversive tactics, might have some tolerance level for going outside the strictly allowable.

i was in a similar situation with a friend who was involved in some shady retail
practices. he knows it's illegal but he can justify it so there is not much use
talking sense to him, and believe me i've tried. being a man of loose morals
myself i didn't report my friend's fradulent activities, but i can see how someone
with strong beliefs might struggle with this dilemma.

now if i was an enterprising individual, i might find some way to blackmail this
supposed friend ;)

Illegal vs. Wrong
 

There are many people out there who know of ways to beat the house when playing at a casino. Technically, it's not even cheating, and I personally think there is nothing wrong or illegal about counting cards, you're not hurting any of the other poor folks playing, you're just cutting into the casino's profit, which has been coming from my wallet for years. But, if you do it and get caught, the casinos will ban you from even walking in to any of their establishments.

If you do actually cheat at a casino, by either having an inside man, palming chips, etc. Then you'll be arrested along with your cohorts and still be banned from the casinos.

My guess is your friend's system is wrong but not illegal. These gaps tend to be figured out very quickly by the airline, so it probably wont last. If you really feel a need to take some kind of action, call the customer service center for whatever company your friend is taking advantage of and ask them if it would be alright to do what he's doing. If they have any common sense, they'll fix the glitch. If they don't mind, then you can go publish his system here on FT.

Just my two cents.

-Matt

Part of the problem is that everyone has a different definition of "fraudulent" unless it's specifically against a law, which the OP said this isn't. For example, suppose you're rerouted involuntarily on a different airline than the one you booked, and you are also a member of that airline's FF program. You give them their number and get miles for the flight you took. Then you ask the first airline for miles for the flight you booked and probably get them too. Some would call this fraudulent. Others would call it "playing the game" or fair compensation for the inconvenience of the reroute. I'm not coming down on either side of this example, not saying that people who won't take double miles have the moral high ground, just saying that my fraud may not be yours or vice versa.

So it is with a lot of the mileage-earning schemes that have been discussed here and elsewhere. Is buying a gift certificate with a mileage-earning credit card and redeeming it for cash (perhaps minus a trivial purchase) fraudulent? It isn't what the people who set up the rules had in mind, it's taking advantage of them, it's costing them whatever they pay for miles or for accepting a credit card, but is it fraudulent? I don't know. In this case I'd say it isn't as long as the rules allow each individual step in the process, even if the end result is to get miles that the store didn't plan to give you at its expense, but others would differ.

What this comes down to is, without knowing more about the scheme/scam, I can't say how hard I'd be on the person who proposed it. If I thought it really crossed the line with no wiggle room, I'd probably say "I just wouldn't feel comfortable doing that" and drop it.

The sad part is that this might end the friendship by revealing a side of the "friend's" character I hadn't known about previously.

Maybe you could elaborate. I cannot tell if I think that something is fraudulent without knowing a bit more (and perhaps collecting few miles for myself too ;) ).

Quite often people have different opinions what is "fraudulent" and what is not. Do you think that it was fraudulent to purchase $20 tickets to KEF or $20 tickets to all European destinations? Is it fraudulent to puchase gift cards to get miles and then cash the giftcards? Someones dog took a test drive last year to collect 10000 BA miles in his masters account. Was it fraudulent?

I tend to agree with the poster above. The airlines/companies have total control over their respective programs.

Quite often people have different opinions what is "fraudulent" and what is not. Do you think that it was fraudulent to purchase $20 tickets to KEF or $20 tickets to all European destinations?

No. Offer and acceptance.

Is it fraudulent to puchase gift cards to get miles and then cash the giftcards?

No. Offer and acceptance of a legal transaction.

Someones dog took a tst drive last year to collect 10000 BA miles in his masters account

Yes a fraudulent activity. The Dog never drove and the Flier purposely misled to earn the stated points.

Yes, it's a very fine line.

Last year there was a mistake made on Best Buy or Circuit City (one of those similar stores..). Anyway, you could purchase a digital camera online for $500 and when you added it to your Shopping Cart you got a 100% discount for it, meaning you only had to pay for S&H.

Was it legal? Yes. It was purely an 'offer and acceptance of a legal transaction'

Was it ethically right? Probably not, since it was not the intention of the seller.

PS The company in question received hundreds of said orders and cancelled them all once it realized the mistake - they did not honor any of them...

