Tag Archives: nytimes

NYTimes Article About MoneyPak and Fraud

The NYTimes posted an article about MoneyPak, discussing a lot of the ways that it’s used for fraud. A typical example is fraudsters getting victims to load money onto MoneyPaks at CVS or Walgreens and then sending the reload codes to them where they then disappear with the money. It’s also discussed as a way for criminals to move funds through the financial system in a way that’s hard for authorities to trace (i.e. money laundering). While most miles/points schemes haven’t focused on MoneyPaks specifically, we’re all familiar with Vanilla Reloads, which operate very similarly and are also mentioned in the article.

Articles like this are helpful to better understand the ecosystem in which manufactured spending operates. While we were all saddened by the demise of buying VRs with credit cards at CVS, it makes more sense if you consider the high risk of fraud that CVS was taking on, even if you gave them your ID (you can still dispute the charge as a consumer with your credit card company, even if it’s your fault for falling for a scam).

In general, people doing manufactured spend have nothing to worry about, since there’s nothing illegal about the practice. Assuming you’re not involved in other criminal activity, you’re not doing anything to integrate bad funds into the financial system or intentionally layer money. But you should be aware that most people don’t really understand what we do and have a right to be suspicious given the potential for fraud on all of these prepaid devices. So don’t raise a fuss if people want to record your ID or if they want more information from you, since you’re not doing anything wrong, and failing to provide that information can just make you look more suspicious.

The Real Reasons Why Joyce Wadler is Misinformed about Frequent Flyer Miles

While I know that this article is supposed to be humorous, I found the NYTimes article “How Many Miles Do I Need to Murder the Head of the Airline?” by Joyce Wadler to be more misguided than anything else. So many people feel like their miles are worthless–or worse, don’t even collect their miles–because they’re misinformed.

Misconception #1: “I never use my frequent-flier miles for anything but upgrades.”

Reality: Upgrades are rarely the best use of frequent flyer miles, either because of inordinately high cash co-pays or high minimum fare requirements. Wadler encounters the latter when the phone agent tells her that she needs to purchase a minimum booking class of M (a nearly a full-fare economy ticket) to upgrade to business class using miles. M class fares can often be more expensive than purchasing a discounted business class ticket outright, and on some airlines, even buying the higher fare doesn’t necessarily guarantee the availability for an upgrade.

Misconception #2: “I would be able to take a night flight and lie kind of flatProbably not what the airlines are calling bed flat, available only on a limited number of flights, piloted by the tooth fairy.”

Reality: Numerous airlines offer lie-flat business class offerings across the Atlantic, largely to stay competitive. In Star Alliance alone, Air Canada, Austrian Airlines, Brussels Airlines, LOT, Lufthansa, Swiss, Turkish, United, and US Airways (i.e. pretty much all Star Alliance carriers who fly across the Atlantic) all offer a lie-flat business class offering on at least some of their routes. The quality of other factors like service and catering varies across these carriers, and the prevalence of lie-flat seats varies amongst carriers (e.g. Lufthansa doesn’t have lie-flat business on most of their fleet), but lie-flat seats are largely becoming the norm in trans-oceanic business class.

Misconception #3: “But at least I must have enough miles for an economy seat? I do indeed, the rep says cheerfully, 50,000 miles gets you a round-trip ticket tourist seat to Europe. But none are available. They can be purchased 365 days in advance, and customers buy them 10 or 11 months ahead.”

Reality: 1) I don’t know of any US carrier that charges 50,000 roundtrip for economy to Europe in August. I believe all US carriers charge 60k roundtrip, although American and US Airways have off-peak awards which can be had for 40k or 35k respectively.

2) You shouldn’t rely on a phone agent to tell you about award availability, as they’re not incentivized to find you seats. You should know which flights have availability prior to calling and just feed those flights to the phone agent. (Don’t know how to find award availability? Consider employing an award-booking service.)

3) Award availability can often be good 365 days in advance (or more commonly, 331 days in advances), but this isn’t a hard and fast rule. While Cathay Pacific seems to always open up 2 First class seats from SFO to HKG right when their schedules are loaded, Lufthansa won’t release any First class award availability to their partners until 15 days prior to departure. In general, you needn’t plan a 11 months in advance for a trip, although it doesn’t hurt.

(Bonus from the comments) Misconception #4: “There are on-line companies (google is your friend) which buy miles and then sell you a business or first class seat which they have booked with the miles. We are flying to Europe this fall on just such an arrangement–booked 5 months out–for just over half the price of the same ticket had we bought directly from the airline.”

Reality: This is a very bad idea. Buying and selling miles like this is against the terms of service of the frequent flyer programs, which means you’re liable to have your tickets cancelled if the airline finds out if you’ve bought one of these tickets, or you’re liable to lose all of your miles if you’re selling them to brokers.

It’s sad because I know so many people who feel the same way about their frequent flyer miles, but they can be oh-so-wonderful if you know how to use them correctly.