Today I received a couple of Tweets from people asking why I haven’t covered reports of a significant number of American AAdvantage accounts being shut down.
This has been going on for a couple of weeks now, though interestingly I haven’t received any messages or comments about this until today, so I think it’s safe to say that OMAAT readers mostly play by the rules (because on other sites this seems like a huge topic of conversation).
Nonetheless I figured I’d share my understanding of what’s going on, along with my take.
In this post:
Airline Corporate Security Knows What They’re Doing
Airlines have corporate security departments that are responsible for a lot of functions, and among those is making sure that people participating in frequent flyer programs are playing by the rules.
Sometimes accounts get audited or even shut down, and that can happen for a variety of reasons. It does indeed appear that American is shutting down many AAdvantage accounts over questionable activity, so let me share my understanding of what has been going on.
What’s Causing American To Shut Down Accounts?
There are reports of American having in recent weeks contacted a not-insignificant number of AAdvantage members and informing them that their accounts are being shut down.
I have no clue how many “actual” people this impacts, but I do believe this involves tens of millions of AAdvantage miles, or possibly even more.
I’ll share my understanding of what has been going on. For background, as most of you probably know, credit card issuers have rules regarding who they’ll approve for cards, including only letting you get a bonus (or a card) every so often. The credit card companies have done the math on this, and they have reasons for these rules.
Apparently there are some techniques people have been using to circumvent these rules, which have caused this situation. Here’s my understanding, after someone just spoke to me about this on the condition of anonymity:
- Citi has been sending out emails and physical mailers to new AAdvantage members offering them a bonus on the Citi Platinum AAdvantage Card, and there has been no language regarding how often you can get the bonus
- The mailers have a unique code on them (the emails/mailers explicitly state that the offers are just for the intended recipient), and when you go to fill out the application, you can change any details on the application
- So people signed up their pets/kitchen blenders/basement rats/distant cousins for AAdvantage accounts, then they got the mailers, and then they used those codes to sign up for Citi cards for their actual AAdvantage account/in their own name, without the lifetime language
Essentially this has allowed people to get two Citi AAdvantage cards every 65 days. It’s my understanding that some people earned millions of miles using this method, as they could get two Citi cards every 65 days.
Of course it’s worth remembering that back in the day American let you get two Citi cards every 65 days anyway, but that was different since that was fully within the rules, and didn’t involve creating fake frequent flyer accounts, using mailer codes intended for others, etc.
For American corporate security, it has been quite easy for them to track down who has done this:
- They can find the households with literally dozens of AAdvantage members living in them
- They can see who has signed up for a Citi account using a mailer code not intended for them
- They can figure out who has managed to sign up for an average of one Citi account every 30 days or so
American has been closing the AAdvantage accounts for many of these members, and has even canceled tickets booked out of those accounts, even if people are halfway through their journey.
The Interesting Precedent This Sets
What is especially interesting here is that the “punishment” is coming from American rather than Citi. Obviously airlines and credit card companies work closely together with co-brand relationships, but generally if you violate a rule with a credit card issuer, they’ll close down all your cards.
In this case the punishment seems to be entirely on American’s side, though. That’s not unreasonable or wrong, though this isn’t something I ever recall something before, at least to this extent.
An Example Shutdown Email
Here’s an example of an email that American has sent to a member who had their AAdvantage account shut down (as shared by Doctor Of Credit):
“A recent investigation has determined your involvement in multiple violations of the General AAdvantage Program Conditions, related to the accrual of ineligible miles and benefits, through fraud, misrepresentation and/or abuse of the AAdvantage Program. Additionally, it was determined that there are multiple violations to the AA Conditions of Carrier regarding Exploitive Practices related to your issuance of ineligible AAdvantage awards. Per the AAdvantage program governing terms:
Fraud, misrepresentation, abuse or violation of applicable rules (including, but not limited to, American or American Eagle® conditions of carriage, tariffs and AAdvantage® program rules) is subject to administrative and/or legal action by appropriate governmental authorities and American Airlines. Such action may include, without limitation, the forfeiture of all award tickets and any accrued mileage in a member’s account, as well as termination of the account and the member’s future participation in the AAdvantage® program. If your account is terminated due to inappropriate conduct or while under investigation, you may not open a new AAdvantage® account or participate in the AAdvantage® Program in any capacity without obtaining the express written permission of American Airlines. In addition, American Airlines reserves the right to take appropriate legal action to recover damages, including its attorneys’ fees incurred in prosecuting any lawsuit.
From the conditions of carriage:
Your ticket is not valid when:
- We find that the ticket was bought using an exploitative practice
As such, we must now exercise our right to terminate AAdvantage account. All membership benefits associated with this account, including all remaining miles and issued award tickets, are forfeited, effective Dec 5, 2019. Award tickets obtained through fraud, misrepresentation, or violations of the AAdvantage Terms and Conditions and or Conditions of Carriage are not valid for travel. These tickets have been cancelled and you will need to make alternate arrangements for any upcoming travel plans.”
The Issue With All Of This
As I look into this I see reports of some people saying that their accounts have been shut down for “nothing.” Here’s the thing — over the years I’ve received a countless number of emails from people asking for advice regarding an account shutdown.
Without exception, every single time the person claims to be 100% innocent. If I engage with them, it typically becomes apparent pretty quickly that there’s more to the story.
Conversely, I honestly don’t understand why I don’t get more emails from people saying “I screwed up, what would you do?” because I feel like I could give better advice there.
My point is that yes, I believe American is shutting down quite a few AAdvantage accounts. I think for the most part they’re perfectly within their rights to do so. It seems like they’re shutting down accounts of people who have:
- Opened AAdvantage accounts for people who don’t exist
- Used codes not intended for the people listed on the mailers
- In many cases it seems people in turn sold or bartered the miles that they got this way
So that leads me to the question — has anyone had their AAdvantage account shut down who didn’t do any of the above?
American Corporate Security Likes When People Fess Up
I will say that I’ve repeatedly seen data points that American corporate security is more forgiving of people who admit what they’ve done, rather than deny that they’ve done this.
In the past I’ve seen data points of people who had their AAdvantage accounts shut down, but then they were given another chance when they admitted to what they did. Conversely, I’ve rarely seen positive data points from people who fully deny what they did. That’s in contrast to some other airlines.
At least that’s the case historically — American seems really angry about this situation, though, and I’m not sure that will save anyone here.
Bottom Line
As is the case with any “loophole” like this, there are people involved on all kinds of different levels. Some people may have only done this once at a friend’s suggestion, and some people may have signed up a spouse or family member this way, without them even knowing their account was being used in this way.
It seems like American is now cracking down on everyone, including closing AAdvantage accounts and canceling tickets issued with them.
Let me say this — I’ve been playing the points game since I was 14. I’ve no doubt got caught up in some things over the years, at least when I was younger. But over the years I’ve learned you’re always best off just playing by the rules. You might get away with stuff in the short term, but in the long term you’ll be “caught” more often than not. And that’s especially true when you scale something to this extent.
If nothing else, all of this is a good reminder of the risks if you do choose to not play by the rules.
So yeah, that’s my take on all of this.
Has anyone who didn’t do any of the above received an account shutdown notice, or anything? What do you make of this whole situation?
Yes, my wife just received a closing AAdvantage account email just for not recently using her account. American is demanding she either book a flight, purchase miles, purchase something from a partner or gift miles (for a fee, of course), or they will close her account. American has never done this before.
@Jake Mueller:
How has AA "defrauded Citi & Barclay"? Citi paid AA, got the miles onto its books, then issued the miles to customers. Some customers who AA decided for whatever reason it no longer wanted as customers had their miles removed by AA. This action is entirely between the customer and AA.
I'm sure Citi and AA are perfectly fine with how this whole situation has turned out. The only people who lose are...
@Jake Mueller:
How has AA "defrauded Citi & Barclay"? Citi paid AA, got the miles onto its books, then issued the miles to customers. Some customers who AA decided for whatever reason it no longer wanted as customers had their miles removed by AA. This action is entirely between the customer and AA.
I'm sure Citi and AA are perfectly fine with how this whole situation has turned out. The only people who lose are the folks who had their AAdvantage accounts terminated and miles revoked. However, it is pretty clear at this point most if not all of them have no legal standing to recoup anything from AA or Citi.
It's time to just move on..
I don't know how much AA pays you, but it has defrauded Citi & Barclays of tens of millions of dollars by considering forfeited miles as a decrease in liabilities in their 2019 Q4 financial report. Essentially, it's like minting free money - in part, leading to the juicy profits that they announced today.
Note that people can only get to know if their accounts have been locked if they redeem miles. Moreover, accounts can...
I don't know how much AA pays you, but it has defrauded Citi & Barclays of tens of millions of dollars by considering forfeited miles as a decrease in liabilities in their 2019 Q4 financial report. Essentially, it's like minting free money - in part, leading to the juicy profits that they announced today.
Note that people can only get to know if their accounts have been locked if they redeem miles. Moreover, accounts can be locked by AA at any point, even after a redemption.
There have been multiple reports that not only those who used mailers had their accounts locked/terminated. I'm one of those unlucky folks. Even with public offers, one could've gotten 6 SUBs every 2 years, so let's consider a very conservative estimate - 10k locked accounts with a mean of 300k miles, although many people had millions of miles. If Citi & Barclays had purchased miles at 0.5 cents per mile, then this amounts to $15 million.
Neither Citi, nor Barclays is running a charity, and should sue AA to reimburse them for the forfeited miles they had purchased
@sdsearch,
That is correct. Application in flight was for Barclays credit card for which bonus was in the form of Aadvantage miles. (only Barclay AA card ever applied)
First citi card was through web link some time back.
The other 2 were from citi mailers (they looked like greeting card size) which were addressed to me (my name spelled correctly - I still have those mailers with me with "unique" application code clearly printed...
@sdsearch,
That is correct. Application in flight was for Barclays credit card for which bonus was in the form of Aadvantage miles. (only Barclay AA card ever applied)
First citi card was through web link some time back.
The other 2 were from citi mailers (they looked like greeting card size) which were addressed to me (my name spelled correctly - I still have those mailers with me with "unique" application code clearly printed on it.)
Saved it because my concern was that in spite of Citi employee assuring that I will get bomus, I might not. Usually would have thrown away those mailers once I got bonus but never cleaned up that drawer.
There must be a way for AA to differentiate between "abusers" and technical violators.
Fraud seem pretty strong word for 4 cards (3 citi and 1 barclays) when each application was reviwed and approved by big internationa banks.
@paresh23, something does not sound quite right here: You wrote: "Did apply for credit card using offer sent DIRECTLY to me or handed to me by AA employee in flight. After 2nd card in a year, even checked with Citi"
Well, AA employees in flight can only hand out credit card applications for Barclay AA credit cards, not for Citi AA credit cards. So if you really got a Citi AA credit card application from...
@paresh23, something does not sound quite right here: You wrote: "Did apply for credit card using offer sent DIRECTLY to me or handed to me by AA employee in flight. After 2nd card in a year, even checked with Citi"
Well, AA employees in flight can only hand out credit card applications for Barclay AA credit cards, not for Citi AA credit cards. So if you really got a Citi AA credit card application from an AA employee in flight, that may the problem, who knows where they got that, because AA only allows Barclay credit applications to be given out in flight.
That's the breakup of Barclay-vs-Citi deal with AA. Barclay gets exclusive rights to promote its cards on AA airplanes (and I think maybe airports too?), while Citi gets exclusive rights to promote its cards elsewhere.
So the fact that say you got an application from an AA employee in flight yet never mention Barclay implies there may have a problem with that particular application, which AA may have deemed fraudulent. Now, that doesn't mean it's your fault, but that may be the cause.
Or perhaps you missed something in your writeup, and one of your cards was from Barclay, not from Citi. If that was the case, please clarify that, because that lowers the number of cards you had from Citi, I would think.
Meanwhile, you mentioned offers that were sent directly to you. Did they actually your name on the offer, or were they just offers that ended up at your address? There's a big difference between the two, but the phrase "sent directly to me" doesn' t make clear which it is. (Though you later do clarify that you didn't use mailers/offers addressed to anyone else.)
In my case, I got a Citi AA Plat credit card mailer a year or two ago addressed to someone who moved out of my home about 4 or 5 years earlier. (I keep getting mail, mostly sales stuff, addressed to them occasionally.) I didn't use it, but I did get it, and it was sent "directly to me" in that it was sent to my address and I'm the only one now at that address. But even though it was sent "directly to me", it wasn't addressed to me, and so if I had used it that would have been defrauding AA (not to mention possibly mail fraud for using mail addressed to someone else).
And then just the other day, I ended up getting an Citi AA Plat credit card offers address to "resident" at my address. However, that wasn't a true mailer, since all it had was a Citi web page, and no offer codes or anything lie that. But it does bring up yet another possible interpretation of "sent directly to me".
Ok. Here is the datapoint.
I did NOT open any real or fake accounts.
(or did anything that can be considered violation of AA rules)
Did apply for credit card using offer sent DIRECTLY to me or handed to me by AA employee in flight. Atter 2nd card in a year, even checked with Citi that I wil lstil lget bomus for the thiors card (was more worried about Citi not granting bonus 3...
Ok. Here is the datapoint.
I did NOT open any real or fake accounts.
(or did anything that can be considered violation of AA rules)
Did apply for credit card using offer sent DIRECTLY to me or handed to me by AA employee in flight. Atter 2nd card in a year, even checked with Citi that I wil lstil lget bomus for the thiors card (was more worried about Citi not granting bonus 3 months later - never thought of AA getting upset). Was told that as far as T&C of the application did not spell out any conditions, I wil get the bonus. Citi employee was right. I was given bonus for the third time in a year.
In addition I also got for my business (legit busines, 20+ year old).
Four bonus yielded about 265,000 miles. MIles earned from other activties were around 350,000. DId use 75000 on summer vacation. Balance getting accumulated (no time for vacations) over the years was over 2 million.
As it stands, AA has terminated 30+ years old account, with no warning (or even hint that something was not kosher).
Of course, I am upset and also know that I have absolutely no recourse.
Last time I felt like this was in 70s when I was mugged in central park in day time.
I dont believe I defaruded AA.
- did not create fake accounts
- did not use mailers/offers addressed to anyone else
- checked with Cit (with whom I was doing business, neveroccurred to check with AA)
Even if AA wanted to crack down on "abuse", they could have handled better.
Given that I did not do anything that is considered even loophole let alone anything shady, I feel mugged by AA.