Must have been Fry's :)

Did I miss this? I remember seeing the $20 to KEF but to all European destinations? :confused:

Yes. December or November 2002 BA mistakenly loaded $20 fares in WT+ from all of their US gateways to all European destinations. The deal was good for few hours on that Friday evening.

A friend of mine works for a FFP "fraud" dept. It is very interesting to hear all about the different scams and holes in the systems that are used.

It is amazing to hear that some people have earned millions of miles through fraudulent earning.... he was saying that when he calls to talk to these people to let them know that they have been caught etc that most of them have absolutely no remorse what so ever. Some even dispute the fact that they should have the accounts closed!!!

From what was said, fraud detection worth a lot of money to airlines so I imagine that it is only a matter of time before the loop-hole is closed.

I would not recomend taking him up on his offer as you will probably loose the account, miles, status and possibly more.

To add to the stories... Remember TG and their mess up with their LHR-BKK fare that fine April/May day last year? You could book a LHR-BKK in any cabin class (so you would have been dumb not to have booked F) and all you had to do was pay the airport taxes, which was aorund 50GBP if I remember correctly.

They didn't honour it, unfortunately... :mad: But if they did, that would have been a real blast! (It was towards the end of the SARS epidemic and some people actually thought that this was for real and not an error.)

Please advise us of some of the more lucrative schemes that have been uncomvered, and how the abuser "slipped up" allowing them to be caught. Thanks. ;)

Remember the AC agent at LHR, last year? Maybe not a big one, but did you also notice how the airline sort of swept it under the carpet? My point is, these things are going on from somewhere inside the airline, too. So even if you report it, chances are nothing will be done about it unless the media gets wind of it. Then a little cosmetic glossing over until it disappears, and it's business as usual for everyone, including the perpetrators. Trust me. Better to simply voice concerns to the friend.

Some details for those who asked...
 

What has been disclosed to me is two fold.

For hotels etc., this person unplugs a lamp or something then heads down to the front desk complaining that the said lamp (now in his hands), caused him to get a shock. As a result of this mistreatment he either wants a free stay or a ton of hotel points for compensation and does not leave the desk until they give him something. BTW there is nothing wrong with the lamp.

The second thing he is doing is flying airline A, crediting the miles to airline B, then using an online missing points interface to still collect the miles in airline A's program. In essence double dipping.

Neither sits well with me. I am always ready to take advantage of misloaded fares etc., but this is outright deception or fraud, IMO.

Neither is legal, IMHO
 

Neither of the two is legal (both frauds IMHO), but both are borderline stupid if applied more than once in this day of computerized records...

I guarantee that the lamp-shock trick is recorded in someone's database by now, along with you friend's name, and sooner or later, he'll be found out. Then who knows? It could be that nothing happens, or it could lead to a ride to the local police station in the back of the car (never a good thing). Do this in some countries, and the local cops might beat the living (mushroom) out of you along the way.

As far as double dipping, this is a common ploy, which is usually discovered by the airline's auditing procedures. It may take a while (like a year or two) for them to catch it, but once they do, the least they will do is close your buddy's accounts, thus forfeiting the earned (and unearned) miles and again, this could also lead to jail time, although it's unlikely.

I wouldn't risk being caught doing either one (even if I were devoid of morality), because the risk/reward ratio is so out of whack. There are enough legitimate ways to earn miles, to attempt fraud is just not worth it.

I'd advise your friend to cease and desist, and to hope he doesn't get caught. Since no bodily harm was involved, I wouldn't rat him out to the companies involved, however.

IANAL, of course (I Am Not A Lawyer).

-Plat

I worked at a (nice, but non-chain) hotel in college. They never gave us any official training on this sort of thing, but even as a stupid college kid, the difference between a legitimate complaint and a concocted complaint was typically blatantly obvious. The hotels know exactly what is going on with this type of customer. Knows they are going to have them. And knows that the rest of us have to pay more to cover these cheapskates. Its just a cost of doing business.

My question is why does your friend stop with hotels & airlines. Slip & fall works at every retail business in the U.S. and you can always find a guy like John Edwards to take your case.

Or you could always try and find a guy like Dick Cheney and get your company and yourself a few lucrative government contracts... and then every last tax-paying American pay to cover the cost of the sleazeballs. ;)

I remember hearing a story of a guy in college who said he was going to let loose a pet mouse into his hotel room and then call up the hotel staff and complain about a rodent. I don't know if he ever did do that.

