Australian regulator raises concerns over airline loyalty schemes
Australia’s competition regulator has taken aim at loyalty programmes, saying customers are getting a raw deal and are not given clear information in how their personal data is being used,
The Australian Competition and Consumer Commission released a draft report covering all areas of the loyalty industry and reserving special criticism for airlines.
The high ‘carrier charges’ imposed by airlines sometimes make free reward flights relatively worthless.
"Many people think they can redeem their points for a free flight, but in some cases, the cost of purchasing an airfare without using points may be similar to the cost of a flight using points once the airline adds on taxes and charges." The ACCC’s chairman Rod Sims said.
"The privacy policies of these schemes are frequently very vague and don’t tell consumers who their data is being shared with or how it is being used, shared or monetised."
"The data that loyalty schemes collect can be used to profile consumers and produce insights about their purchasing behaviour. These insights about consumers may then be shared with or sold to third parties," Simms added referring to programmes across the industry and not only airlines.
Virgin Australia contributed to the draft review and would work with the ACCC to meet any recommendations included in the final report.
Virgin’s Velocity Frequent Flyerhas nearly 10 million members, Virgin said.
Rival Qantas was more combative, insisting it offers ‘significant value’ to members and communicates any changes and updates to loyalty members.
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