There is no point in boycotting AA. I will suffer, not them. But natural human tendency to avoid AA as far as possible in future.
I have sent very polite request "to take a second look", by email and registered letter to whatever contacts I could gather
- AA corp - head of loyalty programme
- AA corp - office of chairman
- responded to termination email
Radio silence.
@iahphx, the question is WHY did they get all those mailers in their homes? If you had followed the thread on FlyerTalk about this back in the day, you'd have seen that tons and tons of people were coming by to find out how to get such mailers, and for personal card mailers the answer going around was "sign up your brother, your dog, your flowerpot for AA, and AA will start sending mailers to...
@iahphx, the question is WHY did they get all those mailers in their homes? If you had followed the thread on FlyerTalk about this back in the day, you'd have seen that tons and tons of people were coming by to find out how to get such mailers, and for personal card mailers the answer going around was "sign up your brother, your dog, your flowerpot for AA, and AA will start sending mailers to them". So just because these mailers started coming to their homes, it was the action that caused those mailers to come to their homes that AA objects to. Does it not make sense for AA to object to a dog and a flowerpot applying for an AA account (well, actually, of course, someone else applying for that AA account in their names)?
AFAIK, no one ever figured out any way to get business card mailers flowing "on demand" to someone's home, only personal card mailers. Some random people did get business mailers, but AFAIK no one ever figured out the pattern. And luckily, that kept many of those who were more concerned with getting/staying under Chase's 5/24 from ever considering this mailer route to AA miles. So for some, it may be that Chase's 5/24 saved their AA account!!!
Very interesting. Well, I guess you would not get many emails from dishonest people; why would I bring attention to my deviousness?
Again, those of us playing by the rules get the short end; we get to pay more for people who pay less, we don't get that award ticket for those who have miles they shouldn't and then folks want to blame AA.
It is interesting that the criminal mind will work...
Very interesting. Well, I guess you would not get many emails from dishonest people; why would I bring attention to my deviousness?
Again, those of us playing by the rules get the short end; we get to pay more for people who pay less, we don't get that award ticket for those who have miles they shouldn't and then folks want to blame AA.
It is interesting that the criminal mind will work any system and the rules were designed for those of us willing to abide by them. Unfortunately, the spoil sports ruin it and then play innocent well kudos to AA for having the courage to close down the account and stranded folks if they were in the middle of travel, regardless of the reason....
Haha, what a Christmas present!
This was informative. People get what they deserve eventually. I enjoyed your post until you used you used the corporate-speak platitude “data points” TWICE!... and then stopped reading to post this. DON’T!
If American would focus on actually taking you where you want to go within a few days of when you would like to be there in the seat you booked maybe they would be more effective. Worst airline in the world, I'm surprised anyone would even want their miles.
@iahpdx
"If AA is really shutting down the frequent flyer accounts of customers who used a couple of mailers sent to their homes, that’s wrong. Period."
Again, you may think it is morally or ethically wrong, but they are entirely within their right to terminate program membership for you or any AA frequent flyer for almost any reason they like.
@notanaaflyer -- Your analogy to a "police officer" is nuts. Citi and AA are not government agencies and you cannot commit a crime by honestly answering questions on a credit card application. This is a commercial dispute, not a law enforcement matter. While I have little sympathy here for those who ginned up fistfuls of credit cards -- especially those who bought mailer "codes" on the internet -- the reality is that the vast majority...
@notanaaflyer -- Your analogy to a "police officer" is nuts. Citi and AA are not government agencies and you cannot commit a crime by honestly answering questions on a credit card application. This is a commercial dispute, not a law enforcement matter. While I have little sympathy here for those who ginned up fistfuls of credit cards -- especially those who bought mailer "codes" on the internet -- the reality is that the vast majority of people did not do this. Citi send advertising mailers to their homes. Many, many mailers. Kind of like junk mail -- I think only Capitol One sends more mailers! They took these ads out of their own mailboxes and applied for the cards being offered. If a restaurant sends a coupon to my house addressed to my spouse and I use it, have I done anything "morally" wrong? Of course not. If the restaurant doesn't want me to use it, they could require me to show ID or something. Citi could easily have required the same thing. They didn't. They didn't seem to care -- for years! If AA is really shutting down the frequent flyer accounts of customers who used a couple of mailers sent to their homes, that's wrong. Period.
"In the real world, people apply for credit cards using offers they’re not specifically targeted for ALL THE TIME."
"offering them more credit cards did nothing wrong in using those mailers to apply for a couple of AA credit cards."
#1: Just because a rule was not enforced in the past does not mean it is entirely in the clear. If you speed past a police officer and he/she didn't pull you over doesn't...
"In the real world, people apply for credit cards using offers they’re not specifically targeted for ALL THE TIME."
"offering them more credit cards did nothing wrong in using those mailers to apply for a couple of AA credit cards."
#1: Just because a rule was not enforced in the past does not mean it is entirely in the clear. If you speed past a police officer and he/she didn't pull you over doesn't mean you have established a precedent to speed in the future.
#2: This is the most important part: loyalty programs like airline miles are only subject to their TOS, and the TOS has some very broad terms that basically allows the airlines to terminate your program participation for any reason which DOES NOT HAVE TO RELATE TO THE LEGAL DEFINITION OF FRAUD or any law. Basically you agree to participate entirely at the airlines mercy/discretion, and if they in their sole discretion decide you are doing something they don't like, they can fire you as a customer. This is not unique to AA.
There sure are a lot of holier-than-thou comments in this thread. In the real world, people apply for credit cards using offers they're not specifically targeted for ALL THE TIME. Frankly, you're a fool not to. EVERY TIME I get an offer for a credit card I think I might want, I look online to see if there's a BETTER OFFER. Often there is. I don't do exhaustive research to see if I'm "eligible" for...
There sure are a lot of holier-than-thou comments in this thread. In the real world, people apply for credit cards using offers they're not specifically targeted for ALL THE TIME. Frankly, you're a fool not to. EVERY TIME I get an offer for a credit card I think I might want, I look online to see if there's a BETTER OFFER. Often there is. I don't do exhaustive research to see if I'm "eligible" for that better offer. I just apply. If the bank says I'm not eligible (which is rare), I completely understand. But if I'm approved, and I do the things I'm supposed to do and earn the bonus miles, I assume they're mine. Not in my wildest dreams would I ever anticipate anyone (much less an airline) to later say I didn't earn those miles "fairly" and close my account. Honestly, that seems nuts.
I obviously can't defend folks who were buying mailers and applying for new AA cards every month or two, but it's also obvious that folks who kept receiving Citi mailers to their homes every couple of months offering them more credit cards did nothing wrong in using those mailers to apply for a couple of AA credit cards. The idea that their conduct was somehow awful because it was another family member's name on the mailer strikes me as, well, ridiculous. They applied for the credit cards under their own names with their own social security numbers. If they weren't eligible for this offer, Citi could have simply told them so. This happens every single day at every bank in America that issues credit cards. It is not the customer's responsibility to limit themselves to only the amount of credit some posters on a blog think they should be "entitled" to. It's the bank's responsibility. And once that credit is issued, and the award points are issued, it's hard for me to see how these customers now deserve to be treated like dirt.
Selling miles for profit is despised by the airline industry.
And a l0t of fraudsters kept selling miles in expensive classes, a big no no for the airline industry.
They have risk management deparments and can review the info, just like we check our banks accounts.
Miles are just numbers stored in computer systems ( like FIAT currency).
When they become tangible liabilities then companies act. And swiftly!
Class Action, sure make...
Selling miles for profit is despised by the airline industry.
And a l0t of fraudsters kept selling miles in expensive classes, a big no no for the airline industry.
They have risk management deparments and can review the info, just like we check our banks accounts.
Miles are just numbers stored in computer systems ( like FIAT currency).
When they become tangible liabilities then companies act. And swiftly!
Class Action, sure make some Scheisster lawyer his day, he will get some money, you will get a 20 dollar voucher, maybe. If you are not charged with mail or internet bank fraud.
Those days are over.
And to those who were left stranded in the middle of their vacation, be lucky you made it back.
Always keep a low profile and enjoy whatever perks you are enjoying. Gluttony always kills the pray.
I am not defending AA, but you guys were too much liability.
What so many objectors to AAdvantage security's actions seem to be missing right now is that AA miles are not yours. They belong to AA and may be reclaimed at any time. By AA fiat they have no value (arguable, but this is what they declare), and assignment of these miles cannot be changed by operation of law. The way these programs are set up is for the airlines to reward the people they want...
What so many objectors to AAdvantage security's actions seem to be missing right now is that AA miles are not yours. They belong to AA and may be reclaimed at any time. By AA fiat they have no value (arguable, but this is what they declare), and assignment of these miles cannot be changed by operation of law. The way these programs are set up is for the airlines to reward the people they want to. I assure you, whether the actions of using "transferable" flyer codes was within "rules" or not, AA reserves the right at any time to take away your miles. You may be unhappy and complain loudly on blogs, but unless you are a high-value AA customer, they do not care.
It's funny how well-defined the "reality" is for those who see acquiring the miles through "loopholes" as legitimate vs those who consider it "fraudulent".
It reminds me of the current impeachment effort. Yeah, I had to get political...
@Jeff L: thanks for well thought out response, rather than just throwing around heavy accusations of fraud.
Re: "Now, if a real someone with an existing account got the mailer, and gave the code to someone else, the issue is a little grayer, but still technically not allowed as the offer was intended specifically for their benefit."
I agree this could be a greyish area. However, in this case, and within the same time frame,...
@Jeff L: thanks for well thought out response, rather than just throwing around heavy accusations of fraud.
Re: "Now, if a real someone with an existing account got the mailer, and gave the code to someone else, the issue is a little grayer, but still technically not allowed as the offer was intended specifically for their benefit."
I agree this could be a greyish area. However, in this case, and within the same time frame, Citi had also sent out different mailer codes that were hard-coded against changing name and FF# in the application. They also sent out offers which explicitly called out the non-transferability.
So while, typically, the recipient may be able to reasonably infer that the offer was just for them, the explicit nature of Citi's other offers reasonably implies that the lack of language and hard-coding means they are, indeed, transferable.
Seaguy,
What about AA's questionable ethics? AA keeps devaluing the customer-paid-for benefits acquired by AA loyalty program customers, big and small. Where is the ethics in that kind of scummy corporate behavior? Of course, ethical wrongs are still wrongs and two wrongs don't make a right, but perhaps not all of AA's account shutdowns are all so innocent either .... especially when AA seems more eager to shut-down accounts and try to whip up a...
Seaguy,
What about AA's questionable ethics? AA keeps devaluing the customer-paid-for benefits acquired by AA loyalty program customers, big and small. Where is the ethics in that kind of scummy corporate behavior? Of course, ethical wrongs are still wrongs and two wrongs don't make a right, but perhaps not all of AA's account shutdowns are all so innocent either .... especially when AA seems more eager to shut-down accounts and try to whip up a storm in a teacup by not giving individual warnings and remedial chances to its customers whose mileage balance accounts have been fully paid for by AA customers/partners.
AA gets the customers it deserves. Fortunately, I'm not one of those, as I am able to minimize my dealings with AA more than used to be the case, never been big into the airline loyalty bank card game, and I'm all the better for my capping off my relationship with AA. Unfortunately, AA is one of the government-backed industry cartel kingpins and so there is no absolute escape from the impact of AA's questionable ethics at and from the top of the company management pyramid.
It’s pretty safe to assume that most new AA accounts opened are opened via online activity as paper applications for AA accounts are no longer very commonly used (if there are even any out there anymore)?
It’s pretty safe to assume that AA can track down IP related information for AA accounts applied for online?
It’s pretty safe to assume that AA can track down AA accounts where the account addresses on file are shared...
It’s pretty safe to assume that most new AA accounts opened are opened via online activity as paper applications for AA accounts are no longer very commonly used (if there are even any out there anymore)?
It’s pretty safe to assume that AA can track down IP related information for AA accounts applied for online?
It’s pretty safe to assume that AA can track down AA accounts where the account addresses on file are shared by say 9+ people at physical addresses (that perhaps aren’t multi-family residential property)?
It’s pretty safe to assume that AA can track down AA accounts that received X (or X+) miles from bank card activity in Y period of time?
It’s pretty safe to assume that AA and/or Citi can track the AA Citi card application mailers’ distribution and utilization history?
Can’t say I’d be surprised if something like this was how AA arrived at a list of bank card-churning-related accounts to shutdown.
I never thought I’d say this, but: good for American. This type of “let me see what I can get away with” behavior is wrong. It’s a lack of ethics and I hope those engaged get banned for life.
loophole
noun LAW
a failure to include something in an agreement or law, which allows someone to do something illegal or to avoid doing something
(Definition of "loophole" from the Cambridge Business English Dictionary © Cambridge University Press)
A loophole is "legal" fraud. Just because it "is" legal doesn't make it right. Call it hakuna matata or whatever you want. It's just a wolf in sheep's clothing.
You say loophole, I say fraud. I suspect the majority of average people would say fraud.
From a strictly legal/contractual standpoint.
If a company X sends an invitation to John Smith specifically to participate in a promotion, they do not have to define it as non-transferable. An invitation sent to an individual is considered to be for that individual UNLESS it says something like 'or give this to your friend', or 'or current resident', which is exactly why mailers say that.
So, if you (John Smith), sign up for a new...
From a strictly legal/contractual standpoint.
If a company X sends an invitation to John Smith specifically to participate in a promotion, they do not have to define it as non-transferable. An invitation sent to an individual is considered to be for that individual UNLESS it says something like 'or give this to your friend', or 'or current resident', which is exactly why mailers say that.
So, if you (John Smith), sign up for a new account as Mike Smith at the same address, the resulting invitation is for the use of the non-existant Mike Smith (legally). For John Smith to use that invite would be technically Theft by deception without the express consent of the invitor AND related parties. Normally prosecuted? No, but would fall under that statute in most jurisdictions as a misdemeanor.
To put it another way, legally again, the purpose of the above offer was to give Mike Smith the option to perform an act for the benefit of Mike Smith. If Mike Smith were to perform the act and then give the proceeds of said act to John Smith that's fine. But Mike, by not existing, could not do that. This one is black letter.
Now, if a real someone with an existing account got the mailer, and gave the code to someone else, the issue is a little grayer, but still technically not allowed as the offer was intended specifically for their benefit. But they could make the argument they were just saving a step and planned to transfer the miles anyway (counter argument, the app should be in their name). In community debt states where its treated as joint with spouse you could certainly make this argument.
