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American Airlines is sued for seizing cardholders' frequent flier miles

Published 01/29/2024, 04:07 PM
Updated 01/29/2024, 04:16 PM
© Reuters. FILE PHOTO: A jet from American Eagle, a regional branch of American Airlines (AA), taxis past other AA aircraft at Ronald Reagan Washington National Airport in Arlington, Virginia, U.S. December 3, 2021.  REUTERS/Chris Helgren/File Photo

By Jonathan Stempel

(Reuters) - American Airlines (NASDAQ:AAL) was sued on Monday in a proposed class action by two customers who said the carrier stripped them of 1.1 million frequent flier miles after they doubled up on credit cards offering mileage bonuses.

Ari and Shanna Nachison said American wrongly accused them of fraud for opening multiple AAdvantage accounts, with cards issued under co-branding arrangements with Citibank and Barclays.

The Los Gatos, California residents said that while some card applications prevented multiple mileage bonuses within a 48-month period, theirs did not, and it remained unclear why American closed their accounts in early 2020.

Both said the Fort Worth, Texas-based carrier cited violations "related to the accrual of ineligible miles and benefits; through fraud, misrepresentation and/or abuse of the AAdvantage Program" in emails announcing the terminations.

Ari Nachison said he lost 564,463 miles, while Shanna Nachison said she lost 550,664 miles.

The Nachisons said they were excused from applicable statutes of limitations because American's "boilerplate" emails did not mention specific violations or credit cards at issue, delaying them from pursuing legal remedies.

American did not immediately respond to requests for comment. Lawyers for the plaintiffs did not immediately respond to similar requests.

The lawsuit filed in the San Jose, California federal court seeks damages for people whose AAdvantage accounts were terminated based on alleged fraud for obtaining Citi-AAdvantage and Barclays-AAdvantage credit cards.

Some airlines including American have in recent years raised spending and mileage requirements for frequent fliers, who use their status to obtain tickets, better seats, early boarding and other perks.

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Earlier this month, American said some flying benefits would be restricted to AAdvantage members, including free same-day standby to switch to earlier U.S. flights.

The case is Nachison et al v American Airlines Inc, U.S. District Court, Northern District of California, No. 24-00530.

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