Broken Capital One MFA Locking Up Points

I just got a frantic text from a friend today. “Capital One won’t let me transfer my points because I switched mobile phone carriers! I’m going to lose the award inventory, and they’re telling me that there’s nothing they can do. My points are locked up for an indeterminate period of time.”

Your Capital One points may end up in a weird AI-generated jail if you switch mobile phone companies

This is the first time I have heard of this problem, but indeed it’s true. Capital One has been notoriously fussy about its 2FA verification. They use a “data quality” service (such as the Phone Verification tool provided by Experian) to check whether a mobile phone number appears to be suspicious, and they can get back a lot of data from these services (mobile phone carriers and app providers can and do sell everything about you to data brokers, including carrier billing data and your approximate real-time physical location).

And that comes down to assumptions, and who is making them. To me, this has missing cultural context written all over it. Capital One has fired much of its US staff and moved a significant percentage of software development offshore. Incidentally, if you’re looking for a software job in machine learning, try looking in Bangalore. A carrier-authenticated mobile phone number totally makes sense for identity verification in a location like India, where everyone has a national ID card called an “Aadhaar” and real-name registration is required with mobile carriers using this national ID (I’m sure this capability is never abused).

This is not the case in the United States, where we don’t have a national ID, real name registration is not required for any form of telephone service, and data quality is inconsistent at best. First of all, the lines are blurred between mobile phones, VoIP services and land lines here: you can port to and from any of these and some services ring multiple devices on multiple networks at the same time. People don’t always register their phones with the carrier at all, or if they do, at the location where they live, or update the billing address when they move (most people get their bills online and pay automatically). When switching carriers, it can be weeks or even months before carrier data is updated, and billing data can be verified from the new carrier. So when you’re designing a system like this, and you have cultural context of how things operate in the US, you will understand that a mobile phone number isn’t authoritative and there should be other ways to verify a customer request.

Capital One, unfortunately, isn’t doing that. There is a whole Flyertalk thread of people complaining about this issue. If Capital One’s system can’t figure out how to send you a text message, you’re out of luck and you can’t transfer points. They’re in jail, customer service is a brick wall, and there are no alternate procedures. Nobody will help you and Capital One won’t even say where the failure is so you can try to get it corrected. That’s another hallmark of customer service in both American and mainland Chinese banking: if your situation doesn’t fit the script, nobody knows what to do and nobody will help you. Your job as a human is to figure out how to fit within the system as it’s (poorly) designed, and bend to the will of a computer.

My friend ended up completely stuck, and used some American Airlines points he forgot he had to book a different flight. For my part, I find it completely astonishing that Capital One has designed such a completely inflexible system for something as time-sensitive as points transfers. I totally get that SIM swapping is an issue, and that stolen credentials are a problem. There are, however, other entirely reasonable alternate verification methods that aren’t immediately obvious to someone in Bangalore. If any product managers are left in the US at Capital One, maybe they can help their offshore colleagues.

What Are Miles And Points Really Worth? (2023)

Nearly every airline program I work with at AwardCat has massively devalued. And yet, I keep seeing the same optimistic points valuations on every blog. In my view, valuations are mostly a lie. While it might be theoretically possible to achieve the valuations noted, it’s clear that for the majority of redemptions, points aren’t worth anywhere close to what is ordinarily claimed.

Working with a shadowy group of Pacific Northwest miles and points enthusiasts, I have created a points valuation chart using an entirely new methodology. The truth is, the value of points varies per redemption and a lot of the value is theoretical (tickets to Amsterdam are generally undesirable in February, even if they’re still expensive in paid business class relative to redeeming with points).

This chart focuses on flights, not hotels. There is one exception: I did factor in the value of Hyatt transfers from Chase, because these really can deliver outsize value. Other hotel programs usually aren’t good value in exchange for transferable points.

cheap motel
You can usually get better value when booking independent hotels versus transferring bank points to a hotel program

Along the same lines, some options for redeeming your points are really good value, and others are not. So, we tried to calculate a weighted average based on a mix of awards redeemed within the program (as most users do; it’s rare that anyone uses their points only for the most aspirational of journeys). We also defined ceilings: Realistic Ceiling and Aspirational Ceiling, which reflect the highest value that can realistically be attained by most people, and the highest value that would typically be attained for an aspirational trip.