As far as AA's actions, again legally, Citi is irrelevant. The invalidating act is the purchase or acquisition of a separate account (regardless of who did it) under false pretenses, for the purpose of obtaining benefit on another account OR making a transaction into or out of an account for false pretenses. The fact that Citi allowed it is legally not relevant.
At a minimum, AA is 100 percent legally in the right to claw back those miles. They can also close the account per terms and conditions, although if the account had legitimate miles in it as well, that's a bit of a dick move.
Cancelling tickets in progress again is a bit grayer. I'd need a contract specialist to check me on this one, but once the trip was in progress different rules may apply, as long as the offending tickets were on the same itinerary. If booked separately, unused legs are fair game under the T+C.
So Legally and Ethically, AA will be in the clear for most cases if not all.
That doesn't mean they handled it well. First of all, instead of a quick closure, they could have locked accounts instead and let people appeal within a reasonable time and not be able to earn or redeem miles while under appeal. Not required to, but they should have done so, except in the most obvious cases (if you do in fact create 10-12 accounts in the same house where two people live? That's clear intent).
For canceled tickets, people should have been allowed to purchase real miles, use legit miles still in account, or pay cash to keep them active (I would say price at time of booking but that may be impractical).
For trips in progress, they should have let them finish, even possibly bumping them down to the lowest available class (let people get home). Again, not required to, but just the civilized thing to do (event in the case of clear offenders).
And their communication sucked.
So, while they could have done better, AA did nothing wrong.
Finally, lets talk lawsuits. Except in age cases, no one affected by this has a leg to stand on EXCEPT possibly the few exceptions noted above, and even then cost and effort would likely outweigh results. AAdvantage's T+C is written to give maximum cover to the airline, miles have no legal value, and they will be able to state intent in most cases. The other exception might be those who were cancelled mid-trip. If they can prove they acted with fair intent, any costs of getting home, missing vacation, etc, could be considered actual incurred costs. But other than that, good luck. (Oh and for those considering small claims? AA will just petition the court in that area to have them all heard at once, and send one local lawyer in with a pile of statements as to why the petitioner did bad acts. Cost them probably $500 to clear 20-30 cases plus some admin time.
That's nice, Reginald. I never signed up for an AA credit card and avoid AA whenever possible, but ok. I just find the story fascinating. It's interesting to see folks throw around words like "fraud" and "embezzlement", when really it's just exploiting a gaping loophole that Citi left open. Getting into the weeds on fine print is fun for us lawyer-types, although it is disappointing to see how ignorant the general public is.
Frankly, I'd love to see AA really come down hard on the perpetrators who refuse to own up to their wrongdoing like MrDioji.
@MrDioji Sure… And just because you're spinning it, it doesn't make it true. In fact, that's exactly what I was talking about. Keep living in Narnia, though. I didn't embezzle and commit fraud, so it doesn't affect me one bit.
@Commenting Commenter:
Just because you say something doesn't make it true. It's Marketing mail. People share coupons all the time. It's the same thing. Companies send TARGETED marketing offers all the time, too. And they either have language about it being only intended for the recipient and/or code it to be able to be used only by the recipient. Tons of companies do this - including Citi on other AA CC marketing mailers. The lack...
@Commenting Commenter:
Just because you say something doesn't make it true. It's Marketing mail. People share coupons all the time. It's the same thing. Companies send TARGETED marketing offers all the time, too. And they either have language about it being only intended for the recipient and/or code it to be able to be used only by the recipient. Tons of companies do this - including Citi on other AA CC marketing mailers. The lack of language and coding is significant. No matter how you try to spin it.
No need to have the disclosure about non-tranferability. If you got mail for YOU with an offer from a business for YOU, it's meant to be for YOU (not like the ridiculous analogy that someone wrote about, of the money that your mom sends to you and you decide to give it to someone else). You can try to spin it however you want, but that's the way it is.
The fact of the matter...
No need to have the disclosure about non-tranferability. If you got mail for YOU with an offer from a business for YOU, it's meant to be for YOU (not like the ridiculous analogy that someone wrote about, of the money that your mom sends to you and you decide to give it to someone else). You can try to spin it however you want, but that's the way it is.
The fact of the matter is that the USA is about protecting business interests, not the consumer, so good luck sticking it to AA. I don't like AA and avoid flying them as much as possible, but I'm with AA on this one.
American Airlines is a disaster. They have a reckless CEO that is trying to reduce costs to pay for his USAir/AA merger. They are the worst airline in terms of getting people to sign up for their card...forcing their flight attendants to make an announcement and walk the aisles in a desperate attempt to get people to sign up. Yet when people DO SIGN UP, using THEIR promotion, the cancel their account. I'm sure they've...
American Airlines is a disaster. They have a reckless CEO that is trying to reduce costs to pay for his USAir/AA merger. They are the worst airline in terms of getting people to sign up for their card...forcing their flight attendants to make an announcement and walk the aisles in a desperate attempt to get people to sign up. Yet when people DO SIGN UP, using THEIR promotion, the cancel their account. I'm sure they've passed a long a lot of ill will to some customers for a program their marketing department developed by cancelling accounts.
I have 2 million miles with American. I try to avoid them these days. Recent news:
- mechanic sabotaged a plane in Miami. Note there are NUMEROUS incidents of unhappy AA labor. Again, the CEO trying to choke down costs.
- AA just today ranked the LOWEST on long haul flights. That is so sad. Ranked lower that BA.
- I was on a flight recently where the flight attendant in first class was yelling...yelling at the person loading the plane with food and drinks. All of us up front observed this.
American will be back (I hope) some day. But until the current leadership team is changed out I fear this airline will charge top tier prices for what truly is now a budget airline.
Note: I do not have any AA credit card nor have I attempted to get one. I do, however, have 4 Delta credit cards that I've been happy with for the past 4 years. I got a sign up bonus for each and I achieve their mileage and spend credit each year...Delta seems very happy to have my business.
"AA will be alienating and creating bad press among the most with-it travelers out there."
I think this comment explains neatly why it is that everyone in the frequent flier community gets up in arms the moment a loophole gets closed, the mistaken belief that they are somehow more valuable customers than others. As I've argued numerous times on other posts, the likelihood is that the points community is probably the least profitable segment out...
"AA will be alienating and creating bad press among the most with-it travelers out there."
I think this comment explains neatly why it is that everyone in the frequent flier community gets up in arms the moment a loophole gets closed, the mistaken belief that they are somehow more valuable customers than others. As I've argued numerous times on other posts, the likelihood is that the points community is probably the least profitable segment out there, especially compared to those who pay cash for seats up front and suite/club level rooms.
Also I am endlessly amused by the weird bifurcated snobbery, where frequent fliers look down on those in the back and those without elite status, and yet cry class warfare when people paying cash get priority. You cannot have it both ways.
"AA will be alienating and creating bad press among the most with-it travelers out there."
I think this statement is a good insight into why people are so up in arms; the mistaken belief that churners and people fixated on points are the "most with it travelers out there." In fact, as I've argued in other posts, the likelihood is those people are probably the least profitable group of travelers, and certainly don't approach the...
"AA will be alienating and creating bad press among the most with-it travelers out there."
I think this statement is a good insight into why people are so up in arms; the mistaken belief that churners and people fixated on points are the "most with it travelers out there." In fact, as I've argued in other posts, the likelihood is those people are probably the least profitable group of travelers, and certainly don't approach the value of individuals who spend cash for seats up front/suites and club level at hotels. This isn't to defend AA or any of the huge monolith tourist companies, but rather an indicator that simply being a churner doesn't actually accord you any special benefits or rights above and beyond any other traveler, and certainly doesn't make you a more valued customer than others.
I have respect for one "justifier" of the fraud they were committing. The one that said they road the train and knew it would come to an end. ALL the others were just as aware as this commenter, they are now panicking. I hope they had a negative impact on legitimate family member's accounts. Play the game and you eventually get caught.
I have always found very interesting the different views on Multi Level Marketing.
Often it depends which side on the fence person is standing on.
Newest = Economy Web Special.
On the other side: It is very common for people who have been caught doing something iffy to bluster and try and look for any justification for their actions, including using some very dodgy reasoning. “Other people did something wrong and didn’t...
I have always found very interesting the different views on Multi Level Marketing.
Often it depends which side on the fence person is standing on.
Newest = Economy Web Special.
On the other side: It is very common for people who have been caught doing something iffy to bluster and try and look for any justification for their actions, including using some very dodgy reasoning. “Other people did something wrong and didn’t get caught so it’s not fair that I got caught” or even the trusty old “They were careless about security so they deserved it”
The point has nothing to do with mailers or bonus points, simply fake aadvantage accounts.
It's totally okay, ethical, and legal to apply then churn multiple Citi aadvantage cards to get millions of mileage bonus because applicants are GENUINE.
It's not okay to create fake aadvantage accounts because applicants are NOT GENUINE.
SJW are chasing after wrong people!!!
I am not sure if anyone else has made this point, but it seems to me that it is at least inappropriate (and maybe breach of contract?) for banks to provide an incentive to reach spending threshholds in order to earn points, which are then taken away for sometimes spurious reasons. I agree that if someone lost points for taking bonus miles in less than the allowed time frame, this is a violation of the...
I am not sure if anyone else has made this point, but it seems to me that it is at least inappropriate (and maybe breach of contract?) for banks to provide an incentive to reach spending threshholds in order to earn points, which are then taken away for sometimes spurious reasons. I agree that if someone lost points for taking bonus miles in less than the allowed time frame, this is a violation of the bank's and/or airline's rules. But if someone filled out a mailer that listed NO limitations, then met the spending threshhold, then lost their miles - something is VERY WRONG with that practice. From all the posts I've read in this thread, it is not clear how many people might have had their accounts locked who did nothing more than respond to mailers sent to them with no limitations described in the mailer. It seems to me that this is a breach of contract on the part of the bank and/or AA.
All this discussion about whether or not mailers had or had not some language on, or what Citi may or not have said/done seems completely beside the point.
This whole business seems to rely on setting up multiple AAdvantage accounts for non bon-fide purposes. Setting up an AAdvantage account for an non-existant user is pretty much the dictionary (and legal for that matter) definition of misrepresentation.
That is all the smoking gun AA needs.
Everything...
All this discussion about whether or not mailers had or had not some language on, or what Citi may or not have said/done seems completely beside the point.
This whole business seems to rely on setting up multiple AAdvantage accounts for non bon-fide purposes. Setting up an AAdvantage account for an non-existant user is pretty much the dictionary (and legal for that matter) definition of misrepresentation.
That is all the smoking gun AA needs.
Everything else to do with Citi, and what miles may have been claimed or transferred is irrelevant - the simple matter of setting up the dodgy AAdvantage accounts is enough for AA to take action.
It is very common for people who have been caught doing something iffy to bluster and try and look for any justification for their actions, including using some very dodgy reasoning. "Other people did something wrong and didn't get caught so it's not fair that I got caught" or even the trusty old "They were careless about security so they deserved it"
@SK
I've heard of only one incident where a passenger was thrown out mid-flight. Passenger was given a parachute, dumped out over the Pacific, and told to swim home.
So much fun reading all the posts on this blog from the fraudsters and con artists who think it is their god given right to rip off a FF program just because a 3rd party website application let them get away with it - up until now.
So many sore losers who thought they got away with the rip off who our now so outraged that they have been busted with their pants down.
Keep...
So much fun reading all the posts on this blog from the fraudsters and con artists who think it is their god given right to rip off a FF program just because a 3rd party website application let them get away with it - up until now.
So many sore losers who thought they got away with the rip off who our now so outraged that they have been busted with their pants down.
Keep up your whingeing and complaints - its great sport and is probably even better than watching sport on the TV.
Sympathy level = ZERO.
Well I guess OMAAT readers are Reddit readers after all. Not surprising. Lol
Bravo AAdvantage! These fraudsters who obtain mileage credit by breaking the AAdvantage rules dilute the value of miles obtained by those of us who meticulously abide by the AAdvantage rules. I can tell from the behavior of some of my fellow first class passengers that they would likely use fraudulent miles to obtain their seats. At any rate, I do hope that the end result of this purge will make it more likely to obtain award seats using legit miles. Platinum Pro
AA clearly has the right to terminate people's accounts. Their T&Cs are incredibly one sided and the courts have eliminated anyone's ability to challenge an airline's actions under its T&Cs.
Whether what AA did is fair is another matter. Some people abused the system and knew it. Others might be more innocent. It's hard to tell from here.
@magice "stranding people mid-travel is simple sadistic."
I disagree. An analogy:
If you steal a car and drive it to Alaska, go for a coffee and police found the car... Would you be mad to be stranded in Alaska? Is the police supposed to allow you to drive back and only then take the car back?
It doesnt matter if transferrable legal copy was there or not.
Some interesting points from terms:
A) you are not supposed to have 2 of the same product at Citi
B) you are not supposed to have 2 AAdvantage cards (of the same type) even though this rule has never been enforced (same with Delta cards)
C) it is on the sole discretion of AA to shut down any account they want for the reasons they want
AA is being reasonable. (ab)Users are not.
Beside the question of who's right and who's wrong, it's disturbing that AA keeps doing things without advanced notice. A few months back, after being out manuvered by Delta over LANTAM, apparently they refused baggage transfers in existing tickets. Now this, also cancellation without advanced notice.
AA may as well be right and these people were against the rules (but the rules keep changing anyway...). However, that's no excuse for doing craps to people travel...
Beside the question of who's right and who's wrong, it's disturbing that AA keeps doing things without advanced notice. A few months back, after being out manuvered by Delta over LANTAM, apparently they refused baggage transfers in existing tickets. Now this, also cancellation without advanced notice.
AA may as well be right and these people were against the rules (but the rules keep changing anyway...). However, that's no excuse for doing craps to people travel plans without notice or negotiation. And stranding people mid-travel is simple sadistic.
For these things, one would really expect them to send out official mails (not email), explaining why they accuse the travelers of fraud, and what course of actions are required to dispute such accusation. At minimum a week of notice would be fair, so that the accused can defend themselves and arrange for alternatives travel if needs be. Anything less is trickery.
Finally, one would also expect them to firm up future prevention of this. I mean, who wouldn't attempt to squeeze out every bit of value from an exchange. AA clearly do, with their multiple changes to their program over the years. So, if fraud prevention is important, they should ensure people don't accidentally cross the line from maximization to violation. But no such actions seem to happen. What does that tell you?
