About a month ago The Milelion broke the story about mileage brokers and how they were providing easy ways to buy Krisflyer miles, while potentially controlling multiple fraudulent accounts at the same time. What this meansย for legitimate Krisflyer members isย less award space and potentially having to shell out higher amounts for standard awards.
Using a dummy account withย the name Niole Lim, I successfully managed to get 2 transactions of 1,000 miles each past Krisflyer’s verification process.ย After I had finished the article on Aug 11, I turned myself in to Krisflyer membership services, telling them about the research I’d been doing and the implications for their program.
One day later, Aug 12, I got this reply from Krisflyer
Dear Ms Lim
We are writing in follow-up to our earliest response to you.
Firstly, we would like to thank you again for highlighting the matter to us.
We would appreciate it if you could provide us more information on the online mileage brokerage site. This will aid us in our investigation and take the matter up to the mileage broker to cease their activities which have contravened the Terms and Conditions of KrisFlyer membership programme.
May we also request you to provide us with the American Express credit card account used in performing these transactions? Please also advise us if the mileage broker effected the transaction into your American Express credit card first, which was later transferred into the KrisFlyer membership account or was it directly transferred from the mileage brokerโs American Express credit card?
We note that you were able to perform two separate transactions into the KrisFlyer account 8XXXXXXXย under your name, Niole Lim. In this instance, it was not possible for us to flag out the transactions as no discrepancies were detected.
As for KrisFlyer members, who are found to have contravened our programme guidelines, their accounts will be placed on audit and no further transactions can be made through the account.
Any flight tickets redeemed through the same account will also be suspended from use. Singapore Airlines will not honour the KrisFlyer awards, be it flights or upgrades, or any other benefits which have been redeemed with mileage that have contravened our programme rules.
We look forward to your response on the above for us to further look into the matter.
Ms Lim, thank you for writing to us.
Ok, I thought. So I assume they’ll investigate this and act accordingly. So I provided them with a full account of my activities with the mileage brokers, together with a link to the article I’d written. Then I sat back and waited for them to confiscate the miles and deactivate my account.
And waited.
And waited.
Aug 24 came and there was still no reply from Krisflyer. It had been 13 days since I outright told them I had defrauded their system, and Niole Lim’s account was still alive and well.
Determined to be punished for my indiscretions, I wrote to them again on Aug 24 asking them whether they had any updates. ย And got a response 10 days later.
Dear Miss Lim
Thank you for your email of 25 August 2016. The purchase of miles from online mileage brokers has been raised to the relevant departments for follow up. Singapore Airlines takes a serious view of any breach of the terms and conditions under the KrisFlyer programme, and reserves the right to suspend or terminate such accounts.
You have confirmed that all KrisFlyer miles in your account 8XXXXXXXXX (2,000 KrisFlyer miles) were purchased from online mileage brokers. In view that this contravenes the KrisFlyer programme rules, we regret to inform you that your KrisFlyer account has been suspended pending audit checks and the miles will be forfeited.
Miss Lim, thank you once again for your feedback.
Regards
KrisFlyer Membership Services
Ok, so that is and it isn’t an answer. They’re taking away the miles and closing the account, which is fair enough. I knew that US$50 or so I spent on this was going to be a writeoff. But they’re not addressing the underlying problem. What about their security measures? What about the multiple fraudulent Krisflyer accounts the mileage brokers control?
And it gets better. Despite what they said, ย as of today, 7th September, I can still log into Niole’s account and transact as per normal!
I mean, if I’ve been so brazen about this and no action has been taken, can you imagine if someone were trying to do this on the quiet?
Mileage brokers are not a problem that is unique to SQ. Their claim to be able to transact in pretty much any major airline currency impliesย that this is a problem that affects the industry as a whole. But airlines owe it to their members to take active steps to protect the integrity of their programs.
