Alaska Airlines freezes out Aussie frequent flyers in credit card fraud crackdown

Alaska Airlines has frozen out Australian customers from bulk-buying frequent flyer miles to redeem for free flights with partner airlines Qantas, Emirates and Cathay Pacific, citing "an attempt to reduce fraudulent transactions" made with international credit cards.

Changes suddenly introduced last week by the Seattle-based airline now limit purchases in its Mileage Plan scheme to members with a North American credit card and billing address, locking out Mileage Plan members in the rest of the world.

Like many of its US siblings, Alaska Airlines allows travellers to buy frequent flyer miles to boost their account and trade for free flights or upgrades.

However, many Australian members of Mileage Plan have suddenly found themselves unable to buy miles to use on future domestic US trips with Alaska Airlines as well as partner airlines.

"In an attempt to reduce fraudulent transactions, we are limiting purchases to credits cards issued in North America (Canada, United States and Mexico) only" explained Komal Ram, Alaska Airlines' Director of Loyalty Programs and Partners during an email interview with Australian Business Traveller.

"We had to make the changes fairly quickly to mitigate the increased number of fraudulent transactions we were seeing by international credit cards."

Credit card fraud stings frequent flyers

The root of the problem, Ram said, is people buying miles with stolen credit cards.

Most of the purloined plastic comes from Asia "but as a business policy and from our system-setup perspective we couldn't just prohibit transactions originating from specific countries where we see most of the fraud from (Asia)" Ram said.

"Until we have the infrastructure to reduce the overall fraud-related issues, we've limited the cards to those issued in North America."

Ram added that international cards represent the smallest fraction of Alaska Airlines' MileagePlan purchases, telling Australian Business Traveller that "only .05% of our transactions were issued on international cards last year, since we're a North American airline without any international flights beyond Canada and Mexico."

Why savvy travellers bulk-buy miles

Bulk-buying miles – especially from US airlines during 'bonus miles' promotions – is a favourite trick of frequent flyers, as it's often cheaper to buy and subsequently redeem those miles for travel than actually paying the regular airfare.

In just the past month alone we've seen special deals with American Airlines and United Airlines which can snare a miles-based award ticket at savings between 50-70% against regular ticket prices.

In the case of Alaska Airlines' Mileage Plan, its current 40% bonus promotion translates to flying Qantas business class from Sydney to New York for roughly $1,310 spent on frequent flyer miles, compared to the full ticketed price of $7,800.

Mileage Plan also allows free stopovers on one-way bookings, so when combined with the airline’s extensive partner network its miles are amongst the most valuable on offer.

Ram told Australian Business Traveller that Alaska Airlines understands that its crackdown may have caught out legitimate customers.

"We're assessing these changes very carefully and if we can find another way to limit fraud while allowing international transactions, we'll quickly make necessary changes to do so."

Additional reporting by David Flynn

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Chris C.

Chris is a a former contributor to Executive Traveller.