The more you look, the worse AA actions come out. It seems like someone is working very hard to simply nullify AA liabilities, and that's just bulls.
I have no skin in this game but I am interested in the legal argument. I'm sure there's something in AA's rules and regs that allows them to close accounts, cancel flights etc based on their discretion, but they've also made a contract with the customer and that itself wouldn't hold up, so then the language on the mailers becomes important. If it stated these offers were non-transferable, then it's over. If it didn't, these...
I have no skin in this game but I am interested in the legal argument. I'm sure there's something in AA's rules and regs that allows them to close accounts, cancel flights etc based on their discretion, but they've also made a contract with the customer and that itself wouldn't hold up, so then the language on the mailers becomes important. If it stated these offers were non-transferable, then it's over. If it didn't, these people might have a case despite being ethically in the wrong. It's interesting. Please keep us updated.
Hi y'all. I have read through all these responses. I'll respond with a brief story to elucidate right & wrong.
Dan says:
you knew this was breaking the spirit, if not the letter of the law. And that given the wide latitude airlines have on closing loyalty accounts, getting TOSsed was always a strong possibility.
-------------------------------------
Here's my response. Once upon a time a bank, with the initials WF, had an employee code of...
Hi y'all. I have read through all these responses. I'll respond with a brief story to elucidate right & wrong.
Dan says:
you knew this was breaking the spirit, if not the letter of the law. And that given the wide latitude airlines have on closing loyalty accounts, getting TOSsed was always a strong possibility.
-------------------------------------
Here's my response. Once upon a time a bank, with the initials WF, had an employee code of conduct that read like the Internal Revenue code, and ended up with the bad employees looking for loopholes. So they replaced it with a code of conduct more like: you know what's wrong, we don't have to tell you. You do something wrong and you get fired.
In case anyone misses the moral of the story, employees have no defense in "playing dumb" when caught. Using someone else's mail (or employee key card, corporate jet, whatever) will absolutely, positively get you fired from your job. Claiming that a form that does not specifically state "non-transferable" is really overtly transferable will get you fired. Employees have no "right" to transfer company benefits, just because they weren't told not to.
No surprise at all that such conduct also gets members fired from their FF program. It's too bad that Hilton didn't fire members back when similar people opened Citi Hilton cards over and over.
With all the messages mentioning AA and it’s wrong tactic to shutting down accounts, why isn’t Citi being held responsible for ripping off consumers who have done legitimate spends on their Citi AA cards?
Citi clearly made the cc fees from the consumers spends and now don’t even have to pay out the bonuses! It’s like the class action suit with the IRS 1099 forms. https://www.doctorofcredit.com/citibank-class-settlement-issuing-1099s-aa-mileage-bank-bonuses/amp/
Citi and AA are doing some fishy...
With all the messages mentioning AA and it’s wrong tactic to shutting down accounts, why isn’t Citi being held responsible for ripping off consumers who have done legitimate spends on their Citi AA cards?
Citi clearly made the cc fees from the consumers spends and now don’t even have to pay out the bonuses! It’s like the class action suit with the IRS 1099 forms. https://www.doctorofcredit.com/citibank-class-settlement-issuing-1099s-aa-mileage-bank-bonuses/amp/
Citi and AA are doing some fishy accounting to their end of year numbers.
Would like to see how Citi and AA would get away with this without some type of legal action from AA accounts that were shut down.
Also, this AA tactic of shutting down accounts and stranding people during this holiday season is in line with the First Class experience @lucky just wrote about https://onemileatatime.com/american-airlines-first-class-service/
“ What Happened To Basic Manners?”
Clearly AA has no manners whatsoever with this shutdown fiasco!
Anyone thrown off an aircraft mid-flight so far?
Ben (Lucky) asked a key question in his post:
"So that leads me to the question — has anyone had their AAdvantage account shut down who didn’t do any of the (below)?
Opened AAdvantage accounts for people who don’t exist
Used codes not intended for the people listed on the mailers
In many cases it seems people in turn sold or bartered the miles that they got this way"
After reading comment...
Ben (Lucky) asked a key question in his post:
"So that leads me to the question — has anyone had their AAdvantage account shut down who didn’t do any of the (below)?
Opened AAdvantage accounts for people who don’t exist
Used codes not intended for the people listed on the mailers
In many cases it seems people in turn sold or bartered the miles that they got this way"
After reading comment after comment (OK I gave up around the 5pm comments) I see only one response (@AAsad) relevant to Lucky's question.
I've accumulated points aggressively in the past but I've adjusted with the times and lowered my risk profile over the last two or three years. Fewer points coming in, better sleep. I fully understand the temptation to go hard - but if you go hard and don't burn your points quickly just understand the risk you are taking. Do not ignore the "abuse" enforcement trendline evident in the actions of card issuerer and loyalty programs.
People are also getting the cards and charging the dollar amounts they need to get bonus miles by purchasing money orders in the dollar amount needed then sending the money orders back to the credit card company as payment to pay off the balance before being charged intrest.
Actually it's much more like this: your brother opened the mail from you and said “I don’t have a use for this" and gave the $100 (mailer) to one of his roommates. The roommate then called you (Citi) and said “hey is it cool that I spend this $100 that you sent to your brother”, and you say “yes that’s fine” (application approved, miles awarded). Then your Mom (AA) gets all mad that the $100...
Actually it's much more like this: your brother opened the mail from you and said “I don’t have a use for this" and gave the $100 (mailer) to one of his roommates. The roommate then called you (Citi) and said “hey is it cool that I spend this $100 that you sent to your brother”, and you say “yes that’s fine” (application approved, miles awarded). Then your Mom (AA) gets all mad that the $100 you (Citi) were supposed to give to your brother (mailer recipient) ended up with his roommate (applicant). His mom goes to the frathouse and starts stealing the roommate's books and whatnot to try to get back at him, even though he had an agreement with both of her kids. She should be mad at her kids and herself for not making it clear (T&C) that the $100 was specifically meant for your brother. The roommate had agreement from the recipient (mailer recipient) and the giver (Citi). It shouldn't matter what your roommate's mom (AA) thinks, until she overreaches her bounds.
Has everyone threatening to sue AA checked to see whether their account agreement has an arbitration clause? Maybe requiring the case to be filed in Texas? No? I didn't think so.
It seems to be a frequent complaint about AA that there is never award availability on their own flights. Maybe that's because all the seats have been booked by the gamers. American sells miles wholesale to Citi -- it wants to sell as many...
Has everyone threatening to sue AA checked to see whether their account agreement has an arbitration clause? Maybe requiring the case to be filed in Texas? No? I didn't think so.
It seems to be a frequent complaint about AA that there is never award availability on their own flights. Maybe that's because all the seats have been booked by the gamers. American sells miles wholesale to Citi -- it wants to sell as many as possible without doing damage to its retail side, but it doesn't want to do so much damage tothe program that it dies. Is American going to refund Citi, for the canceled miles that can be traced to its cardholders? We might never find out.
Daniel,
It's more like this: your brother opened the mail and said "I don't have a use for this" and gave the $100 to one of his roommates. The roommate then called you and said "hey is it cool that I spend this $100 you sent to your brother" and you say "yes that's fine". Then the liquor store he blew the $100 at tries to come after the roommate saying he stole $100 in booze since that $100 wasn't originally intended for him.
“I’ve checked an expired physical mailer carefully. There is no verbiage that declares the mailer to be exclusively for the addressee. None. Zilch.”
@knick You don’t think a letter being addressed to someone is sufficient to imply the offer is for that person alone? Is there similar confusion with tax returns, parking tickets, envelopes of cash?
Say my college aged brother lived in a frat house with 20 people, and I sent him a...
“I’ve checked an expired physical mailer carefully. There is no verbiage that declares the mailer to be exclusively for the addressee. None. Zilch.”
@knick You don’t think a letter being addressed to someone is sufficient to imply the offer is for that person alone? Is there similar confusion with tax returns, parking tickets, envelopes of cash?
Say my college aged brother lived in a frat house with 20 people, and I sent him a $100 bill inside an envelope addressed to him for his birthday. It is your serious contention that unless I also stated the cash was not for anyone else, that there would be confusion as to who had rights to the cash?
Eskimo, feel free to join a class action. You'll get pennies on the dollar for whatever you had in your account.
Daniel danielndaniel miles are property buddy. What the f are u talking about? If they were not property they they couldnt have been used to buy the tickets..... So then Aa. Could not have cancelled them.
Read between the lines.
Banks can't shutdown your account due to many legal reasons, Hence AA bite the bullet and closed it instead.
You will get 10x more settlement from regulated banks than unregulated FFP.
Exploitative practice is a very vague term. AA can always claim many things exploitative including flying A to B with a stop to get more EQM/miles than flying non-stop for the same price.
AA is really crossing the legal line...
Read between the lines.
Banks can't shutdown your account due to many legal reasons, Hence AA bite the bullet and closed it instead.
You will get 10x more settlement from regulated banks than unregulated FFP.
Exploitative practice is a very vague term. AA can always claim many things exploitative including flying A to B with a stop to get more EQM/miles than flying non-stop for the same price.
AA is really crossing the legal line here. While those who abuse it should be condemned, it is AA and Citi that left a loophole. They had the opportunity to close it and suck it up but didn't. Citi needs AA to do the dirty work for legal reasons.
Now if AA is closing accounts and there are still these mailers being sent, this can be prejudice and weakens AA reasoning.
P.S. For a person who is banned from United, one should understand better where those affected is coming from and how AA is actually crossing the line.
Reginald the class action lawyer i spoke to.todsy would.encourge them to buy notify as they will.pay ticket in cash and expect aa to refund amount. And then sue aa for fraud. The class action lawyer i spoke with.was very confident
Can someone explain the case for fraud. And who was defrauded?
For folks not yet shut down is there any option to redeem AA miles for merchandise, gift cards, etc?
A case of fraud by some, embezzlement by others and theft when the points were taken and not returned ;-)
Agree 100% with Bill. I'd laugh so hard if someone was in the Maldives and their Etihad apartment return award was cancelled forcing them to fly home in paid AA Y.
LMAO!!!
I was already comtscted by a class action lawyer to sue AA. Wanted me to be a class rep after my posts on flyer ta'll. Her argument is that the citi application didn't mention only new flyers and could have and if aa cared they shoyls have done a dry run. I probably won't join as class rep because I want to protect my name but he claims siit could be work 600 million usd.
"and has even canceled tickets booked out of those accounts, even if people are halfway through their journey." that is gangster. Oh well people who engaged in this behavior deserve what they get.
How could they cancel flights that have been booked for months? Without warning too!
If they really continue to do this, I will definitely pursue legal action!
@brteacher, I'm glad your buddies are getting stranded. It's people like that who think only of themselves that ruin this hobby for the rest of us.
Honestly, screw them.
AA wanted to reduce the outstanding FF miles to look good on their balance sheet in 2020. That's one of the reason.
@Daniel
Your no.2 argument about why miles are not taxable because you do not own them is completely wrong.
Yes you do not own the miles because the T&Cs of loyalty program are completely lopsided to the benefit of the program administrator, not the members. Why? because there is no government overseeing bodies govern these programs unlike the banks have a myriad of overseeing agencies to keep them semi straight (and of course they still...
@Daniel
Your no.2 argument about why miles are not taxable because you do not own them is completely wrong.
Yes you do not own the miles because the T&Cs of loyalty program are completely lopsided to the benefit of the program administrator, not the members. Why? because there is no government overseeing bodies govern these programs unlike the banks have a myriad of overseeing agencies to keep them semi straight (and of course they still try to screw their customers to line their pockets - need we bring up Wells Farco's scandal in recent years?)
The reason why miles and points are not taxable because they are considered as a discount, not an income.
Here is an article written to make layman to understand the matter better and not having a misconception on how things work.
https://creditcards.usnews.com/articles/are-credit-card-rewards-taxable
Quote
Credit card reward bonuses: When it comes to rewards bonuses, things get a little murkier. Depending on how you earned the bonus, the points may or may not be taxable.
Let's say you opened a new credit card that offered a 40,000-point bonus for meeting a spending requirement of $4,000 within the first three months of opening the account. If you met the requirement and earned the bonus, you wouldn't have to report the points as income.
However, if you didn't have to meet any spending threshold and were simply awarded the points for opening an account, the value of those points would be considered taxable income.
"The only time that credit card rewards are taxable is when you do nothing in exchange for the reward," says Rossman. This situation is treated the same as when you earn a cash bonus from your bank for opening a new checking account. The IRS considers it taxable income, and the financial institution may issue a 1099 form reporting that payment.
Unquote
That is why the sign up bonus that you have to meet a spend requirement, is not taxable, while a bank account opening bonus you dont have to do anything other than put in the required deposit in the account is taxable.
I've been playing the airline miles and points credit card game and mileage running for 15 years. There have been opportunities in the past to take advantage of "loopholes" that I occasionally got involved in.
However, I was not under any illusion that I was 100% in the right. If I had to buy, or fake, any information, in my consideration, it was already on a slippery slope, and I accepted the reality that...
I've been playing the airline miles and points credit card game and mileage running for 15 years. There have been opportunities in the past to take advantage of "loopholes" that I occasionally got involved in.
However, I was not under any illusion that I was 100% in the right. If I had to buy, or fake, any information, in my consideration, it was already on a slippery slope, and I accepted the reality that I may lose my status or miles/points.
Those people who had to acquire the invitation (other than under their own name, and no more than once) were exposing themselves to the risk, and kidding themselves to think they didn't do anything wrong; especially because it didn't say it was "non-transferable".
Honestly, I’m surprised by all this corporate empathy for AA here. Do you people really think AA cares about you? I literally just had a 20 hour delay on a thanksgiving trip that I had to cancel the whole trip on because of. Give me a break.
This was not fraud. No terms and conditions were violated in the mailers . Citi paid for these miles and then was lax in their credit appetite and...
Honestly, I’m surprised by all this corporate empathy for AA here. Do you people really think AA cares about you? I literally just had a 20 hour delay on a thanksgiving trip that I had to cancel the whole trip on because of. Give me a break.
This was not fraud. No terms and conditions were violated in the mailers . Citi paid for these miles and then was lax in their credit appetite and let this happen. AA should be going after Citi not savvy consumers. AA will be alienating and creating bad press among the most with-it travelers out there. In the end this will hurt their brand and they will lose business. Not to mention possible litigation depending on what goes down. I certainly will consider lawyering up depending on what happens. Everyone should get off their weird high horses and actually read the language.
