Velocity accounts being suspended due to suspect points transfers

Members of Virgin Australia’s Velocity Frequent Flyer program are being caught in the net as Velocity sweeps its database to uncover points being transferred to people other than a member's immediate family.

Australian Business Traveller has learned of over two dozen frequent flyers whose accounts have been suspended and their points balance frozen across the past week, pending further investigation by Velocity.

Letters sent by email to the affected members state that Velocity "has detected unusual activity in relation to the Account … we believe that the activity may amount to a breach of the Velocity Frequent Flyer Terms and Conditions (Membership Terms) and have suspended the Account while the matter is investigated in accordance with section 8.1 of the Membership Terms."

When contacted by Australian Business Traveller, most members with suspended accounts admitted to having made or received a transfer of frequent flyer points with somebody other than an ‘eligible family member’ as defined by Velocity – although in two cases members claimed those transfers took place between two and three years ago.

Points for sale

In several instances money as well as points has changed hands, with some members selling excess points and others buying points to apply for an award seat or upgrade.

Velocity and Qantas frequent flyer points are often offered for sale through trading websites such as Gumtree and OzBargain.

While Velocity allows up to 400,000 frequent flyer points to be transferred between family members each year, the program strictly defines ‘eligible family members’ as

• husband/wife/domestic partner/de facto
• parent/child
• brother/sister
• grandparent/grandchild
• son/daughter-in-law, brother/sister-in-law, father/mother-in-law
• uncle/aunt, nephew/niece, first cousin
• "or any foster, step or adopted relationship in any of these categories"

Velocity also provides for ‘family pooling’ through which frequent flyer points and status credits earned by up to five family members living at the same address can be funnelled into the account of a sixth family member.

It’s understood that both family transfers and family pooling mechanisms have been used by suspended members.

No sudden crackdown, says Velocity

A spokesperson for Velocity Frequent Flyer asserted that there has been no sudden crackdown on questionable points transfers, but rather that the company was continuing its diligence in monitoring points transfers “to ensure compliance with the terms and conditions.” 

The sweep appears to target not only Velocity members who have transferred points outside their ‘family’ but also the recipients of those points, and in turn others to whom that second person may have sent or received points.

However, in what appears to be a domino effect, the accounts of people related to suspended members are in some instances also being suspended – ranging from in-laws to children – even if those accounts have never recorded a transaction.

Several holders of suspended accounts are now being asked to provide a statutory declaration affirming their relationship with people to whom they have sent or received points.

According to the federal government’s Attorney-General’s Department “If you intentionally make a false statement in a statutory declaration you can be charged with a criminal offence which carries the possibility of up to four years imprisonment.”

Australian Business Traveller understands that Velocity is now assessing the activity of each account on a per-case basis, and continuing to join the dots between members exchanging points beyond the scope of their ‘family’, before contacting suspended members to advise if their account will be re-opened, or be closed and all points forfeited.

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David Flynn

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.