spartacusmcfly

Every time someone posts a new story here, I pop onto a marketplace to see whether UA's efforts are working and prohibited activity is declining. Surprised at what I saw this evening on ebay:

escapefromphl

That’s what happens when you renew everyone’s status for 2 yrs in a row. I bet they just ignored this over the pandemic and are just stepping up enforcement now - there will probably be a couple of people saying “But I didn’t know” over the next few weeks.

ani90

This probably means only a minority of those selling these instruments are pursued and excluded from the program. Especially considering that many of these, by definition, are instruments granted to high value flyers it seems to me that United may be chosing who they do choose to pursue and who they ignore. I suppose just like the speeding example where certain profiles of 'speeders' may be more likely to be stopped by police, while the vast majority are ignored.

kirkwoodj

Wow.

spartacusmcfly

So given you're a lawyer, can you answer this question:

Why can't United (a $15B company), go to eBay (a $35B company), and simply say people are selling instruments they don't own, in violation of rules x, y, z...

Isn't it like someone renting a car from Hertz, then selling it on ebay?

I know companies like Louis Vuitton have good relationships with marketplaces.

And given there are only four marketplaces that matter in the US (ebay, craigslist, FB, reddit) it should be easy to get the platform to disallow these types of postings, right?

HNLbasedFlyer

Selling your upgrade on Ebay is not illegal - it is against UA policy.

Selling your Hertz rental is illegal

Selling counterfeit goods is illegal

dilanesp

I preface this with I am not a tax lawyer, so please don't take this as any sort of expertise.

But... whatever the taxable value that is placed on an in-kind FF benefit (apparently zero), I would think that selling it for cash creates income for the seller, right? If I am given something that lacks a market value, that might not be reportable income, but if I can then somehow find someone to buy it for $10,000 anyway, that $10,000 would seem to me to be reportable income.

Well, first of all, eBay has Section 230 immunity. So it's a complicated question whether they bear any legal responsibility for posts on the site that violate UA's contracts. I would assume that would be a defense to any suit against eBay for inducing breaches of contract or some similar theory.

Now, it's possible that these violate eBay's terms of service, and that UA could get eBay to take them down. Indeed, it's possible that some of them do get taken down- we only see the ones that are still up. But I don't know eBay's terms of service on stuff like this.

spartacusmcfly

Would the PPs be considered stolen, given UA maintains ownership of the PPs?

So seller is selling something they don't own. If so, it's prohibited by ebay:

https://www.ebay.com/help/policies/p...policy?id=4334

spartacusmcfly

How is it different? You are selling something you don't own. That's illegal.

I believe the terms state PPs belong to Mileage Plus, therefore only United has the right to sell them, correct?

dilanesp

Very possibly not, although a lot depends on how eBay interprets its own rules.

IAH-OIL-TRASH

I’m pretty sure eBay has no interest towards getting into the rule weeds of every consumer program that has a benefit that could be sold contrary to program rules.

They’ll crack down on anything it knows to be illegal, but only consider a request by a company such as UA not to facilitate sales of benefits. If UA has made such a request, it seems like eBay isn’t working too hard on it. I think eBay would prefer UA to enforce its own rules by maybe instituting redemption procedures that make it hard to use eBay.

As far a criminality, it seems UA could claim theft, but that means filing a police report, etc, where cost and resolution benefit would be lacking. Much easier just to shut accounts per their perogative.

HNLbasedFlyer

United doesn't claim ownership of your miles - the cliff notes is they retain control of the program and can do whatever they want to do (give miles, take miles, expire miles, devalue, end program, etc to members). It is simply a program rule that everyone agrees to when you join that you cannot sell the miles.

PTahCha

No need for UA to report the income, as TomMM had already pointed out:

Who says they haven't done that already.

For the seller, the taxable value is the revenue generated from the transaction (the selling price). The benefit to the recipient is not relevant to the taxability or taxable value. Fun Google search also found that the case Charley v. Commissioner (1996) determined that frequent flyer miles earned from flying have no cost basis.

emcampbe

How could UA make it hard to use eBay for, while still offering the flexibility that current policy allows?

UA could make this hard, by, say instiuting a policy where a recipient of PPs needs to be a traveler on an itinerary where they are used. But that would offer a lot less flexibility, and any change like this would immediately bring a thread on this forum that is tens of pages long. They are ok with members using them for family, friends, companions, etc. as long as they are not being sold. Short of eBay blocking the sale of this 'advice', there is no way for UA to keep the flexibility PPs currently have, while making it hard/impossible to use on eBay. Unless you think they should go down the old road of blue slips(?) - IIRC, there was a time where these were required for 'approval' of using someone else's PPs. But c'mon, it's 2022 - that's not going to happen.

supine

An alternative that UA could use is forcing you to nominate a limited number of other MP members you would be upgrading when not on the same itinerary. You could make changes but only so many per time period so it would essentially cap the customer base for those selling upgrades.

E.g.
4 upgrade "friends" slots
Each time you nominate someone that slot is frozen for twelve months, can't be changed before then.

That would probably work for almost all of the legitimate use cases, catch out a small group of folks who truly gift upgrades to many people but actually make it really difficult to make serious coin from selling upgrades.