I would say,people that are peddling these Cards and mentioning that they were able to get AA credit Card points/miles while already having them are also responsible!
For extra clarity, when you apply for an AA credit card through Citi, it says right in the application that you consent to enrollment in the AAdvantage program if you aren't already a member, which is subject to separate terms and conditions. Citi doesn't need to spell anything out about AAdvantage fraud, misrepresentation or abuse; those T&C's are incorporated by reference.
Just because Citi let applicants do all kinds of crazy stuff with the...
For extra clarity, when you apply for an AA credit card through Citi, it says right in the application that you consent to enrollment in the AAdvantage program if you aren't already a member, which is subject to separate terms and conditions. Citi doesn't need to spell anything out about AAdvantage fraud, misrepresentation or abuse; those T&C's are incorporated by reference.
Just because Citi let applicants do all kinds of crazy stuff with the AAdvantage credit cards for X number of years doesn't mean it was acceptable. American is just exercising their legal rights within their T&C's. They don't even need to spell out what defines "fraud, misrepresentation or abuse." I have no doubt these T&C's were written by well paid lawyers who would also believe all these account shutdowns, with the rare truly innocent person exception, are defensible in court as fraud, misrepresentation or abuse after presenting evidence to the court.
Thank you for highlighting this subject Lucky.
So wrong of banks and airlines to destroy people's travel plans without even truly investigating how they got their bonuses. Cruel of American Airlines at this time of year. I won't fly them again after their handling of this.
I'm not involved in this in any way, but I know a few people who are. There are plenty of people who violated absolutely zero rules who are getting stranded mid-travel.
That's wrong, plain and simple.
Some of you commenters are simply trash people. I'd hate to be on trial with you on a jury. "Well, most of the people who get charged with crimes are guilty, so I'm sure that you're guilty too."
I wonder if anyone was stuck abroad and showed up for their return flight only to learn their award tickets been cancelled. That certainly would have made for a good laugh.
I love seeing fraudulent accounts get their miles confiscated. I only wish I could have been there to see the balances drop to zero with a single click.
Also, if you're indeed guilty of this fraud, I have no compassion for your flight being canceled in the middle of the holiday season, blah, blah, blah. Let me play the violin for you… Harsh? Maybe. But harsh is the only way people learn. This whole BS of being lenient and there not being any repercussions are just creating a bunch of snowflakes who can't cope with life.
I've checked an expired physical mailer carefully. There is no verbiage that declares the mailer to be exclusively for the addressee. None. Zilch. Email offers are different and do have such language although I have never seen one. Whatever and whoever was doing wrong, Citi certainly could have easily fixed this in a dozen ways, preventing the whole too-many-cards. With none of the proposed language on the old mailers and Citi happy to approve cards...
I've checked an expired physical mailer carefully. There is no verbiage that declares the mailer to be exclusively for the addressee. None. Zilch. Email offers are different and do have such language although I have never seen one. Whatever and whoever was doing wrong, Citi certainly could have easily fixed this in a dozen ways, preventing the whole too-many-cards. With none of the proposed language on the old mailers and Citi happy to approve cards every 30 days ... where was the fraud and abuse? If we're getting technically, nowhere did these physical mailers say that couldn't be sold/purchased or shared with friends. But I guess the post shows an interesting slant ... almost as shady as the suggested offenses.
Rather than closing down accounts, AA should be referring anybody they suspect of engaging in fraud (and yes, fraud is the legal term for knowingly violating and deceiving terms and rules for personal gain) for both criminal and civil review. If the people are actually deemed to be engaged in fraud they'll owe AA a lot of compensation and/or spend a good bit of time in prison. If they are not deemed to be engaged...
Rather than closing down accounts, AA should be referring anybody they suspect of engaging in fraud (and yes, fraud is the legal term for knowingly violating and deceiving terms and rules for personal gain) for both criminal and civil review. If the people are actually deemed to be engaged in fraud they'll owe AA a lot of compensation and/or spend a good bit of time in prison. If they are not deemed to be engaged in fraud, they can keep their accounts and miles. Simple. I suspect most of the people with closed accounts would rather lose their accounts and miles than potentially spend time in the courts though.
My daughter would have been Lucky's age, but we lost her 6 years ago to a drunk driver. She had a US Airways card, which we closed along with her Dividend Miles account within weeks of her death.
We STILL get offers from both Citi and Barclay's for personal and business cards 6.5 years later! Probably 4 or 6 times a year!
Obviously both AA and Citi have created their own problem with piss-poor "list...
My daughter would have been Lucky's age, but we lost her 6 years ago to a drunk driver. She had a US Airways card, which we closed along with her Dividend Miles account within weeks of her death.
We STILL get offers from both Citi and Barclay's for personal and business cards 6.5 years later! Probably 4 or 6 times a year!
Obviously both AA and Citi have created their own problem with piss-poor "list hygiene" which is rule #1 for direct marketing. Pox on both their houses!
Bye, Dan.
Final thought: I don’t give a shit if you ripped off AA. Mildly annoyed I probably had to pay a little more for my legit redemptions, but whatever. What annoys me is the people who have the gall to bitch once the jig met its inevitable end. Unless you’re working a single digit IQ, you knew this was breaking the spirit, if not the letter of the law. And that given the wide latitude airlines...
Final thought: I don’t give a shit if you ripped off AA. Mildly annoyed I probably had to pay a little more for my legit redemptions, but whatever. What annoys me is the people who have the gall to bitch once the jig met its inevitable end. Unless you’re working a single digit IQ, you knew this was breaking the spirit, if not the letter of the law. And that given the wide latitude airlines have on closing loyalty accounts, getting TOSsed was always a strong possibility. If you had any brains, you would’ve burned off any legit miles before piling up the BS miles. But here we are.
Overall, I like move away from churning and travel hacking and loopholes to to more consistent and earned rewards over time. If you want miles or points, spend on your cards over years, book cash flights or hotel stays at your providers, and earn free travel legitimately. Play by the rules. Don’t be a pig. Own stock in the companies you patronize and think like a shareholder. If you do this, you will be fine.
Even if you were to sue AA or there were a huge class action suit that would bankrupt AA (doubtful), the government would simply bail it out. Our government protects business interests, not people.
Airlines own us. When people understand this and realize we're just cattle, nothing should be surprising. They know that people will always need to fly and that people shop for the cheapest price. They can be as horrible as they want,...
Even if you were to sue AA or there were a huge class action suit that would bankrupt AA (doubtful), the government would simply bail it out. Our government protects business interests, not people.
Airlines own us. When people understand this and realize we're just cattle, nothing should be surprising. They know that people will always need to fly and that people shop for the cheapest price. They can be as horrible as they want, and people will keep on throwing money at them.
Next, Citi should close those accounts for which it legitimately has evidence of non-transferable offers being used.
@lucky
You opinion seems to be this way because you have a lack of knowledge about this. I have done a few mailers In the past 2 years probably around 3 total all of them were legit and from people in family who got them that didn’t want it and this is clearly not against the terms and they fully allowed you to change and edit the info and if they didn’t want anyone doing...
@lucky
You opinion seems to be this way because you have a lack of knowledge about this. I have done a few mailers In the past 2 years probably around 3 total all of them were legit and from people in family who got them that didn’t want it and this is clearly not against the terms and they fully allowed you to change and edit the info and if they didn’t want anyone doing this they should have done what Amex did and not allowed you to change the info but based on these terms I didn’t do anything non legit and the fact and AA is just freezing accounts and not even contacting people and even discussing it with them is a total abuse of power and very Illegitimate and unprofessional. I really hope someone from AA sees this and realizes if the future if you don’t want people applying for lots of cards just don’t allow them like every other dam company out there.
Lucky hope you read this and would love you opinion about this in a scenario Like mine with no false accounts etc
Is American truly upset at the "fraudulent" activity, or should they be upset that neither they nor Citi put the proper controls in place to prevent activity readily accepted by the online application, the promo code without name validation, approved by the credit issuer, and further validated for the award miles bonus? I see a preventable systematic breakdown of multiple check points that fall solely on American and Citi. This is system quality control 101...
Is American truly upset at the "fraudulent" activity, or should they be upset that neither they nor Citi put the proper controls in place to prevent activity readily accepted by the online application, the promo code without name validation, approved by the credit issuer, and further validated for the award miles bonus? I see a preventable systematic breakdown of multiple check points that fall solely on American and Citi. This is system quality control 101 - basic blocking and tackling stuff - which American failed to execute and is now treating customers like shoplifters in retaliation.
It's human nature to look for the loopholes. Take a look at any divorce proceeding.
@Dan, to be clear - I have read all the boilerplate, including the account approval notice and confirmation of new bonus which arrive prior to the card, and the terms and conditions that come with with card itself.
They don't need to put up a big flashing sign, but if they don't want people signing up for multiple cards, they should have their partners put that in the terms and enforce it - like so...
@Dan, to be clear - I have read all the boilerplate, including the account approval notice and confirmation of new bonus which arrive prior to the card, and the terms and conditions that come with with card itself.
They don't need to put up a big flashing sign, but if they don't want people signing up for multiple cards, they should have their partners put that in the terms and enforce it - like so many other loyalty programs, partners, and banks do.You know the 4-pages of terms at signup and 11 double-sided pages received with the card. They dropped the ball by not including the language. That doesn't give them the right to knock out a decade of legitimate travel miles and bonuses because they finally caught the oversight and aren't happy.
I get that it is fun to get something for free or for a discount. In evaluating an investment it is often useful to look at the projected cash (miles) flows. A signup bonus based on a certain spend during the first three months is attractive. If I structure a series of transactions to trigger that bonus repeatedly is that savvy or is that fraud? I'm making a series of investments (spend on each account)...
I get that it is fun to get something for free or for a discount. In evaluating an investment it is often useful to look at the projected cash (miles) flows. A signup bonus based on a certain spend during the first three months is attractive. If I structure a series of transactions to trigger that bonus repeatedly is that savvy or is that fraud? I'm making a series of investments (spend on each account) in expectation of return (miles, as agreed to by the programs). If all of that spend is on a specific card issuer (Citi), but in accordance with their rules, I would expect my return to be as agreed.
Yeah, but Lucky took his medicine and moved on right?
He’s not being a whiny little bitch and saying it was a great injustice, right?
The idiots supporting this crap seem to think AA is required to put up a big flashing neon sign prohibiting every last conceivable fraud vector. Common sense is for suckers, I guess.
If you think buying CC offers (addressed to somebody else) from a stranger via the mail is kosher, I’d recommend getting a good attorney on retainer ASAP. Your ass is getting sued any day now. If not over this, then over one of the similar schemes I’m guessing you have going on.
So Lucky is really going to get up on his high horse over this? When he was banned by United for FRAUDULENTLY creating a script to re-using vouchers? And serially complaining over insignificant issues to get UA vouchers? What a joke.
I went to a Chicago Seminar once where Lucky taught us the principles of fuel dumping. Airlines would look at that as fraud and misrepresentation, I'm sure.
I won't rehash all of the corrections...
So Lucky is really going to get up on his high horse over this? When he was banned by United for FRAUDULENTLY creating a script to re-using vouchers? And serially complaining over insignificant issues to get UA vouchers? What a joke.
I went to a Chicago Seminar once where Lucky taught us the principles of fuel dumping. Airlines would look at that as fraud and misrepresentation, I'm sure.
I won't rehash all of the corrections already stated by @Andysol and @Cam and others. But they're definitely spot-on in that while some shutdown people were indeed crossing the line, not everyone was. Many were using the mailers within the bounds of the T&Cs and the rules Citi had in place for apps. And AA is providing no advance notice, no chance to rebut, no chance in the event AA makes an error and cancels flights for those who never touched any mailers, or anything of the sort.
To be clear, Dioji, you haven’t read all the boilerplate either? Including the content that would’ve been sent when you signed for the new card?
lol @ armchair lawyer, Daniel.
The miles/points are not taxed because they are a rebate on spend. Citi Doublecash CASHback is also not taxed. However, Amex sends 1099s for points earned from referrals. (Citi used to send out 1099s for AA miles from bank account bonuses valued at 2.5 cpp.)
@FlyGuy I don't understand what your point in posting is then? We do know it's not fraud, because all actions taken were within the rules laid down by both companies. Organizations don't get to just decide something is fraud because a result occurred which they had not considered.
It's also notable that AA is refusing to actually tell anyone affected WHY they are shutting down their accounts. The boilerplate emails are so generic that...
@FlyGuy I don't understand what your point in posting is then? We do know it's not fraud, because all actions taken were within the rules laid down by both companies. Organizations don't get to just decide something is fraud because a result occurred which they had not considered.
It's also notable that AA is refusing to actually tell anyone affected WHY they are shutting down their accounts. The boilerplate emails are so generic that no determining factor can be derived. If I'm severing a business relationship I better hope I know why.
@AAsad
That is a truly terrifying data point. I'm in the same boat. No sketchy stuff, just 4 AA cards--2 Citi plus 2 Barclay.
@Jessie R
"No AA program rules were touched in this hobby, and all contracts with Citi where done in good faith with accurate application information. It’s one thing to say fraud will catch up to you. But there’s no fraud here. "
We don't know that. Nothing is spelled out in the AA program rules. I'm not even saying this is fraud. Because it's not. W I'm part of this shutdown, likely going to lose...
@Jessie R
"No AA program rules were touched in this hobby, and all contracts with Citi where done in good faith with accurate application information. It’s one thing to say fraud will catch up to you. But there’s no fraud here. "
We don't know that. Nothing is spelled out in the AA program rules. I'm not even saying this is fraud. Because it's not. W I'm part of this shutdown, likely going to lose over 1M miles between me and my spouse. It's one of those things though, that I knew would come crashing down, eventually. I've enjoyed the Etihad apartments, the Qsuites, the JAL redemptions in F. I'll move on and find other loopholes, like we've all have.
I get the emotional ties to the points and the frustrations that we have no answers and no communication from AA. We had two terms of conditions to satisfy here. One is with Citi. Which is the applications and the SUB's. Citi has fulfilled their obligations. (I received another bonus this morning in a locked account). The other is with AA. Completely separate from Citi.
@Rich What "terms" were violated? Citi sent out mailers and allowed them to be used by any individual in possession of them. Program ToCs aren't arbitrary documents, they are written legal policies. What policies are you arguing were broken by people applying for credit cards using their correct and honest personally identifying information?
So many people here claiming what was happening was fraud, yet none of them can produce any evidence that any rule was broken.
