EMan

You may be spot on there, Steve M.......How do we really know?

This site has taught me these 2 lessons (and more):
1. To extend my 1-2 GPUs to April 30, 2016, if they remain unassigned come January 31, 2016. (Assuming UA [quietly] continues this perk.)
2. To make a determined effort to publicize and gift my unused GPUs before they expire. At least I'll have the satisfaction of knowing that someone received an upgrade in lieu of paying an exorbitant Business/First Class fare. (In prior years, I would have just let them expire!)

Nothing personal UA, just business.

Tchiowa

Mileage Plus rules: https://www.united.com/web/en-US/con...s/default.aspx Paragraph 8, as you say.

"The sale or barter or attempted sale or barter of any such mileage, certificates, awards or benefits other than as authorized and/or sponsored by United is expressly prohibited. Any mileage, certificates, awards or benefits transferred, assigned or sold in violation of the Program Rules, in addition to exposing the member to the penalties otherwise associated with violations, may be confiscated or canceled. The use of award tickets that have been acquired by purchase, barter or other conduct in violation of Program Rules may result in termination of membership, cancellation of accrued mileage, certificates, awards or benefits, confiscation of the tickets, denial of boarding with respect to the ticket holder, and, at United's discretion, completion of the travel only upon payment of an applicable fare."

LaserSailor

Cue the " but I didn't really expect them to enforce this and no reasonable person would agree therefore it isn't legal" crowd.

Often1

This guy was engaged in commercial fraud. This isn't somebody who used miles/cert for a cousin and took a bit of cash on the side when he should not have. The commercial fraud costs carriers a ton of money and carriers spend a lot purchasing software to catch it and hiring investigators to pursue it.

The problem is that UA likely catches only a fraction of the fraudsters. So, it makes an example of the ones it catches. While it is likely that UA makes more money from a GS than a mortal, it is also likely that the cost of the fraud + catching is is a whole lot more than the profit from the fraudster. So, firing the fraudster makes sense. Don't forget that UA can and likely will go back for a few years and pursue the fraudster for the value of the fraud which can be quite significant. In the extreme, this is also a federal felony and likely a violation of most state criminal laws.

This also gets rid of the, "they won't fire me because I'm GS and too important to fire". Sends a message to others.

It would not surprise me one bit if the carriers share their fraud databases. The last thing AA wants are UA's frauds and the same for UA. So, it makes sense.

bseller

Extreme is a good use of word here. I'd be curious what federal statute you think a sale of upgrade instruments might run afoul of?

Dave

Often1

It's good old-fashioned wire fraud. As noted in my post, it's in the extreme. But, we have no idea of the extent and commercial nature and thus the dollar value of the fraud.

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. Title 18, United States Code, Section 1343.

bseller

WHO was defrauded through this transfer of instruments? I'd argue that no one was defrauded. FWIW, I have personal experience with MP rules violations and the accompanying sanctions.

Dave

EMan

You might be right about the economics but I think there's one important point to stress:

You can give GPUs away to anybody for FREE!!

So, is UA losing money? That is the $1K Question.

I think the opposite is true..........Catch a GS selling a GPU, close his MP account, make thousands of dollars! (I know for a fact that UA has at least one person doing this and catching the guilty 1K/GS people is like shooting fish in a barrel......No special software needed, just an internet connection.) If I was desperate for cash and was at war with the world, I'd offer to do the job for UA on a commission-only basis. (One less cost for UA.)

I plan to spread the word to the GPU sellers on the internet that it's just plum crazy to sell/barter their GPUs. (It's too easy to get caught and there's no MAYBE in the penalty enforcement by UA, unlike the language written in Paragraph 8. of the T&C!) Another question arises in my mind here: Would UA thank me for helping prevent the sale of GPUs, OR punish me for cutting into their revenues?

Net-net: Surprisingly, I think we are in agreement! ^

Steve M

I've already explained this, but I don't mind repeating: the discount ticket broker situation. There's a certain kind of passenger that wants or needs to travel in a premium cabin internationally, but does so on a rare enough occasion that they don't belong to FF programs to the extent that they can upgrade themselves, and are only vaguely aware of the rules, if that. They may get a quote from a carrier's website for a Business ticket to, say, Europe or Asia or wherever they're going, and choke on the price. Then they search on the Internet, or find an ad in the paper, for someone selling "the exact same seat at a discount price." The passenger may very well be able to pay and would pay the airline the published fare, but who wants to pay more than they need to, even if they have the money? These brokers are very good at making everything seem on the up-and-up, and if you didn't know much about the premium-cabin international market, you'd have no reason to suspect anything was amiss. Then there's another set of passengers that don't care that the ticketing is improper - they just want the discounted price.

So, that's one way it costs the carrier money. A secondary way is in the lack of "breakage." They know that if they issue each 1K/GS 6 GPUs and 4 RPUs a year, that overall, x% of them will expire unredeemed, and this goes into the calculation of how many they can "afford" to issue to each tier. If there was a liquid and open market for these to be freely sold, then far fewer of them would expire unused. Also, if every GPU was used by the end of the year (with many of them being by very infrequent flyers), the chances of a high-revenue Platinum flyer getting an upgrade would go down, upsetting that group of folks.

I think the notion of UA doing these enforcement operations as a direct revenue source as a means of cancelling their obligations to those flyers is tinfoil hat thinking.

sbrower

It does violate a criminal statute in California. I don't think anyone has ever been prosecuted, but it exists.

EMan

Wouldn't it be easy for UA to pose as a buyer, get the seller's MP account number and then close them down and make easy money? Sounds like about 1-2 hours work to me?

I also believe that if sellers were aware that UA is actively pursuing them, on the QT of course, with severe consequences if caught, they would give their GPUs away for free as opposed to letting them expire, thus reducing the value of x.

Is this Tin Foil Hat thinking or Real World thinking?

COSPILOT

Nothing is ever easy in a large corporate world such as UA. If it was, there would be no need for third party software to help combat fraud.

Giving away GPU's/RPU's to friends and family still leaves plenty to potentially expire, which I'm guessing UA is banking on. Advertising to the world via EBay or other methods sort of ensures less breakage and by default will take revenue away from UA.

Cargojon

Another interesting aspect would be if UA were to turn him over to the IRS to audit and see if the OP had paid taxes on the revenue received from his "side business."

There's a ton of different angles that could get the OP in a ton of hot water, he should probably be thankful that UA merely fired him.

COSPILOT

Not to get OT, but the IRS seems to struggle with finding the big offenders, I would hope they don't get bogged down chasing a few hundred in revenue from someone on EBay selling upgrades/advice.

Steve M

Yes, it would. But in your scenario, they'd be catching only those that are violating the rules on their own accord. They would be violating them whether UA or someone else made the purchase. This is different than a scenario such as sending a 1K/GS an unsolicited offer to buy upgrade instruments - that might be considered the same thing as what's called entrapment in a criminal situation.

But to believe that UA is doing this to "make easy money," you have to buy into the notion that they have whole teams of people at UA HQ dedicated to figuring out how to screw their best customers. I know some people in these parts believe that, but I don't think it's true. They may make bad decisions from time to time (much of the time? :-)), but the notion that they're actively trying to run off their best customers? I think it's just crazy talk.