In particular, given the “ceiling” valuations, there are both objective and subjective influences and there’s probably room for folks to argue. For example, Aeromexico offers a tantalizing round-the-world award chart that should, in theory, offer far greater value than the 1.2 cent aspirational ceiling I have assigned. There are only two problems: partner availability is virtually nonexistent to Aeromexico on Korean Air, Delta, KLM and Air France in business class, and virtually all SkyTeam carriers levy fuel surcharges (along with Aeromexico itself). A round-the-world trip in economy class (with hefty fuel surcharges paid on every leg) looks a lot less aspirational, doesn’t it?

Conversely, Alaska Airlines crowns the aspirational ceiling (despite recent devaluations) because of their relatively low first class pricing, and because stopovers are permitted, achievable, and allowed on a one way trip. It’s harder than it used to be to take advantage of this, but stopovers really add outsize value. Air Canada similarly offers stopovers for 5,000 points each, although their comparatively high redemption rates lower their aspirational ceiling.

Airline/ProgramFloorWeighted AverageRealistic CeilingAspirational Ceiling
Aeromexico0.60.81.01.2
Air Canada0.81.31.92.9
Alaska0.81.32.14.2
American1.21.42.24.0
Amex0.71.11.42.9
Avios0.71.11.82.2
Bilt1.51.62.24.0
Brex0.60.81.01.7
Capital One1.01.31.72.9
Cathay Pacific0.81.21.92.4
Chase1.01.31.44.0
Citi1.01.31.72.9
Delta1.01.21.72
Emirates0.60.91.11.4
Etihad0.60.91.11.2
Flying Blue0.81.11.61.8
jetBlue1.21.21.31.3
LifeMiles0.71.21.82.7
Qantas0.51.01.23.9
Singapore0.81.01.31.7
Southwest Airlines1.21.31.41.4
Turkish1.11.52.42.4
United1.01.21.82.2
Virgin0.81.01.42.2
Average across all
programs
0.91.21.62.48
The above chart reflects my personal opinion of what airline and transferable points are worth, and is not the expressed opinion of AwardCat or any other party.

One of the biggest surprises to all of us was the low “floor value” of most points. This is because airlines and banks offer a lot of really unoptimal ways to spend points, from paying for WiFi charges to buying gift cards or statement credits towards credit card purchases. I ignored some of the worst and least optimal ways to redeem points and focused on flight related redemptions (either flights or enhancements to the onboard experience). Southwest and jetBlue win here, because it’s hard to spend your points for less than 1.2 cents each. While Turkish comes in just behind, this is primarily because there just aren’t very many ways (yet) to spend your points unoptimally in this program. And Brex (which, full disclosure, fired AwardCat as a customer so I do hold a grudge) takes the crown for least valuable transferable points. I’m very happy to have transferred my points out before they suddenly devalued their points with zero prior notice. That’s the risk you take with bank points, as I warned in 2016.

While again highly subjective, I think the weighted average is where most people are likely to redeem their points. This is surprisingly low. Some programs, such as Emirates and Etihad, have so hugely devalued their programs that their points average less than one cent apiece in redemption value. Singapore maintains a relatively low weighted average because of their high redemption rates for economy class flights, and their levying of fuel surcharges on partner flights. And the weighted average of bank points is about 30% more than their floor value because of the optionality for points transfers that they provide. I will point out that Chase’s own valuation of Ultimate Rewards points, when redeemed through their portal for travel, would seemingly (net of the likely profit gained by running their own travel agency) agree with ours.

Wrap-Up

I think that most sources online offer an overly rosy picture of the value miles and points can have. Now, I won’t say it’s because most of them financially benefit from you remaining invested in these programs, or that credit card links can pay hundreds of dollars in commissions. So, maybe they just haven’t updated their assigned valuations to account for the massive inflation in award costs? Or maybe they believe that when airlines and hotel chains assign a possible range of award costs, lower pricing will prevail more often than higher pricing (also, if you believe that, I have a bridge to sell you)? Maybe they just really value the optionality of transferable points, to the extent that this optionality is worth considerably more than the points of transfer partners? Whatever reasons they have for their charts, here is mine. This is what I think points are really worth, for most people, most of the time, under most circumstances.

Do you agree? Vehemently disagree? Leave your comments below!

The Weird World Of Wyndham

I don’t prefer to stay in chain hotels, and they often don’t exist anyway in the off-the-beaten-path places where I prefer to travel. However, I go to a conference every year in Las Vegas where I run an event. Now, Las Vegas is probably my least favorite destination in the world, and I’d probably never visit otherwise if not for this particular conference. Naturally it happens in the summer, also happens to be during a peak travel week (for some reason), and this makes both flights and hotels really expensive.