@FlyGuy: People aren't literally being taken out the woodshed. But locking accounts from redeeming, shutting down accounts, cancelling flights last minute, and taking away hundreds of thousands of miles, regardless of butt-in-seat miles, first-time CC bonus, repeat bonuses, etc. is figuratively taking people out to the woodshed.
It is a way over reach by AA to take away earned miles, when people were, in fact, OPERATING WITHIN THE RULES. Are the rules silly and...
@FlyGuy: People aren't literally being taken out the woodshed. But locking accounts from redeeming, shutting down accounts, cancelling flights last minute, and taking away hundreds of thousands of miles, regardless of butt-in-seat miles, first-time CC bonus, repeat bonuses, etc. is figuratively taking people out to the woodshed.
It is a way over reach by AA to take away earned miles, when people were, in fact, OPERATING WITHIN THE RULES. Are the rules silly and leave gaping holes? Yes. But that's not the consumer's problem. The consumer took a risk by incurring a hard credit inquiry, new account, and meeting spend. The risk is that their credit profile may be impacted and the bonus may not post, but the risk was not that all miles are forfeited and future flights canceled. That is an overreach.
Lucky, I have been a long time follower. There are quite a few inaccuracies in this post. We all make mistakes but as a blogger, I would have expected some fact checking before publishing. Just a bit surprised, that’s all. You usually hit the mark with your posts but this one is pretty inexcusable.
"I've no doubt got caught up in some things over the years..."
Oh my.
The older I get the more I learn that, for some people, ethical behavior can be a grey area.
These arguments make no sense. From SHUTDOWNBYAA.
"The fake AAdvantage accounts were to generate mailers."
If you are using fake AA accounts to generate mailers then you are violating AA terms.
Then you go on with:
"There are multiple people who do NOT have fake AAdvantage accounts, all they did was buy the mailers from online and apply using them. How are they breaking the terms at all?"
Are you serious? You think buying...
These arguments make no sense. From SHUTDOWNBYAA.
"The fake AAdvantage accounts were to generate mailers."
If you are using fake AA accounts to generate mailers then you are violating AA terms.
Then you go on with:
"There are multiple people who do NOT have fake AAdvantage accounts, all they did was buy the mailers from online and apply using them. How are they breaking the terms at all?"
Are you serious? You think buying a mailer and then applying to get the card is acceptable? Then you claim that person did not do anything wrong? The mailers were obtained via a fake AA account and then SOLD.
Oh my, people getting greedier and more stupid by the minute. I'm glad Ben has some ethics.
@FlyGuy I would agree with your post entirely -- the issue is that nobody here is breaking rules. Zero. Zip. No AA program rules were touched in this hobby, and all contracts with Citi where done in good faith with accurate application information. It's one thing to say fraud will catch up to you. But there's no fraud here. The argument against people who were involved in this is basically an emotional one towards AA...
@FlyGuy I would agree with your post entirely -- the issue is that nobody here is breaking rules. Zero. Zip. No AA program rules were touched in this hobby, and all contracts with Citi where done in good faith with accurate application information. It's one thing to say fraud will catch up to you. But there's no fraud here. The argument against people who were involved in this is basically an emotional one towards AA -- "they probably didn't intend to let you do this, so you must be at fault even though they did".
1.) All the scammers knew what they were doing, and knew that others were paying thousands to buy the miles they were scamming. There are probably one or two truly legitimate bystanders caught up in this, but they ain't the ones writing 'but, but it didn't say nontransferable..."
2.) The armchair lawyers have no idea what they are talking about. Miles aren't even considered your property by the government, thus they can't be taken...
1.) All the scammers knew what they were doing, and knew that others were paying thousands to buy the miles they were scamming. There are probably one or two truly legitimate bystanders caught up in this, but they ain't the ones writing 'but, but it didn't say nontransferable..."
2.) The armchair lawyers have no idea what they are talking about. Miles aren't even considered your property by the government, thus they can't be taken away from you, because they are the company's all along. This is why you are not taxed on points.
3.) I find it very....curious....that Lucky writes this articles and doesn't mention his getting banned for life from United MileagePlus. If part of the terms/settlement was to never discuss it, then fine. But if it is purely embarrassment or something, this would really be the time to talk about how he, too, got kicked out of the program.
@Ben (Lucky) I'm ready to confess, I did it. I'm guilty and completely remorseful. Who do I tell? AA isn't asking anyone for an explanation, a reason, or any communication at all. They haven't replied nor responded to anyone. They've simply taken a draconian sweep across the suspected accounts without a single option to communicate with them in any way. If someone can prove they are 100% innocent, AA isn't giving them the option to...
@Ben (Lucky) I'm ready to confess, I did it. I'm guilty and completely remorseful. Who do I tell? AA isn't asking anyone for an explanation, a reason, or any communication at all. They haven't replied nor responded to anyone. They've simply taken a draconian sweep across the suspected accounts without a single option to communicate with them in any way. If someone can prove they are 100% innocent, AA isn't giving them the option to even try. This raid is being conducted very unprofessionally.
I agree that the people using the mailers this way were wrong to do so, but how sketchy is it of American to have Citi pay them for all of those miles and suddenly just take them all away. Are they gonna start shutting down accounts of anyone who earned too many miles from not flying, because the T&C says they can take your miles anytime they want and you have no recourse and they've already been paid for those miles?
@Jay, RE: "Opening multiple accounts in short periods of time, even if they were legitimate mailers and you didn’t open any AAdvantage accounts in your cousin’s name, is clearly abuse of the AAdvantage Program."
How so? The affected parties legally contracted with Citi to pull their credit for a new account. The new account T&C did not state anything about targeted/transferability of offer, maximum number of credit card accounts, wait time between bonuses, or any...
@Jay, RE: "Opening multiple accounts in short periods of time, even if they were legitimate mailers and you didn’t open any AAdvantage accounts in your cousin’s name, is clearly abuse of the AAdvantage Program."
How so? The affected parties legally contracted with Citi to pull their credit for a new account. The new account T&C did not state anything about targeted/transferability of offer, maximum number of credit card accounts, wait time between bonuses, or any other such language. Applicant received a hard inquiry and new account under their own SSN on their credit file and completed the spend requirements for the bonus.
The simple solution is to have application terms and approval requirements which limit transferability of targeted offers and/or the number of bonuses. Citi didn't implement that. How is that abuse by the affected party? How is the applicant supposed to know where the line is?
@ Dan:
I would love to bet you that there is nothing in the T&C (implied nor explicit) that prohibits the transfer of the offer or that has any other restrictions on the bonus. However, I'm sure once you lost that bet, you would cry "fraud!" and not pay up.
You are right in saying "it's a bit much" to shut down accounts which have used multiple legitimate mailers within the terms of those mailers. Hence why so many are upset.
To all the ethical elitist, keyboard jockeys...
Lots of people who exploited this churn were fully aware of this risk and took it fully aware this could happen. Swing your foam gavel all you want. We aren't a bunch peons who suddenly are gasping in a surprised manner.
I am not mad at AA one bit, outside the poor communication. Just send everyone some clear directions. Snap, snap. Do I like what happened? No. But...
To all the ethical elitist, keyboard jockeys...
Lots of people who exploited this churn were fully aware of this risk and took it fully aware this could happen. Swing your foam gavel all you want. We aren't a bunch peons who suddenly are gasping in a surprised manner.
I am not mad at AA one bit, outside the poor communication. Just send everyone some clear directions. Snap, snap. Do I like what happened? No. But AA can do whatever they want, more or less. It was good while it lasted.
@Jessie R
Where does he say people should be taken to the wood shed?
"As is the case with any “loophole” like this, there are people involved on all kinds of different levels. Some people may have only done this once at a friend’s suggestion, and some people may have signed up a spouse or family member this way, without them even knowing their account was being used in this way.
It seems like American...
@Jessie R
Where does he say people should be taken to the wood shed?
"As is the case with any “loophole” like this, there are people involved on all kinds of different levels. Some people may have only done this once at a friend’s suggestion, and some people may have signed up a spouse or family member this way, without them even knowing their account was being used in this way.
It seems like American is now cracking down on everyone, including closing AAdvantage accounts and canceling tickets issued with them.
Let me say this — I’ve been playing the points game since I was 14. I’ve no doubt got caught up in some things over the years, at least when I was younger. But over the years I’ve learned you’re always best off just playing by the rules. You might get away with stuff in the short term, but in the long term you’ll be “caught” more often than not. And that’s especially true when you scale something to this extent.
If nothing else, all of this is a good reminder of the risks if you do choose to not play by the rules.
So yeah, that’s my take on all of this."
sounds like he's just saying, this entire game is about risk analysis.
To listen to the bootlickers here, AA would be within their rights to shut down the accounts of anyone who purchases a mistake fare on their metal because that's an "exploitative practice." A third party bought a bunch of miles from AA and issued too many of them to users, and AA responded by banning the users, *IN MULTIPLE CASES STRANDING THEM INTERNATIONALLY IN THE MIDDLE OF A TRIP*. This is, again, a worse punishment...
To listen to the bootlickers here, AA would be within their rights to shut down the accounts of anyone who purchases a mistake fare on their metal because that's an "exploitative practice." A third party bought a bunch of miles from AA and issued too many of them to users, and AA responded by banning the users, *IN MULTIPLE CASES STRANDING THEM INTERNATIONALLY IN THE MIDDLE OF A TRIP*. This is, again, a worse punishment than mileage brokers get, where they at least get the chance to plead their case and not have their travel canceled.
@Chris - the same week they did these shutdowns to recapture 10s of millions of points, they also introduced dynamic pricing.
They’re gonna screw you however they can; and if you think the loopholes create the devaluations, you’re putting your head in the ground.
@Chris
Nothin fraudulent about it. Any inflation is due to Citi's ineptitude and AA's addiction to getting cash for miles. It's the only thing keeping the airline afloat.
It’s so funny how the people getting caught are squealing like stuck pigs! Well done AA. All the fraidsters know they were cheating and now they are unhappy because they got caught! Ha ha ha ha :)
Ben
The completely lack of communication AA has been so far towards locked accounts is probably the worst part of its "cleansing".
The section about AA would contact the offenders and if the offenders fessed up, agreed with AA's penalty whatever then get back their accounts does NOT ever happen to the current operation.
People whose accounts are locked, never receive any communication. People whose accounts are being closed, only receive ONE single email that...
Ben
The completely lack of communication AA has been so far towards locked accounts is probably the worst part of its "cleansing".
The section about AA would contact the offenders and if the offenders fessed up, agreed with AA's penalty whatever then get back their accounts does NOT ever happen to the current operation.
People whose accounts are locked, never receive any communication. People whose accounts are being closed, only receive ONE single email that you took from DoC's site. That is the ONLY communication AA has ever done.
Worse, people's award bookings are canceled the day before departure. There are cancellations happened in Mid Trip.
This seems to be very lowball for AA to hand down such harsh treatment.
Seems the major incentive for AA to handle it this way is the huge amount of miles can be wiped out from its balance sheet - with the 4th quarter ending, and the whole year too, AA has been the WORST performing airlines in any financial standard. This write off would boost its number by a big margin. While the gamers are getting caught, please dont paint AA being an ethical corporation with good corporate governance. AA has ZERO of that.
Take a look of AA's new dynamic pricing - that should give those who claim that without the abusers, we the good people would get better award availability... Dream on. They would get a price sticker shock to see a one way Europe award is at 480K miles when the now "artificial" award chart said 55K miles.... LOL.
I'm pretty proud of AA for shutting down these fraudsters. Bravo AA, bravo!
As for lawsuits coming against AA, good luck with that. Even if you win, you'll get pennies. Might be enough for a free beer (domestic, not import) on your next AA flight. Enjoy it.
I'm very happy American is shutting down these people. When millions of miles are issued and redeemed fraudulently, it devalues the miles of everybody else who played by the rules. It's simple economics
@Julie P
You are clearly neither a lawyer nor a securities analyst. Your prediction as to the financial impact on AAL is comical. Have you taken out a large, leveraged short position yet? bought some short dated puts?? lets see how that works out for you
There is a lot of bad information and misunderstanding.
Citi allows one to get a new credit every month or so, up to eleven new cards a year. No fraud here, the bank allows this, it reviews and approves each application.
Citi restricts the bonus for AAdvantage credit cards to once every 48 months. However, now and then they offer credit cards with no such restriction. These non-restrictive offers have popped up many times over...
There is a lot of bad information and misunderstanding.
Citi allows one to get a new credit every month or so, up to eleven new cards a year. No fraud here, the bank allows this, it reviews and approves each application.
Citi restricts the bonus for AAdvantage credit cards to once every 48 months. However, now and then they offer credit cards with no such restriction. These non-restrictive offers have popped up many times over the last few years. Points enthusiasts have taken advantage of this, but no rules were broken, no fraud here.
Over the years, AA has sent me dozens of mailers with offers for AA credit cards. These offers had no restriction on the bonus and no language restricting transferrability of the offer. They were addressed to my children who have since graduated and college and moved on. They are real pople, who are AA members since years and have travelled many times. No rules broken, no fraud here.
Starting in 2019, AA/citi stopped using mailers and switched to email offers. These apparently have restrictions on transferability of the offer. I think most of the miles and points community earned the bulk of their miles with mailers prior to 2019.
The large majority of mailers that were used broke no rules or no laws. Perhaps this was not the intention of AA and citi, but real people responded to offers, applied for credit cards and were approved, put real spending on the cards and earned the bonuses.
In fact, there is speculation, that citi allowed these loopholes on purpose to beef up their numbers of credit cards approved. Citi approved all the credit cards and they know we had them.
There is the misconception, that we are fraudsters or sketchy. We in the miles and points community are just looking for whatever opportunities that the banks and airlines provide us.
Just as banks and airlines make every effort and incentive to make profit from us, we make every effort to get the best deal that we can. caveat emptor.
I say we boycott this blog. He is in the interest of getting money off of people signing up for credit cards. Then he doesn't support the people when they are cheated.
If you want to escalate this crap, good luck. I think AA would have a better case for suing you for damages than vice versa.
Sure you wanna push this?
@Dan - I agree with your statement. However, I wasn’t aware this is how people were getting the codes. I assumed someone had a legit account that intentionally did not apply for the Citi AA card so that the mailers would keep coming! Each time I got a new code, it was often the same name! The whole thing w non transferable or not, I wasn’t even aware of its existence or non existence since all I got was code and last name. But not like it mattered, right?