Anyone knows what I can do with 2,000 miles?
cover photo by jez
How did these mileage brokers get hold of the miles in the first place?
credit card rewards programs based in the US mainly. they allow you to add “authorized users” and you can transfer points to them without running into the name mismatch issue
I’ve seen you can buy miles from TaoBao as well
Go get Tiger Balm (pack of 4) from KrisShop. Hahaha
i was tempted to do that, but wondered if that would cross a line into actually defrauding KF and might lead them to hunt down my actual account…
For someone who enjoys the perks of miles, why are you going out of the way to spoil a good thing for others?
you hit the nail on the head my friend. I do enjoy the perks of miles, but I believe there is a proper way of going about doing so. Imagine you’ve taken the time and effort to plan your spending carefully to earn your miles, you’ve scrimped and saved and now you finally have a good amount to take your family on that dream trip. Then imagine that you come up against people who have acquired large amounts through illicit means who are effectively pricing you out of the market (or out of saver space at least). I don’t know… Read more »
The way I see it – airlines set aside a quota for award redemption based on what they set out in their T&C. Perhaps a zero sum game? Abuse of the system may lead to taking away a privilege from someone else who rightfully could have been given an award seat. ie, they are ruining the system for everyone else. There are legit ways to broker miles. Nothing to stop me from paying someone $x to redeem a ticket for me as a nominee. Since a mile redeemed is a mile earned by someone else, what difference is there if… Read more »
There are legit ways to broker miles. Nothing to stop me from paying someone $x to redeem a ticket for me as a nominee. Since a mile redeemed is a mile earned by someone else, what difference is there if a broker does this on behalf of 2 willing parties (notwithstanding a third party is now profiteering from the transaction which is not the intention of how FF work) This scenario you described is different from what we’re dealing here. Suppose I want to redeem a ticket, so I am put in touch with John who agrees to do it… Read more »
so I am trying to figure if it is a differing view, or an alternate view. You’re looking at impact, which i don’t disagree. That said, if it is fraud, that is what it is regardless of impact. I haven’t read the t&c in detail so I don’t know if by selling miles to a colleague and then redeeming an award on his behalf violates anything ( a thin line perhaps). Maybe it would be more accurate to say there are legit ways to transact (rather than broker which is by definition probably incorrect in the scenario). If the discussion… Read more »
Hey man you actually use your own money to help them investigate a case. They should reward you not penalize you. Like how Apple or Facebook rewards people who find and report bugs not terminate and close their account.
Perhaps you should not waste your time or $$$ on people who do not appreciate your time and effort to report s genuine concern
Good investigative work! I am impressed – please keep up the curiosity!
did you make some of this stuff up? some of your sources are not checking out. I just tried to sell some of my points to these folks and got different information. can you help me sell my points??
specific examples of “my sources not checking out” would be helpful.
This is really incredible work. I have a perspective on this too (not sure if it’s alternative…) KF Miles are a currency; albeit where the exact value is not transparent. SQ “mints” this currency by selling these miles to companies/banks to distribute. SQ therefore always knows how much “credit” it needs to honour. However, I’m also sure that the viability of its business model depends on a significant amount of miles being wasted by recipients. The brokers essentially prevent wastage by trading the resource – supply and demand. I think this is quite dangerous in the long run. Why? Because… Read more »
Good post and thanks for the sharing. From sq reply, I am doubtful they will look into this issue. I felt that they do not benefit from coming up with new processes or software to spot people who buy from brokers. To sq, coming up with compliance check, needs more manpower and more IT software. All these lead to more cost. If many miles customers decide to boycott sq mileage flight, they will still have sufficient miles customers to book flights and lesser call up by customers on waitlist issues. To them, not doing anything is profit. Hence, I felt… Read more »
thanks! like I told mark, i’m pretty sure nothing will happen. I knew the money I’d invest in this exercise was a write off anyway, but at least it made for an interesting read!
Interesting article as always Aaron! Love the humour and I’m pretty surprised it took KrisFlyer that long to even act on it (if any at all).
thanks mark- haha still radio silence from them. I think they won’t do anything lah and there’s really no point pursuing this alr. Still it was fun trolling.