I have until Friday to cough up $14,000 – should I pay?

Given my backlog of cases, it’s unusual to cover something I just heard about a few hours ago. It’s even more unusual to redact the name of both the passenger and the airline.

But as you’ll see in a minute, this is a highly unusual problem with an imminent deadline. At stake? The highest-level elite status and several million frequent flier miles.

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Oh, and the fate of our republic.

I’m kidding.

We have two choices here: pay up or fight. And by fight I mean I’ll go to bat for this customer.

So why no names? Because the airline alleges — and some of you will probably allege, too — that this customer did something he knew he shouldn’t. But I’m getting ahead of myself.

It all started with an email from the airline’s “corporate security” department notifying the customer that his frequent flier account had been suspended because of “fictitious bookings.”

It included a spreadsheet outlining about half a dozen reservations in business class that were not real. Rather than explain the problem, I’ll refer you to another case that involved an airline that may or may not be the one we’re discussing today.

The airline notes,

Our investigation indicates that on the dates above, you, or someone acting on your behalf, created the fictitious reservations detailed above for Business Class seats on flights in which you were ticketed in coach class and upgrades were requested.

The creation of these fictitious bookings is a clear violation of the Site Usage and General [Loyalty Program] Conditions provisions.

The Site Usage agreement clearly prohibits the use of the website to book false reservations. In addition, the General Program Conditions prohibit, among other things, fraud, misrepresentation, abuse, or any other violation of the airline’s applicable rules, including but not limited to the conditions of carriage, which specifically prohibit creating bookings to hold or block seats for the purpose of obtaining a seat that may not otherwise be available.

The rules are clear, the letter added. The airline may exercise its right to terminate a passenger’s program membership and confiscate his miles. Unless he accepts a settlement.

You will compensate [the airline] for the aforementioned fictitious bookings in the amount of $14,000 and refrain from making fraudulent bookings going forward.

We value your business and years of loyalty. […] Our offer will remain open until close of business (5PM CST) Friday, November 15, 2013.

Yikes. Now what?

Our passenger searched for past cases and turned up the one I linked to a few paragraphs earlier. He contact me to see if there had been any other cases, and whether they settled. Also, could he donate some miles to charity as penance for his crimes instead of paying the airline?

This is a letter E to represent Elliott Advocacy (Elliott.org), a nonprofit consumer advocacy organization.
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“Your suggestions are greatly appreciated,” he told me.

Well, as you can imagine, my first question was: didja do it, and if so, was this your first time?

“Yes,” said the passenger. “They have identified the only times that these speculative booking occurred.” The fake reservations were for clients who they believed would join him on a trip and then changed their mind. But, he assures me, he wasn’t trying to game the system.

So should he take the offer or fight?

I’ve reviewed this passenger’s bookings, and if what he says is true, then the airline’s actions seem a little extreme. The airline alleges it lost about $5,000 more than it’s asking for, but that’s really difficult to believe. More likely, it was a missed revenue opportunity, and a highly theoretical one at that. It wouldn’t surprise me to learn that all the flights on which these questionable reservations took place were flying completely full.

And I wonder: why not warn this customer before sending a demand letter like this? If his business is so “valuable” then why wait until you have a several bookings and then come after him, demanding a big check?

These are not the actions of a company that appreciates your business.

Some of you will also probably ask, “Well, if you can make a booking like this, and there’s no law against it, then why shouldn’t you try?” That would be a valid question, and I think the fact that any airline has to create complex rules to “protect” its revenues says a lot more about its iffy business model than it does about the inadvertent actions of one customer.

Personally, I would walk away from my elite status and the millions of miles and take my business to an airline that truly cares, as opposed to one that just says it cares. But I also feel to some extent that this passenger is being ambushed by his carrier, and could use a hand.

And yes, I know that I promised not to mediate any more missing miles cases, but the miles haven’t been taken away from him yet, and I’m just asking.

What should this passenger do?

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