Recently a number of readers have informed me of account shut downs with Alaska Airlines (AS), I thought it was time to have a look at what is causing these shut downs and what you can do to prevent them. There are three main issues:
- Flexible point transfers to Alaska Airlines
- Multiple applications for Bank of America credit cards
- Cancelling before paying the annual fee
Transfers To Alaska Airlines
You can transfer SPG and Diners Club points to Alaska Airlines. It seems that Alaska Airlines is currently trying to crack down on point re-sellers who are transferring these flexible points into Alaska Airlines to book flights. As long as you’re transferring into your own account (and it’s not a brand new account) then you shouldn’t have any issues with account shut downs.
If you transfer into somebody else’s account, or a brand new account then you risk shut down. Additionally if you book a ticket with miles and then your account is shut down, Alaska Airlines will request you pay the full revenue price to keep the ticket otherwise it will also be cancelled. This shouldn’t really come as a surprise as it’s clearly spelled out in the terms & conditions (emphasis mine):
Alaska Airlines Mileage Plan Miles, award tickets, upgrade certificates, and companion certificates may not be sold, purchased or bartered except as permitted on Points.com. Travel agents, travel arrangers and unauthorized brokers are not permitted to issue Mileage Plan tickets or to process or facilitate any other Mileage Plan transactions (including Mileage Plan account creation, account inquiries, and mileage or award ticket transfers) on behalf of others. If Alaska Airlines becomes aware that a member or a third party has misrepresented his/her identity in order to perform a Mileage Plan transaction, Alaska Airlines may, in its sole discretion, void the transaction. Miles or award tickets issued, transferred or obtained in violation of these Conditions of Membership are voidable, in Alaska Airlines’ sole discretion. The member and/or the traveler shall be liable for the full, unrestricted value of awards issued as a result of improper or fraudulent transfers or otherwise in violation of these Conditions of Membership. Alaska Airlines shall not be responsible for any inconvenience, damage or loss incurred by the member or the traveler if travel is interrupted or an award ticket is invalidated due to violation of these Conditions of Membership. Alaska Airlines reserves the right to deactivate the Mileage Plan account and/or remove the Miles from the account of any member who violates these terms until liability is fulfilled, and all other rights under applicable law to enforce these Conditions of Membership.
My recommendation: Don’t transfer to unless you’re also flying on the flight/they have the same last name as you.
Multiple Applications For Bank of America Cards
Bank of America combines multiple applications for credit cards on the same day into one hard pull. Recently a lot of bloggers have been posting success stories of applying for the same card in the same day (e.g Frequent Miler on Virgin Atlantic & Million Mile Secrets with AS). There are some reports of shut downs for this behavior, I don’t think it’s as bad as some people are making out but there is definitely some risk of an audit and possible shut down.
My recommendation: Don’t apply for multiple Bank of America Alaska Airlines credit cards on the same day. Keep in mind Bank of America has lots of different cards, so if you want to get multiple applications combined just apply for a few different cards.
Cancelling Before Paying The Annual Fee
Some people have been applying for cards, receiving the miles and then cancelling without paying the annual fee. It looks like both Bank of America & Alaska Airlines are willing to shut down accounts because of this.
Data points: 1
My recommendation: Avoid yourself some trouble and just pay the $75 annual fee, it’s a small price to pay.
Before your account is shut down, it’ll usually be temporarily frozen while an audit on your account is done. Being audited does not mean your account will 100% be shut down, it depends on what they find in your account. You will know that your account is under audit if you see the following message when logging into your AS account (hat tip to D93 on DDF):
The Mileage Plan account has some discrepancies. Contact Customer Care for assistance at 1-800-654-5669, Monday-Friday, between 8:00 a.m. and 5:45 p.m. (PT)
If you successfully pass the audit, you’ll receive the following e-mail/warning (hat tip to Theodore on DDF):
Thank you again for your patience. Your Mileage Plan has been re-opened and
you currently have full access to your account. I would like to reiterate one
final time that this is a PERSONAL rewards program, and as such, you may use
your miles to book travel only for yourself, family members or non-family only
if you are traveling with them. Miles/tickets may not be
sold/traded/brokered/etc. Additionally, as your Signature Cards are still so
new it is worth noting that if award tickets are booked and it is discovered
that your annual fee(s) have not been paid, you will be billed for the full
purchase value of those tickets. If that bill is not paid within 30 days, it
will go to collections.
Thank you again and enjoy the rest of your week.
This hobby is an ultra marathon, not a 100m sprint. It’s not worth jeopardizing your standing with a useful airline and credit card issuer for a few quick points. Slow and steady wins this race, there is no real need to make multiple applications for the same card on the same day – it’s not something a “normal” consumer would do and it’s certainly not remotely profitable for the card issuer.
It seems that the bigger issues at the moment are currently not paying the annual fee and being suspected of selling miles. For me the most interesting part of all this is that it seems to be instigated by Alaska Airlines, this is understandable for the selling miles part (they want their loyalty customers to have access to award seats and by not allowing reselling there are more miles left unredeemed) but less so for multiple applications and the annual fee.
Usually credit card issuers pay for all of the miles upfront and the airline co branded partner also receives a bonus per new account sign up, so you would think that Alaska would be happy with all of these new cardholders. To me this makes it seem that Alaska airlines have an unusual partnership with Bank of America which is more likely to be a profit sharing arrangement rather than BofA pre-purchasing miles and lots of them. You can read more about this possibility here.
A lot of information for this post has come from the following sources, if you’re interested in this issue I’d recommend reading these in full: