Help me get 400,000 Chase Ultimate Rewards points back

Like many people during the pandemic, Chase Sapphire Reserve cardholder Dana Flota hit some difficult times. As the global crisis dragged on for months and then years, her financial situation turned dire. After missing too many credit card payments, Chase closed her Sapphire Reserve card and she instantly lost 400,000 Ultimate Rewards points.

Flota says she had been saving those 400,000 Chase Ultimate Rewards points for years. She intended to spend them on her honeymoon – the one she hopes to take after her finances recover.

But now all her points are gone and Flota is devastated. She claims a Chase customer service representative promised her that she could keep her Ultimate Rewards points if she agreed to a payment plan. However, Flota says that after she agreed, Chase reneged on its promise and pressed the delete button on her points.

With nowhere else to turn, Flota sent her plea for help to TPG. She hoped we could recover her lost points – and her honeymoon dreams.

But is there anything to do when a consumer loses their rewards points due to defaulting on their credit card? That’s the question for today.

Medical problems and a lost job during the pandemic

Midway through the pandemic, Flota says she experienced some medical problems. As a result, she had to work less than usual. Initially, she was able to keep up with her minimum payments on her Chase Sapphire Reserve.

“I was doing my best, but it began to get harder to keep up with the payments,” Flota told me. “I started to send partial payments to Chase.”

Soon, Chase representatives started calling Flota, asking why their previously nonproblematic customer had begun sending irregular payments.

Flota says she explained her situation during each call with Chase. Each month she hoped that things would improve by the following statement’s due date.

Unfortunately, as time went on, instead of improving, her finances sunk to a new low when she lost her job. After skipping a payment entirely, a Chase representative informed her that if she didn’t make an immediate payment of $3,000, her account would be closed permanently.

“I didn’t have $3,000! I panicked because I knew I was in jeopardy of losing the nearly 400,000 Ultimate Rewards points I had saved in my Chase account for 10 years. Those were for my future honeymoon. I hoped things would improve. I didn’t want to default on my Reserve card. I’ve always been an excellent customer.”

When Flota couldn’t make the immediate $3,000 payment on her Reserve card, Chase brought down the hammer and froze her account.

Flota could still see her Ultimate Rewards points. But she wasn’t able to move them or redeem them.

Soon, though, those 400,000 Ultimate Rewards points, which TPG currently values at $8,000, would be gone.

Flota agreed to a “settlement” plan from Chase without getting any details in writing or full clarity of what that debt relief program entailed. That decision will likely affect her credit rating for years to come.

Settling a credit card debt means that the company has agreed to accept less than the full amount that you owe and will close your account. That might seem like a great deal, especially if you’re in financial distress. However, this generates negative information on your credit report that will stay there for up to seven years. It is not something a consumer should agree to without carefully considering the long-term consequences. A settlement plan should always be a last resort for a consumer struggling with credit card debt.

“I was relieved because the lady told me that if I agreed to the settlement plan, Chase would release my 400,000 Ultimate Rewards points. I would just need to spend them or transfer them within 30 days. This was to save my dream of a future honeymoon.”

The Chase agent explained that the call was being recorded and the agreement would immediately be activated. She read Flota a long list of terms of the settlement plan, which included a reduction in her overall balance and a significantly reduced monthly payment.

Flota was disappointed that her situation had spiraled to where she could not pay off her account in full. Before the pandemic, she had always been a responsible credit card holder.

But one small bright spot in the miserable situation was that Chase had allowed her to retain the 400,000 Ultimate Rewards points.

At least, that’s what she thought the agreement was. Chase was about to give her terrible news about those Ultimate Rewards points.

If your Chase account is delinquent, you can lose your Ultimate Rewards points

Flota thought the agreement allowed her to transfer all her Ultimate Rewards points to her linked frequent flyer and hotel loyalty accounts as soon as she made her first payment in this new settlement plan. A few weeks after the phone call from Chase that placed her into the credit card payoff program, Flota made her first payment.

Now, it was time to transfer her giant pile of Ultimate Rewards points to United MileagePlus. Except she couldn’t. Now they weren’t just frozen; her points had been deleted.

“My Ultimate Rewards points were gone! I felt sick, and I started to have an asthma attack. I called Chase, and this representative told me that when you fail to make payments on your credit card, you forfeit your Ultimate Rewards points. He didn’t care what I had been told.”

After hanging up with this Chase representative, Flota realized her precarious position. She had received almost nothing in writing, and she hadn’t recorded the call, although Chase had. Customer service representatives from the bank, meanwhile, were standing firm that she wasn’t entitled to those Ultimate Rewards points.

Flota would never have agreed to the settlement plan under these terms. She says she would have found some way to avoid the loss of her 400,000 Ultimate Rewards points.

But she was sure of what the Chase representative had promised her on a recorded line. So when she continued to receive negative responses to her request to return her Ultimate Rewards points, she came to TPG for help.

But then we hit a stumbling block. In my last column, I told you about Daniel Cordova, who had a $6,000 problem with American Express and American Airlines. When I began to mediate his case, he explained that he had no real documentation to help things along. That was a problem and one that almost caused him to lose thousands of dollars.