JAIL TIME.

OH that is funny-for double dipping?

Couldn't be - other than the sad attempt with outpost.com Fry's hasn't figured out how to sell online :). You have to go to a store to truly "experience" Fry's!

In order for there to be fraud there must be the intent to deceive.

Buying gift cards or travelers checks for the miles and then cashing them in are two independent legal activities and therefore not fraud.

Back to back ticketing is against the rules for airlines that have such rules. But it is not fraud.

Travel tips:
http://members.aol.com/ajaynejr/travel.htm

Sounds like Strange Brew. 'We like found a mouse in this beer, eh?'

back 10+ yrs ago, there were multiple benefit cc's that matched each other in treating balance transfers the same as a charge...for 3 or 4 months, i would charge everything to card 1, pay it off w/ a xfer check [iirc] to card 2 , etc...i didn't consider it fraud because it was announced & i was doing what they were promoting....however, i knew that their goal was to get interest on the xfered bal's & thought "make hay while the sun shines].

Mapleleaf: Both of those schemes are fraudulent even under the most narrow use of that term.

Sooner or later your friend will get caught. I doubt he will face criminal prosecution (the police, at least in this country, have better things to do than to chase people claiming miles that they don't deserve), but he may very well be booted and banned from certain hotel properties and lose his cherished FF miles.

Why would someone who obviously treasures his FF miles risk losing all of them with these types of schemes? Then again, why did Martha risk losing millions by lying about a $60,000 stock trade? :rolleyes:

Penny wise, pound foolish.

I think it depends on the state. In NJ I can say that fraud like the lamp example is taken very seriously. Maybe they would prosecute, maybe they wouldnt, but there would at the very least be a legal headache. The second, probably not but I agree that the auditors would pick it up at some point.

Yes it is.

i have booked back to back flights for mr's, but have always booked w/ res & told them what i was doing...no problem....however, if i had been booted out of the program, i don't know what i would have done....i think i could have made a good case, they were always get off the plane and get back on, so more revenue for the a/l & wouldn't have done it otherwise for higher prices. however in circa 84 we did a lot of company travel [booked by co travel dept] of the wk1 mon-wk2 fri, wk1 fri home, wk2 mon back...all of us thought it made sense because we were focusing on the bottom line.

If someone told me they were doing this I would point out that this is against the terms and conditions of the frequent flyer program(s), and that there is a very high probablility this scheme will eventually be uncovered. Then they will lose all their miles in one or both programs. I doubt that the airline would prosecute or attempt to recover revenue from fraudulently accrued and redeemed miles? Then I'd leave it up to them to decide if they wanted to continue with this practice.

The lamp thing sounds like extortion to me but I'm no lawyer.


Edited to add;

a.) Double-dipping as a result of an involuntary re-route was, I thought, perfectly acceptable to both FF programs. I've never had to take advantage of this.

b.) Some FF programs have lower status thresholds for residents of certain countries. More than few people circumvent this by establishing a questionable or marginal domicile (a friend accepts their mail, they use a business address, etc.). I think this fraudulent.

c.) Some FF programs target offers to certain customers, based on their address, of competitive FF programs. Some of these programs are incredibly generous, maybe offering to match their mileage balance in the new program. Many people circumvent the residency requirements with a bogus address. I think this is fradulent.

I am not a lawyer and I doubt one would know the laws of every country were FFP are available, but reading this thread, I was wondering...

1. Is it legal somewhere to sell the same thing different prices based on the origin of the buyer ? Can a store say : you're from Canada, you'll pay more for the same products bought in the same conditions ? I don't know for sure, but I seem to remember that a store owner in Denmark was fined because he refused to sell his pizzas to German and French citizens. If he couldn't refuse to sell, I suppose he couldn't have made them pay ten times the price...

2. How is it different to sell the same products at different prices and selling a product (a plane ticket) the same price but granting different rebate based on the origin ?

I am not using a false address myself (partly because I usually reach top-tier in my home program without doing it) but I contemplate it often when I think to this practice of treating customers inequally. I know the rationale of trying to attract foreigners to your market, but anyway :(

Last month in LAS the price of the RIO's buffet depended on where you live. (The locals paid half price.) Chain stores (like Best Buy) regularly match local competitors' prices.

Is it legal?

Museums frequently charge difference prices for residents and non-residents.

QL

As do Harley and some auto dealerships.

ljr