Marriott Platinum status was for sale in China for $20. I wrote about how United’s status match system was being scammed. MileagePlus stopped verifying that credentials were real. They stopped verifying that the people getting the status were real.

People were using faked credentials to match to United GOld instantly on the way to the airport in China to get free checked bags on Air China. This is why United now requires a flight to activate matched status. China is where an inordinate amount of ‘loyalty fraud’ happens.

The optimal amount of fraud isn’t zero. The things you’d have to do to eliminate all fraud would make a programs unusable. But some fraud is obvious, and the clear result of poorly-designed systems.

Hyatt’s China joint venture was selling phantom stays so that guests could earn Globalist status, confirm upgrades to suites, get free breakfsat and guarantee late checkout. Hyatt blamed the customers and nuked their accounts. Now Chinese courts have gotten involved.

• Hyatt has a joint venture in China with its UrCove brand, partnering with BTG Homeinns.
  
• Several UrCove properties apparently turned status into a product line to sell on their own – packages of elite night credis and points sold through Chinese social channels, no actual stay required.
  
• Hyatt responded by wiping out the accounts of members who took part in this – at scale.
  
• Now the dispute appears to be moving to the Chinese courts.

Some UrCove hotels marketed “challenge” or “extension” bundles — 20–25 nights toward Globalist — for under $1,000. Properties posted the nights and points through Hyatt’s China integration, sometimes back‑dating activity. Members received official‑looking invoices and saw credits post to World of Hyatt.

UrCove stay crediting in China has long relied on manual posting via a Hyatt liaison team, not tight CRS↔PMS reconciliation. That path is slower—and easily abusable, it seems.

By late 2024, Chinese media and forums were full of accounts of “空刷” (phantom posting). Hyatt audits flagged anomalies (a hotel selling more room nights than they have rooms). Then came mass account closures—thousands, including Globalist members and a few Lifetime Globalists, apparently.

Consumers in China have begun suing the sellers of these packages.

• They say the hotel never created actual reservations, instead directly injecting points/nights into Hyatt via tools—only for Hyatt to later say the stays were invalid and close the member accounts. That’s not the kind of fraud they thought they were buying!

• And in any case, it seems to be more of a Hyatt internal issue with its Chinese partner than a member issue – they’re punishing the wrong party.

• Plus, if status‑qualifying activity can be posted without a reservation in Hyatt’s systems, the outcome here seems inevitable. That’s a system design problem.

Here’s the thing. Hyatt hotels, and Hyatt’s joint venture partner, appear to have literally been the ones making the sales offer. They’re primarily responsible for the fraud. It seems like zeroing out the invalid credits and clawing back awards where possible would have been a better first start with member accounts – while pursuing the properties and partners who monetized the scheme. That would have avoided collateral damage. It appears some members who legitimately stayed at the implicated properties may have been victims.

“Close everyone and let God sort it out” is operationally expedient but brand destructive. There’s also a message here to avoid Hyatts in China, and avoid this brand in particular.