Has Air Canada Aeroplan Lost Its Mind?

It’s no secret in the miles and points world that the Air Canada Aeroplan program has been struggling with fraud and abuse. The situation is so bad that it’s speculated that many of their partners have cut them off from being able to book tickets (this has happened on and off over the past couple of months, with varying partner blocking). Part of this is due to loopholes in how the program was constructed (particularly with family sharing), but part of this is also due to automated points broker activity. This is a very deep rabbit hole which involves some fairly deep IT security conversations. Most of this unauthorized activity could be dealt with via technology updates (potentially using some of Air Canada’s own in-house technology, such as its New Distribution Capability API), but instead, Air Canada has chosen to make its Terms and Conditions some of the most unusual and restrictive in the industry.

Only One Aeroplan Credit Card Allowed Per Person, Period

Airlines make money with their loyalty programs by selling points to banks. The points are awarded to bank customers as signup bonuses for new credit card products, and for continued spending on the card. Given that the signup bonuses usually cost the banks more than the annual fee, banks impose restrictions on whether and how often you can receive multiple signup bonuses. However, it’s not unusual for an airline to partner with more than one bank (it’s common for airlines to work with different card issuers in multiple countries), or for a bank to offer both business and personal cards.

That’s now out the window with Aeroplan. Have a personal credit card tied to your Aeroplan account? You’d better not open an Aeroplan credit card for your small business, or your entire account could be shut down and all of your points confiscated. Are you Canadian temporarily working in the US on, say, a TN-1 visa, and want a credit card denominated in USD? Forget signing up for the Chase Aeroplan card, unless you want your Aeroplan account torched. And if you do have an Aeroplan card, you’d better use it enough not to be considered “disengaging” (whatever that means). I mean, don’t take it from me, it’s right there in the Terms and Conditions:

Aeroplan may, in its sole discretion, choose to limit the number of New Card Bonuses or similar bonuses or incentives a Member may receive in any period, and, in addition to the other remedies set forth in these Terms and Conditions, reserves the right to suspend, revoke or terminate the Account of any person who engages in a behaviour of excessive use, abuse or misuse of the New Card Bonus offers. Such behaviours include but are not limited to: (i) applying for, transferring or switching (including upgrading or downgrading), or completing any other product changes between multiple Aeroplan Credit Cards across one or more product types, or across one or more financial institutions that issue an Aeroplan Credit Card; (ii) a pattern of cancelling, or disengaging in, an Aeroplan Credit Card shortly after receiving a New Card Bonus (or any portion of a New Card Bonus) or similar bonus or incentive; (iii) a pattern of purchasing and then cancelling or returning any product or service for which Aeroplan Points were issued; and (iv) linking your Aeroplan Credit Card to an Account that is not your own Account.


One Lifetime Credit Card Signup Bonus, Ever

You can only get a signup bonus for an Aeroplan credit card once in your lifetime, from a single credit card. Banks often set rules like this (American Express only allows one signup bonus per lifetime, per card product) but I have never seen an airline set such a requirement. This is absolutely unprecedented.

From time to time, bonus or incentive Aeroplan Points may be offered by us or participating partners and suppliers to acquire products or services (“Products and Services”) as part of the Aeroplan Program. In connection with bonus or incentive Aeroplan Points being offered as an incentive related to Products and Services, such bonus Aeroplan Points incentives are intended for a Member who has not previously received bonus Aeroplan Points for the same Products or Services, to acquire such Products or Services.

Only One Account, With Exact Passport Name Match

On the surface, it’d seem reasonable for Aeroplan to require that people have only one account per person, and that the name match their identification. In practice, this is a real problem because people’s names can change on their identification. People get married and change their last name. The US State Department decided with my last passport renewal to change my middle initial on my passport to my full middle name, in line with their new policy. Transgender individuals routinely change their legal names to the opposite gender. The list goes on.

If your Aeroplan account doesn’t match your legal name, you could lose all of your points!

Making matters worse, Aeroplan has absolutely terrible integration with banks. If the name on an Aeroplan account doesn’t exactly match the name on the credit card, points transfers won’t work. If you use a nickname, the name used in banking may not be the same name that is on your passport. If you want points transfers to actually work, you will need to create an Aeroplan account in a way that violates the Terms and Conditions from the outset.

All of this might be possible to manage around if Aeroplan customer service was accessible, but it often isn’t. At all. After wading through a multi layered phone menu, the phone system often plays a brush-off phone recording that effectively says that Air Canada is too busy for you, and then their phone system hangs up on you. If you do reach an agent (after waiting for hours), making updates requires sending one way emails to a back office somewhere that may get to you in a month or three. There is no feedback loop, and forget booking anything in the meantime. Your points will just sit locked up in the program, rapidly devaluing instead. Canadian companies in general are not known for good customer service, but Air Canada is considered terrible even for Canada.

Death Or Bankruptcy Zeroes Out Your Points

It’s not unusual for airline programs to zero out your points balance if you die. That’s why you should have detailed information accessible for your loved ones to use your points, and you should never tell an airline that a loyalty program member died. Aeroplan kicks it up a notch though. You’re dead to them if you declare bankruptcy. They’ll close your account and zero out your points balance. I have never seen anything like this in any airline program. This isn’t just a clawback of loyalty points earned through a partner bank you defaulted on. Purchased points or points earned from flying will be cancelled too.

Bottom Line

Rather than fixing the technology issues that are largely the root cause of Aeroplan’s fraud problems, or investing in providing literally any customer service at all, Aeroplan has instead rolled out the most restrictive Terms and Conditions that I have ever seen in any airline program. Look, I understand that Air Canada has been struggling with fraud and abuse in its Aeroplan program. And some of the Terms and Conditions updates are entirely reasonable (such as those to Aeroplan Family Sharing, which seem carefully thought out to limit abuse while maintaining a popular program feature). I have to wonder what Air Canada is possibly hoping to accomplish by limiting engagement with its financial partners, though. This is traditionally the biggest source of revenue to airline loyalty programs, so it seems like Air Canada is cutting off its nose to spite its face.