It's comical to see the justification by people for what they were doing. You got busted. You got caught. Your miles are gone. NO judge or jury is going to feel sorry for you and your miles are gone. So just deal with it.
Maybe, just maybe, there are some boundary cases where the confusion is understandable. Maybe your sister/brother lives with you so you set them up with an account. You then get an offer from Citi (or whoever) with the bonus code. First - even w/o explicit prohibitions on transfer, the offer would've been clearly addressed to your sibling. Seems like something you'd wanna check on before pulling the trigger. Second, while there might not be any...
Maybe, just maybe, there are some boundary cases where the confusion is understandable. Maybe your sister/brother lives with you so you set them up with an account. You then get an offer from Citi (or whoever) with the bonus code. First - even w/o explicit prohibitions on transfer, the offer would've been clearly addressed to your sibling. Seems like something you'd wanna check on before pulling the trigger. Second, while there might not be any clear language in the sales copy against transfer, how much you wanna bet there's something in the boilerplate that makes it clear what you're doing isn't allowed? Has anybody checked that? In this case, the best outcome would be losing the bonus and that's that. If AA is cancelling accounts over small fry like this, it's a bit much.
But I'm wagering they're mostly going after the big fish. 250k miles+ Multiple fake AAdvantage accounts. Etc. And y'all are just butthurt that your con finally came to an end.
You people who are defending the practice are all idiots. Did you read the American terms quoted above?
"A recent investigation has determined your involvement in multiple violations of the General AAdvantage Program Conditions, related to the accrual of ineligible miles and benefits, through fraud, misrepresentation and/or abuse of the AAdvantage Program."
"From the conditions of carriage: Your ticket is not valid when: We find that the ticket was bought using an exploitative practice"
Doesn't...
You people who are defending the practice are all idiots. Did you read the American terms quoted above?
"A recent investigation has determined your involvement in multiple violations of the General AAdvantage Program Conditions, related to the accrual of ineligible miles and benefits, through fraud, misrepresentation and/or abuse of the AAdvantage Program."
"From the conditions of carriage: Your ticket is not valid when: We find that the ticket was bought using an exploitative practice"
Doesn't matter one bit that the Citi offers didn't say "non-transferable" on them. Opening multiple accounts in short periods of time, even if they were legitimate mailers and you didn't open any AAdvantage accounts in your cousin's name, is clearly abuse of the AAdvantage Program. Should American be pissed at Citi? I don't know. They got paid for the miles. But it is 100% within their legal right shutdown these accounts. Period. You accepted the contracts of carriage and terms and conditions of the AAdvantage Program.
I suppose it's entirely possible that innocent people did get caught up in all the shutdowns. But other than those (likely few) people, no one else has a legal leg to stand on.
I applaud AA for taking action. It's like retail theft, the loss for the company results in price hike for every customer. I can't help but wonder if AA devalued their miles based partly on this issue.
Oh, please. Dime store lawyering aside, you are clearly creating an account under false pretenses. At no point did you intend for the new account holder to accumulate miles or use it in a normal fashion. It was clearly created exclusively for the purpose of an improper transfer of a bonus code.
And guess what? They have incredibly broad language that lets the close down accounts for any reason. And they've got a pretty...
Oh, please. Dime store lawyering aside, you are clearly creating an account under false pretenses. At no point did you intend for the new account holder to accumulate miles or use it in a normal fashion. It was clearly created exclusively for the purpose of an improper transfer of a bonus code.
And guess what? They have incredibly broad language that lets the close down accounts for any reason. And they've got a pretty good case for saying that you created the account in bad faith. I'd love to see some dipshit actually lawyer up over this. It'll be fun to watch.
If my account gets shut down you can expect to hear from my lawyer!
@Ben (Lucky) Yes that's correct. People are going to try to dismiss this as people getting what they deserve but it was not against any rules or terms. We received mailers about once a month on average for over a year. Citi either knew about it or was too incompetent to care and AA's response is extreme and unprecedented.
@Kevin Hope you felt better after spamming/rambling four times hah.
We kept receiving mailers and so we kept signing up for cards. If my account gets shut down I will surely take this matter to the courts.
@Dan, there is absolutely nothing "fraudulent" with creating an AA account for someone who who doesn't plan on using the account (for now). Replace AA with a heavily regulated industry like banking. Is it fraud for someone to open a bank account and never fund it or use it? Of course not. Either may be used eventually, and AA has the option to close inactive accounts if they wish just like a bank can. I...
@Dan, there is absolutely nothing "fraudulent" with creating an AA account for someone who who doesn't plan on using the account (for now). Replace AA with a heavily regulated industry like banking. Is it fraud for someone to open a bank account and never fund it or use it? Of course not. Either may be used eventually, and AA has the option to close inactive accounts if they wish just like a bank can. I would bet there is a significant number of AA accounts created with the intention of collecting miles but the person hasn't had a chance to fly AA yet (just as I have many accounts in other FF programs created in case I fly them).
Half of AA corporate security is currently shutdown down accounts, the other half is posting here looking like clowns trying to defend AA’s actions.
@Dan Do any of you people know the definition of fraud, or have investigated it? I have, and all of you sound like anti-vaxxers do to medical professionals.
Found the podcast mentioned. Begins around the 4:59 mark. https://frequentmiler.boardingarea.com/aa-shutdowns-how-we-cause-devaluations-college-credit-cards-and-an-unfortunate-glitch/
So are we saying Brian Kelly (TPG) should be banned from AAdvantage for life for churning and suggesting people use offer codes that weren't provided to them directly by AA?
https://thepointsguy.com/2014/06/getting-my-third-citi-executive-aadvantage-100k-offer/
https://thepointsguy.com/2014/01/amazing-deal-alert-citi-executive-aadvantage-world-mastercard-bonus-up-to-100000-miles/
If you are creating an AAdvantage account for a non-existent person, or for an existent person who doesn't plan on using the account or is never informed of the account, that is fraudulent use of AAdvantage.
I see a lot of you are trying to slither your way into justifying this shit, but it's patently the kind of thing that would get you TOSsed. You knew the risks, you shouldn't whine about the inevitable outcome.
@Ben:
I think the issue with the scenario where P1 got miles "questionably" (we'll leave that argument for later), and booked award tickets for P1 and P2, whilst P2 did not know, shouldn't necessarily result in an immediate deletion of P2's AA account. Even where mileage brokers are in play, I believe historically AA has actually contacted P2 FIRST, asked for info and THEN made a judgement. It seems quite frequently that on FlyerTalk...
@Ben:
I think the issue with the scenario where P1 got miles "questionably" (we'll leave that argument for later), and booked award tickets for P1 and P2, whilst P2 did not know, shouldn't necessarily result in an immediate deletion of P2's AA account. Even where mileage brokers are in play, I believe historically AA has actually contacted P2 FIRST, asked for info and THEN made a judgement. It seems quite frequently that on FlyerTalk we see all the time where someone googles for "cheap first" or "cheap business" tickets and buys something and has no idea it's from a miles broker. And spouses certainly don't tell each other everything (hello divorce court), so it's entirely plausible, IMO, that there's some cases like that. However, AA appears to be doing account terminations first.
I believe there's even a case where someone used mailers (physical) that they received (not multiple AA accounts) multiple times because Citi kept sending them to get multiple Citi Business accounts (no 48-month language,, etc.) and got banned. Although I could've misread that, and of course, everything is taken with a gain of salt.
@Ben (Lucky) As others have stated, you're misinformed when you say that mailers had language stating that they were non-transferable. Only the emailed offers (which have only been around for a couple of months) had such language. Also misinformed that the last name on the offer needed to match. Citi sent out offers to basically anyone and everyone that had an open AA account with no restriction on who could use them - despite having...
@Ben (Lucky) As others have stated, you're misinformed when you say that mailers had language stating that they were non-transferable. Only the emailed offers (which have only been around for a couple of months) had such language. Also misinformed that the last name on the offer needed to match. Citi sent out offers to basically anyone and everyone that had an open AA account with no restriction on who could use them - despite having a process in place to restrict who could use offers (the old 12-digit codes).
There are people who used offers mailed to REAL friends and family to sign themselves up (again, without any restrictive language in the terms) for a few cards and now have their accounts locked. Presumably, some people have their accounts locked and have no idea. The only way to know is if you've called AA (due to having issues booking a ticket or similar), and the frontline rep tells you. Imagine signing up for 3 or 4 AA credit cards in the last two years, using offers mailed to yourself, family, or friends, which have no restrictive language, and then having your holiday-time flight canceled 24 hours prior - with no communication as to why. Because this is happening to people.
I wouldn't be so fast to condemn those who are affected without knowing all the facts.
Lucky you may have to edit parts of your post. Mike is correct. To elaborate, mailers with 9 digit codes were transferable and mailers with 12 digit codes were non transferable. It’s the 9 digit codes that were being used. If the intent of Citi was to truly make the offer non transferable then stop with the 9 digit ones and send out only 12 digit codes.
As someone indicated above, Aa should be...
Lucky you may have to edit parts of your post. Mike is correct. To elaborate, mailers with 9 digit codes were transferable and mailers with 12 digit codes were non transferable. It’s the 9 digit codes that were being used. If the intent of Citi was to truly make the offer non transferable then stop with the 9 digit ones and send out only 12 digit codes.
As someone indicated above, Aa should be going after Citi for such gross oversight (assuming it was unintentional). Doesn’t make much sense to go after the consumer. Besides the bad press, those with AA accounts shut down are now going to fly with competing airlines.
FYI I am not one of the “abusers” and have only applied one biz and one personal AA every 2 years. Just in case you thought my opinion is biased (it isn’t)
Was 4 replies not enough @Kevin? Nothing better to do on a Wednesday afternoon?
Yes... we all get it. You can remove your thumb from your nose now.
@Ben
Thanks for your post. To clarify a couple things:
- As others have pointed out, the *physical* mailers Citi sent out did not have any “non-transferable” language on them. The offers switched to email around June of this year, at which point the non-transferable language was added.
-Do you have it on good authority that AA can see who used codes not intended for them? I would think this would be Citi’s information....
@Ben
Thanks for your post. To clarify a couple things:
- As others have pointed out, the *physical* mailers Citi sent out did not have any “non-transferable” language on them. The offers switched to email around June of this year, at which point the non-transferable language was added.
-Do you have it on good authority that AA can see who used codes not intended for them? I would think this would be Citi’s information. If so, the only thing AA really has to go on is miles bonus accumulation patterns, which I think is why a LOT of legitimate people are getting swept up in this (there are many ways within the “rules” to accumulate several bonuses in a short period, what with all the Barclays biz/personal and various Citi AA products available).
- lastly, while I’m sure there was a lot of rampant abuse, there were also many “legitimate” ways to obtain these mailers- actual family members could receive them, friends, former tenants for those that live in big cities, etc. Is it really outside the rules for a wife to give an offer (which has no exclusive language on it) to her husband to sign up with?
I imagine Citi and AA spoke quite a bit about how to handle this. Banks (financial institutions) have much more regulation in terms of taking adverse actions against consumers via the ECOA. I actually sued Citi under this for a closure and settled quite nicely. The suit was not focused on my behavior, but rather because the way they closed my account violated the law.
AA can basically terminate you at anytime for any reason...
I imagine Citi and AA spoke quite a bit about how to handle this. Banks (financial institutions) have much more regulation in terms of taking adverse actions against consumers via the ECOA. I actually sued Citi under this for a closure and settled quite nicely. The suit was not focused on my behavior, but rather because the way they closed my account violated the law.
AA can basically terminate you at anytime for any reason and doesn't have to offer any process/communication per se. I'll be curious how these folks spin a lawsuit... even if there wasn't fraudulent activity, no consumer has a right to earn miles or be part of AAdvantage. It is merely a privilege... one that AA has every authority/right to take away. As long as it's not discriminatory or in violation of the law, I don't see their adverse actions as something you can fight. Their contract pretty much gives them all the power. But, I am not an attorney.
This is funny. Clearly some people who signed up over and over again know they are exploiting a loophole and knows someday they will get busted and move on to another loophole while others seem mad at AA busting their loophole and trying to explain whatever reasonings they have that the loophole was legit and they shouldn’t be punished for exploiting this loophole. Note to the explainers, move on, I’m sure there are other loopholes...
This is funny. Clearly some people who signed up over and over again know they are exploiting a loophole and knows someday they will get busted and move on to another loophole while others seem mad at AA busting their loophole and trying to explain whatever reasonings they have that the loophole was legit and they shouldn’t be punished for exploiting this loophole. Note to the explainers, move on, I’m sure there are other loopholes you can exploit, no need to “justify” your actions. Anyone with a peon brain can tell what you are doing is not legit. After years of getting freebie miles, yes, you can pay for that holiday trip coming up next week with your hard earn cash. And yes, you can buy that expensive last minute economy ticket to get yourself back home from your holiday. If you do the calculation of all those freebie tickets you have gotten, the money you are about to spend for a ticket or two, isn’t that bad at all. Stop whining and move on.
@BEN
I was locked down for opening 5 SUBS. no mailers. CS rep says there is a note on account, cant book.
1 citi aa, 1 citi biz, 2 barclay personal and biz and a citi checking account.
HOW IS THIS FRAUD?!?!?
Real simple nothing illegal was done and by AA swiping our hard earned miles with real dollars spent is wrong. I will be taking legal action against them. Class action lawsuit seems about whats to come!
Aa should be going after citi for the card. If my account gets shut down, will def be suing.
I plan to sue AA in small claims court if they shut me down.
They may win, but not before I cost them thousands in legal fees and bad PR. Especially since I may have booked award flights that would get voided.
Don't have a strong opinion on this given I don't know all the details. But, @Julie P there is no chance AA is bankrupted from this lol. Even if it is a hundred million miles, and we value them at a generous .02 cents each, that would be $2M in damages. Maybe AA also gets hit with punitive damages which brings it to $8M. AA has a market cap of $12B and in Q1 pulled in $600M+ in profit. Lawsuits about this will have no impact on their bottom line or stock price.
Ben-here's a link to an application from an emailed code. Care to tell me where to find the "non-transferable language?"
https://www.citicards.com/cards/credit/application/flow.action?ID=Invitation&app=NPS&invite=883952814&cmp=EMC~01~170420~CARDSACQ~PartnerEmail~AAPlat~NPS&dtwcopy_tnt
@Mr.Wise:
I find your faith in corporate security disturbing.
