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A 52-year-old travel agent has been indicted by the FBI for fraud relating to Delta's SkyBonus system. It is thought that he defrauded the airline on $ 1.75 million between March 2014 and April 2015.
Two 52-year-old US and Ukrainian citizens were charged with 12 counts of wire fraud by the FBI. According to reports in the New York Times, the charges against Gennady Podolsky relate to a 13-month project in which he conspired to fraudulently acquire points via the SkyBonus points system of Delta Air Lines.
The details of the case against Mr Podolsky reveal how he used his position as a travel agent at Vega International Travel Services to raise $ 1.75 million in SkyBonus points.
According to the Washington Post, Mr. Podolsky allegedly created a fake SkyBonus account. He opened the account of a fertility treatment company owned by a family member of the president of Vega International Travel Services.
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Using his position at Vega International Travel Services, he then fraudulently linked customer flights to the SkyBonus account, portraying them as employees. He fraudulently obtained more than 42 million SkyBonus points, which were exchanged for free air travel and various valuable benefits.
Mr. Podolsky was brought before a magistrate in the North District of Georgia, where Delta Air Lines is based.
Make the most of loyalty points
Gennady Podolsky's lawyer, Seth D. Kirschenbaum, responded to the accusations by saying: "Sir, Podolsky's conduct with regard to this program was not fraudulent".
In fact, his legal team claims the opposite. They say that rather than losing millions of dollars as a result of Mr. Podolsky's actions, Delta Air Lines "has generated millions of dollars in profits" on the customers he brought to the airline.
It remains to be seen whether Mr Podolsky has really benefited the airline in this way, but various tips and tactics are often used to make the most of frequent flyer points.
Understanding the systems used by airlines to determine loyalty points has become a bit of an art.
The points differ according to the type of seat booked, the duration of the trip and the frequency of the flights made by the passengers. There are also various time-dependent promotions available for spending points.
All this means that passengers can "cheat" the system in different ways.
How Delta Air Lines Lost
Using tips to get the most out of frequent flyer points is not generally considered a problem by airlines.
When individuals take advantage of these offers, the amount of money lost is negligible. In fact, it can be a good engine for customer engagement and brand loyalty.
In the example of Gennady Podolsky, the FBI does not see its actions as a simple case where a person takes advantage of loopholes.
In a press release from the North District Attorney's Office of Georgia, Special Agent Chris Hacker said:
"The fraudulent accumulation of frequent flyer miles in the travel industry may seem like a victimless crime, but big business risks losing significant profits."
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