Flota similarly had no documentation that supported her position. She had banked all her dreams of retaining her 400,000 Ultimate Rewards points for her future honeymoon on a phone call. Now she hoped I could ask Chase to pull the phone records so we could listen and prove her case.

As a consumer advocate, I often receive messages from troubled travelers who advise me that all the evidence that supports their complaint is contained in the company’s recorded call. These consumers are under the false impression that they have a right to those recordings. The reality is that when a company says it’s recording your call, it does it for its benefit, not yours.

Unfortunately, there are no laws or regulations that will force a company to release its call center recordings to you. Unless you obtain a subpoena or the company willingly hands over the recordings, you’ll be out of luck. You should always repeat back to the representative what you understand from the conversation and ask for a follow-up email that will confirm what has been discussed.

Flota believed that Chase had sent her an official hard copy summary of what she had agreed to and what the agent had promised her. But she told me that it had likely gone to her grandparents’ home and they didn’t recall receiving it.

Even though she had no supporting documentation, she seemed very sure that the phone call recording would prove her case. And since, through my years of experience as a consumer advocate, I know Chase to be a customer-friendly company that is willing to correct customers’ problems, I decided to send her case over to our executive contact at the bank. (This is not a customer-facing contact. I have access to this person as a consumer advocate and media member.)

What to do before you default on your credit card

To avoid your own personal points armageddon if your financial well-being takes a hit, it’s crucial to be proactive while attempting to get your finances in check. Here are steps to avoid defaulting on your credit card accounts and risking the loss of your hard-earned rewards points.

Talk to your credit card company

If possible, before you start missing payments, open a discussion with your credit card issuer. During the pandemic, many companies became a bit more flexible and forgiving of their customers’ struggles to keep up with payments. That is, as long as the customer communicated the problem.

Don’t wait, as Flota did, for your credit card company to call asking you what’s gone wrong. Simply skipping payments, especially for premium cards like the Chase Sapphire Reserve, is an almost-guaranteed way to get your account closed and forfeit your loyalty points. Always alert the company of any changes in your finances and your plans to address the problem.

Ask for a lower interest rate

Your credit card’s minimum monthly payments will fluctuate based on your balance and the interest rate attached to your account. If you’re carrying a high balance, you may be able to receive some financial relief by securing a lower interest rate. Ask your credit card issuer about this possibility. Just make sure to do it before you start missing payments altogether. And if possible, attempt to make at least the minimum payment noted so that your account remains in decent standing.

Consolidate your balances

If you’ve found yourself struggling to keep up with the payments on multiple credit cards, consolidating all your balances on a card with a low or 0% interest rate could be the answer to your problem. Many credit card companies offer 0% interest rates on balance transfers for a set period of time (typically 12-18 months) when you have a new card. If that’s a possibility for you, this might be a great option to choose.

However, there are a few things to keep in mind about consolidating your credit cards:

• There will typically be a transfer fee based on the overall balance moved to the new card.
• If the cardholder still has a balance at the end of the low-interest or interest-free period, regular (sometimes quite high) interest rates will start accruing.
• You’ll have a harder time qualifying for a new card or balance transfer if you’ve already begun to miss payments on your existing credit cards.

Consider a personal bank loan

If you’re juggling a variety of high-interest credit cards and lowering your interest rates or consolidating isn’t a possibility, a personal loan that lets you pay off your balances and then pay back the loan at a lower interest rate may be an option. Of course, if you wait too long to go down this route and your finances are already dire, you probably won’t be able to secure a personal loan. So make sure to preemptively explore this option.

Another reason not to wait? Consumers with the best credit receive the lowest interest rates on personal loans. So the longer you delay consolidating your debt with a bank loan, the higher your interest rate will rise.

Accept settlement agreements with caution

Before accepting any payoff settlements like the one Chase offered Flota, make certain you completely understand the agreement. There will likely be long-term repercussions. Your credit score could take a significant hit, and you may be precluded from becoming a customer of that bank again for a set period of time (typically years), even after your finances recover.

Get the agreement in writing so that you can review it before you accept the terms. Do not agree to such a drastic solution with long-term consequences until you have complete clarity on what it is exactly that you are signing up for.

Always keep a paper trail

Consumers who contact TPG and me for help resolving issues with airlines, hotels and credit card issuers often do not have the documentation to support their complaints.

They claim that the companies involved aren’t transparent about how to reach someone in writing, and indeed it can be hard to reach a real human being to try to resolve an issue. As a result, they’re left with nothing but recollections of phone calls. This often greatly reduces the consumer’s chances of successfully resolving their problem on their own.

In an effort to empower consumers to resolve their own problems, my consumer advocacy organization, Consumer Rescue, provides a free executive customer service finder. You tell us the company you’re battling, and we can give you a name and email address of a person there that we know to be helpful. You’ll still need to provide whatever documentation you have and prepare yourself for disappointment if you haven’t done your due diligence. But talking to a real, live (and helpful!) person is better than going around in circles with faceless customer service agents.

If you are struggling with a credit card company, airline, cruise line, hotel, car rental agency or vacation rental company, send a short summary of your plight to tips@thepointsguy.com. I will be happy to investigate and help you, too.