BILL REQ. #:  H-3806.2 

Read first time 01/16/08.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to allowing consumers to participate in the secondary market for points, miles, or other similar credits earned in frequent flier programs; and adding a new chapter to Title 19 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that:
     (1) In recent years, frequent flier programs have become a popular marketing tool used not only to attract airline customers and generate customer loyalty, but also to generate significant revenue for airlines;
     (2) As frequent flier programs have grown in popularity, a secondary market for points, miles, or other similar credits earned by participating in frequent flier programs has also grown;
     (3) This secondary market for points, miles, or other similar credits is independent from original frequent flier loyalty programs and is not related to airline rates, routes, and services;
     (4) Airlines have contributed to the growth of this secondary market by creating a business out of selling points, miles, or other similar credits to outside companies, such as credit card companies, that in turn use the points, miles, or other similar credits to attract their own customers;
     (5) As the secondary market for points, miles, or other similar credits has grown, however, airlines have increasingly attempted to unreasonably restrict, restrain, limit, or control the secondary market by prohibiting frequent flier program members from also participating in the secondary market;
     (6) When unreasonable restrictions, restraints, limitations, or controls are placed on the secondary market for points, miles, or other similar credits, consumers in the state of Washington who participate in frequent flier programs are harmed; and
     (7) Regulation of the secondary market for points, miles, or other similar credits earned through participation in frequent flier programs is necessary to ensure that consumers in the state of Washington can freely participate in the secondary market.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Frequent flier program" means a program in which a consumer receives points, miles, or other similar credits in exchange for travel on a certain airline.
     (2) "Secondary market" means the market in which the sale, barter, or exchange of points, miles, or other similar credits occurs between an airline and someone other than a frequent flier program member or between a frequent flier program member and someone other than the airline sponsoring the frequent flier program.

NEW SECTION.  Sec. 3   It is unlawful for an airline that participates in the secondary market to interfere, restrict, restrain, limit, or control the right of consumers in the state of Washington to also participate in the secondary market.

NEW SECTION.  Sec. 4   The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW. A violation of this chapter is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act, chapter 19.86 RCW.

NEW SECTION.  Sec. 5   Sections 1 through 4 of this act constitute a new chapter in Title 19 RCW.