Once you have seen the lights of Las Vegas once, you don’t ever need to go back

This year, I somehow managed to get a cheap flight (Southwest ran a good sale after their massive meltdown, so I burned some of my Rapid Rewards points) and the next challenge was finding a reasonably priced hotel. Las Vegas has gotten incredibly expensive as of late. Everything costs extra. You’ll typically pay $30 per day (or more) in resort fees, and on top of this, there’s $15 or so in parking charges. And that’s on top of the rate, which is often $150 or more. A cup of coffee costs $7 (not a fancy barista beverage, just plain coffee). The days of cheap deals in Las Vegas are over.

While I typically use miles and points for flights, there are occasional good values with hotels. The most well-known program is Hyatt, but there was just a brutal devaluation earlier this month, which is a follow-on to the gut punch of a devaluation last year. In Las Vegas, this means you can now book a room at a Hyatt Place for 15,000 points (worth an eye-popping $187.50 worth of Chase points) per night. Plus parking. I’m sorry, Hyatt, but I haven’t stayed at a Hyatt Place anywhere in the world that is even close to worth that.

I checked with a friend who works at a Strip hotel. He offered me his friends and family rate of $249 per night, plus resort fee. Thanks but no thanks. Grasping at straws, I looked at IHG who wanted close to $300 per night worth of points (at current sale prices) for a room at a Holiday Inn Express. And then, bearing in mind my terrible experience at the La Quinta last year (I consider it one of the worst hotels in Las Vegas–check the reviews), I decided to see what Wyndham had to offer.

Transferring Points To Wyndham

Most people don’t know this, but you can transfer both Citi ThankYou and Capital One points to Wyndham. The program offers two different redemption options: “Go Fast” which offers a discounted room rate plus a small number of points (either 1,500, 3,000 or 6,000), and “Go Free” which offers a completely free room paid entirely with points. Most properties cost 15,000 points per night, including such renowned brands as Travelodge and Days Inn. Some top tier (for Wyndham) properties cost 30,000 points. You can also book Vacasa vacation rental properties at 15,000 points per bedroom per night, which can be a pretty good deal in expensive resort destinations. Now, you’re reading Seat 31B, and you can probably guess that $187.50 worth of points (and up) isn’t what I typically spend on a hotel night. There are, however, a handful of properties that cost only 7,500 points per night, and this is where you might occasionally strike gold in the Wyndham program.

In Las Vegas, Wyndham owns a resort called the Desert Rose. It has a two night minimum stay, and is really well rated. Even though the property is actually a resort, they don’t charge for parking or have a resort fee. What’s more, for some reason, this property costs only 7,500 points per night for a “Go Free” stay. But it gets even more interesting than that. Their “Go Fast” rate is actually variable during the week, while paid stays don’t vary much (you’ll pay about $150 per night during the week, and $185 per night on the weekends). “Go Fast” stays from Sunday through Thursday were averaging out at 1,500 points plus less than $70 a night!

Splitting Up Stays

One tactic I’ll sometimes use is paying for some nights, and using points for another. In this case, on a one week stay, the best deal was to use the “Go Fast” rate for Monday through Thursday nights (spending an additional 6,000 points for a completely free room would yield less than $70 in savings, or about 1.1 cents per point). I then booked the “Go Free” rate for Friday through Sunday nights (where I’d have had to spend much more out of pocket, yielding over 2 cents per point in value overall). This meant making two different reservations and technically I will have to check in and out mid-stay. However, hotel front desks are used to dealing with this sort of thing (which can happen for various reasons) and can usually put two reservations together so you don’t have to change rooms.

Wyndham Is Weird

Look, Wyndham Rewards is a pretty strange program, which I suppose suits a hotel chain as strange as Wyndham. They have a pretty big footprint, but their properties are mostly a random hodgepodge of truck stop motels and the occasional timeshare resort. Quality is all over the place, with very little consistency even within brands, and few people would ever consider a Days Inn to be aspirational, which is why I think there is very little written about Wyndham Rewards. Pricing is also all over the place in the program. It’s usually not very good, but occasionally, it’s incredibly good.

I still prefer not to stay in chain hotels, but I like spending money even less (at least when I could spend points at good value). It’s hard to find good independent properties in a place like Las Vegas anyway, and I was happy to get some incredible value for this stay. With no resort fees, no parking fees, and an all-in effective room rate of under $100 per night at a non-casino resort property in a good location, I think this deal has earned the Seat 31B seal of approval.