American Airlines Tells Court: Members Who Sign Up For A Friend’s Offer Risk Account Closure
Several customers are suing American Airlines after their AAdvantage accounts were shut down. They used invitations to apply for Citibank credit cards that circumvented rules limiting how often one could get a new card bonus. People lost millions of miles.
Some people created fake accounts to get these mailers that allowed them to apply for cards over and over – at scale. Others even purchased these card invitation mailers. Yet some customers just used application invites sent a child or spouse.
- When you’d open a new AAdvantage account, you’d receive an offer to apply for a Citibank credit card. That invitation didn’t prevent you from earning a bonus if you’d earned one in the past. After all, it was being sent to someone with a brand new account.
- These invitations were transferable. Some people may have opened an account for a child taking a trip, and used the invitation themselves. That’s pretty innocuous. But I don’t know of anyone whose account was shutdown for doing this just once.
- Most cases seem to be people who either opened fake AAdvantage accounts (think: in the name of fake people or pets) or who purchased invitations on Reddit or FlyerTalk for $5 – $50 each.
- People getting 4 or more initial bonuses from Citibank personal cards in two years (when the normal limit is currently one per 48 months) seemed to get shut down).
According to an American Airlines DOT filing in response to complaints, American learned about the tactic for getting unlimited card bonuses by monitoring FlyerTalk and Reddit. They ascribe the lack of a bonus restriction on the application people were using as “due to a technical issue” that “certain unscrupulous individuals” used “to circumvent security protocols.” In other words, Citi programmed their systems poorly.
American argued falsely that the existence of a 48 month rule on most applications means that it really should apply to all applications, even though application rules have changed regularly over time.
They also argued that bonuses are only for “first-time account holders” which is obviously untrue when they simultaneously argued that bonuses should be read as only available every 48 months, even when an application neither says so nor enforces this rule.
In filing a motion to dismiss, American Airlines makes two claims that are probably correct. However I’m more interested in their side comments about the case itself.
- The plaintiffs are suing under California law, but most aren’t California residents. The court lacks general jurisdiction over American Airlines (incorporated in Delaware and headquartered in Texas) and the alleged activity generally didn’t take place in California.
- The Airline Deregulation Act pre-empts the claim. Northwest v. Ginsberg says that frequent flyer programs are part and parcel of airline pricing, since even if miles aren’t earned for flying they’re generally redeemable for discounted or free travel or upgrades, so state-level claims are precluded by the Airline Deregulation Act.
In its filing, American Airlines says that using a promotion sent to someone else is, in itself, fraudulent. If your spouse receives an offer by e-mail, and it’s clickable by anyone, and anyone can register, you’re taking an action that justifies having your account shut down.
Plaintiffs committed fraud and abuse, which fully justified American terminating their membership in the AAdvantage program, per that program’s terms and principles of contract law. But even under their version of events, it is clear that Plaintiffs are suing to restore frequent flyer miles that they obtained through gamesmanship—namely, promotional offers directed to other people
Normally you might think that going to a website and registering would tell you if you’re eligible – especially if you’re 100% transparent about who you are! American, though, says not so! If the offer was “sent to friends and family members” (if you did not receive it yourself) then you’re a bad actor.
Plaintiffs applied for these “credit card accounts under [their] own name and social security number” and claim they “did not engage in fraud when applying for and opening” these credit card accounts. (Id. ¶¶ 52, 59, 67, 85, 103, 111, 130, 138, 153, 171, 187, 194, 209.) They concede, however, that they used promotional offers that were sent to friends and family members—i.e., that were not sent to them—in opening these accounts, without which they would not have received miles for opening multiple accounts
That’s a pretty bizarre take. The registration or application process is what’s supposed to determine whether you’re eligible. Sometimes emails get sent to spam or otherwise not read. The marketer’s dream is for a customer to share the offer they’re getting and encourage their friends to take advantage of it, while the business has the opportunity to screen customers at the point of registration.
Yet American told the court that if a member signs up for an offer sent to a friend or family member, they may shut down the account.