@Lucky:
The mailers most definitely did NOT state that they were non-transferable. In fact, they didn't even vaguely imply or allude to that idea
Lucky, as many people have now pointed out, the applications and mailers were transferable and there was no language prohibiting this for many people, please update your post.
As many have also mentioned, people weren't signing up pets and blenders, please update your post about this
And of course, there isn't any buying or selling or miles happening here also, please update that.
Most importantly, there's no notice, no way to contact or fess...
Lucky, as many people have now pointed out, the applications and mailers were transferable and there was no language prohibiting this for many people, please update your post.
As many have also mentioned, people weren't signing up pets and blenders, please update your post about this
And of course, there isn't any buying or selling or miles happening here also, please update that.
Most importantly, there's no notice, no way to contact or fess up or talk to AA at a about this, so just remove that while section.
Your bad and less informed takes are worse due to the eyeballs it gets. Please fix it to be more consumer friendly to people who legitimately got several bonuses as was allowed by Citi
Thanks AA, for busting these cheaters.
@LarryInNYC curious on your bet. Max for small claims court in NYC is $5k. It’s fairly easy for one to just file there. If the figure above of thousands of accounts impacted is accurate, this is going to be a big problem for AA. They aren’t going to send a lawyer to fight each case. Their legal costs would exceed the claimed amount.
Julie P, please! There will not be a massive number of lawsuits and AA will not be bankrupted. I'm pretty sure that corp security has solid reasoning behind what they're doing. Good luck shorting AA.
@Ben (Lucky)
You data is wrong on many points:
-Household members who did not have a Citi AA CC received multiple mailers for years. These had NO language prohibiting transferring.
-AA TOS had no language to even hint that multiple sign up bonuses were verboten - in fact it was advertised strongly to flyers
-Even the new Emailers - while the email said that in one spot in the email, the actually application...
@Ben (Lucky)
You data is wrong on many points:
-Household members who did not have a Citi AA CC received multiple mailers for years. These had NO language prohibiting transferring.
-AA TOS had no language to even hint that multiple sign up bonuses were verboten - in fact it was advertised strongly to flyers
-Even the new Emailers - while the email said that in one spot in the email, the actually application page was Citi and had no language about being non-transferable. These links with application code were routinely shared with family members, elderly, craigslist, local classifieds etc - NOWHERE on the application page did it say it was non-transferable
These individuals entered into a relationship with Citi with no fraud. Used there own SSN and personal info, spent on a Citi card and were rewarded FROM Citi with the miles.
AA is stealing (sure sure about Ginsburg Supreme court case that they can do whatever they want) - big corporation stealing the bonuses awarded by the CC companies.
"If you flew on a ticket obtained with miles that were earned in violation of the program rules (even if someone else’s), then it seems fair to shut down that account as well?"
Lucky, I enjoy your blog, but you continue to repeat this line despite being informed by multiple people that no one (apart from actual mileage brokers -- which is actual fraud) was breaking any AA policy or rule as part of...
"If you flew on a ticket obtained with miles that were earned in violation of the program rules (even if someone else’s), then it seems fair to shut down that account as well?"
Lucky, I enjoy your blog, but you continue to repeat this line despite being informed by multiple people that no one (apart from actual mileage brokers -- which is actual fraud) was breaking any AA policy or rule as part of this activity. They entered into a legal card account contract with Citi, who accepted their application, with accurate and truthful information, and chose to accept the contract which included a miles bonus for early spend. These miles were validly earned through spend, and the miles were provided by Citi as a benefit to the cardholder. Absolutely no AA program rules were breached and absolutely no misrepresentation or fraud was committed.
You often state you are an advocate for the consumer, but the fact you are kowtowing to corporate mental gymnastics as AA looks to clear liabilities off their books is highly disappointing.
I’ve done my fair share of churning over the past couple years in regards to hitting sign-up bonuses, but some of the things I hear from this story really takes it to a level I would feel uncomfortable doing. These people sound like the ones who would manufacture spend like it’s no big deal or submit 100 applications in the span of a month. Can’t really blame them for wanting all the miles, but damn...
I’ve done my fair share of churning over the past couple years in regards to hitting sign-up bonuses, but some of the things I hear from this story really takes it to a level I would feel uncomfortable doing. These people sound like the ones who would manufacture spend like it’s no big deal or submit 100 applications in the span of a month. Can’t really blame them for wanting all the miles, but damn there comes a point where it starts getting sketchy, and that’s where I’ve drawn the line.
The saying definitely holds true here: “pigs get fat, hogs get slaughtered”.
Idk, id like to know what kind of “exploitation” and “fraud” this blogger and others take advantage of, but don’t write about to save their precious affiliate links... or surely you’re all angels with 1 credit card?
As mentioned above, Citi has sent out both transferrable and non-transferrable mailers for years. If it was a big issue, why didn't AA have them just send out the non-transferrable one? This makes no sense. Also a long-time reader, but very disappointed in your take on this.
@Lucky: "What motivation would Citi have to “goose the signup numbers?”
Wells Fargo gave significant motivation in terms of bonuses to front-line employees who created additional accounts for customers without their authorization. It's very possible that someone inside Citi authorized loopholes like these where they were able, which ended up causing a nice boost to their numbers and their bonus.
There's a certain paid Facebook group that made this method extremely popular then bragging about it. I've left that group a while ago. I wonder what they're talking about now.
@Julie P
On that note, there is going to be massive lawsuits against AA coming out of this.
Assuming we can come up with reasonable definitions of "massive" and "coming out of this", I would be happy to put money on there not being massive lawsuits coming out of this. @Lucky could hold the money for six months.
Should I assume that you yourself have already initiated legal action against AA?
Lucky- The word "fraud" is a bit heavy handed. "Exploitative" would be more appropriate.
Additionally, I think most people who are locked or shutdown realized this day would come.
Though most suspected it would come from Citi, as it coming from the vendor is unprecedented. It would be like signing up for an AMEX Delta Biz Plat, Biz Gold, personal Plat, Personal gold and then getting a NLL mailer in the mail (from AMEX)...
Lucky- The word "fraud" is a bit heavy handed. "Exploitative" would be more appropriate.
Additionally, I think most people who are locked or shutdown realized this day would come.
Though most suspected it would come from Citi, as it coming from the vendor is unprecedented. It would be like signing up for an AMEX Delta Biz Plat, Biz Gold, personal Plat, Personal gold and then getting a NLL mailer in the mail (from AMEX) for another Personal gold. Then, after signing up for it, getting shut down by... DELTA. Huh? AMEX, we understand. Delta? That's where it would be weird. Hence our bewilderment why it's AA that's doing the closures and not Citi.
Citi has now collected a $95 Annual Fee, purchased the points from AA, and then AA has decided to take back the points. So Citi gets $95, but pays $X for 60k points, so they lose a little. AA; on the other hand, sells the points and takes the money from Citi and then makes the points they sold entirely useless. That's a bit messed up for AA to do, if not to us, to Citi.
To dissect this further; AA is cancelling, without warning, flights of these suspected "fraud" people. Could you imagine being cancelled by Delta mid-trip and having no return home because you applied for an AMEX NLL Gold Mailer? Does that sound unreasonable? Then so should this. Again, take the points. We got caught.
It's simply weird and odd how it all came to fruition; and the fact Citi is involved (or not) somehow, certainly makes this a juicy story. But let's please have some sympathy for people who are getting flights cancelled who got caught up in something that is entirely unprecedented. And let's have a smidge of disdain to AA for doing this, merely 24 hrs before holiday/family flights with no communication. In the meantime, hundreds (thousands) of others are sitting in limbo with "locked" accounts who have no idea if they are going to be able to visit relatives. And I repeat, as I have ad nauseam, this is done with no precedent. Had a precedent been set, by all means, relish in the "fraud". But posters who take glee in this have something wrong with them.
correction to the statement above ".... superior offers (higher signup bonuses) existed, one could argue that is not the most moral....."
@lucky the scenario is that p1 used mailers to get miles, and booked a flight for them and p2, who lives at the same address. both p1 and p2 had their accounts locked.
@ cam -- I'm not sure I see the problem with that? If you flew on a ticket obtained with miles that were earned in violation of the program rules (even if someone else's), then it seems fair to shut down that account as well? After all, that's the leverage American has. It's no different than if you were to buy a ticket on a flight from a mileage broker, American could also close down your AAdvantage account, no?
As a reader of your blog for years I'm disappointed in you portraying the situation this way. I never signed any "pets/kitchen blenders/basement rats/distant cousins" up for accounts and only used mailers my partner and I received over the last couple years. None of them had any non-transferable language nor did the application. Citi kept sending them on a consistent basis. I'm sure most people who are caught up in this are in similar situations....
As a reader of your blog for years I'm disappointed in you portraying the situation this way. I never signed any "pets/kitchen blenders/basement rats/distant cousins" up for accounts and only used mailers my partner and I received over the last couple years. None of them had any non-transferable language nor did the application. Citi kept sending them on a consistent basis. I'm sure most people who are caught up in this are in similar situations. Just because a few people abused things doesn't mean people who had more than 1-2 signup bonuses did anything wrong or even unethical.
What is wrong is AA suddenly discovering this then closing people's accounts without notice (or any communication beyond that form letter) as well as canceling their existing flights/hotel reservations. Many of them were for travel during this holiday season with such short notice it isn't possibly to book alternate travel plans without huge expenditure.
@ Chris -- I've been asked my take, and I'm sharing that based on having only recently heard about all of this. So if I don't have all the information, I'm more than happy to evolve my opinion on this. So you're saying you and your partner had a total of two AAdvantage accounts, and you kept receiving mailers to those accounts, and you used those mailers to sign up for Citi accounts connected to...
@ Chris -- I've been asked my take, and I'm sharing that based on having only recently heard about all of this. So if I don't have all the information, I'm more than happy to evolve my opinion on this. So you're saying you and your partner had a total of two AAdvantage accounts, and you kept receiving mailers to those accounts, and you used those mailers to sign up for Citi accounts connected to the AAdvantage accounts stated on the mailers? And your accounts were shut down? If that's the case, that's of course a completely different story than what I've otherwise thought was going on...
Lucky, there are some points I would like to clarify as I think it might impact your viewpoint on this. It is not stated anywhere on the mailer, the application, or during the application process that the offer was non-transferrable. Why there is some confusion on this point is because recently, Citi did away with the mailers and instead, sent these offers via emailers. And only within the emailers did it say the offer is...
Lucky, there are some points I would like to clarify as I think it might impact your viewpoint on this. It is not stated anywhere on the mailer, the application, or during the application process that the offer was non-transferrable. Why there is some confusion on this point is because recently, Citi did away with the mailers and instead, sent these offers via emailers. And only within the emailers did it say the offer is non transferrable. It is not mentioned on the application itself (terms and conditions) nor during the application process. Within those who are impacted, there are those who never touched the emailers. Why this point is important – there are many applicants who obtained the invite codes through channels (forums, chats, etc.) where all that was provided was the link to the application and the code. The existence of the non-transferrable clause, which was present only on emailers, was never presented to the applicant.
There is a difference between ethics and legality. Agreed - it was ethically incorrect to keep applying for the same offer over and over for the signup bonus. However, nothing done was illegal. Might be worthwhile for you to listen to Frequent Miler’s most recent podcast. He nails it when he states his surprise that AA went after the consumer when in fact, AA should be going after Citi for failure to protect AA’s assets (the miles and the program).
On that note, there is going to be massive lawsuits against AA coming out of this. If there is a time to short AA, this would be it. Closing down all these accounts without a legal basis is going to be an easy win for the consumer. Again, I am not arguing the ethics point of view. I hope you of all people would appreciate this – as a blogger who posts about affiliate credit card offers knowing that superior offers (high signup bonuses) exited, one could argue is not the most moral thing to do. But I get it from your perspective, gotta pay the bills so push the ones that get you paid. From a legal perspective, AA doesn’t stand a chance. This isn’t even considering the fact that AA canceled award flights for many, leaving them stranded in another country. Denied boardings, no award cancellation notifications. You name it, AA has done it.
This is thousands of accounts (real accounts and not pet name accounts) that are current locked up. It is not tens of millions of miles. This is more in the tune of hundreds of millions of miles… Closing down these accounts is a massive wipe on their liabilities which is going to be a big PnL gain for AA, but I don’t think they have fully considered all the lawsuits that will come out of this – this will unfortunately bankrupt them…
@ScubaSteve
I implore you to scan betwixt the bands of my banter and benefit for yourself enhanced lucidity regarding the applicability of my missive towards that of the initial composer, most especially in light of two of the written charges that were heretofore set against them.
@Bill - Not sure how it can be considered "open more credit cards than were allowed" when Citi isn't closing any of the credit card accounts, in fact there is no action from Citi other than still sending out email mailers as of yesterday.
I fully endorse this shutdown. People have long deserved it, I don't know what they expected by applying for the cards at full speed at max velocity. A bunch of fraudsters ruining it for the rest of us who only hold one or two credit cards.
Fraudulent activity merits such account closures. Those gamers who played Russian roulette by trying to fraudulently open more credit card accounts than they were allowed now are getting their due.
No story here. Just many entitled people getting their due because they got caught...and can't admit their own entitlement.
Let's refer all the whiners to the college admissions scandal where people also gamed the system by lying and misrepresentation (i.e. fraud). And now...
Fraudulent activity merits such account closures. Those gamers who played Russian roulette by trying to fraudulently open more credit card accounts than they were allowed now are getting their due.
No story here. Just many entitled people getting their due because they got caught...and can't admit their own entitlement.
Let's refer all the whiners to the college admissions scandal where people also gamed the system by lying and misrepresentation (i.e. fraud). And now many of those are going to prison. So it could be worse.
Karma is beautiful.
Yeah, the rationalizations are hilarious. Kind of similar to the old parent/kid thing where the parent says "Be home by 10pm" and the kid thinks he's smart and gets home by 10 pm and then goes out again and thinks he is in the clear.
I only wish they would crack down harder on the abusers, they are simply freeloaders costing everyone money.
@Lucky, you are aware that AA shut down accounts from people who lived in the same household and flew on points with the person who got the mailers, right? And again, they are cancelling upcoming award travel, or return legs for international flights, with 0 notice. This is worse than what happens to the mileage brokers who legitimately cost AA money.
@ cam -- Hmmm, so you're saying they shut down accounts of people living at the same address who didn't receive any mailers, and the points used were from a separate "legitimate" account? And they just happened to be on the same flight? Are there any data points of people from the same address who didn't receive any mailers and weren't involved and were traveling on a different flight getting shut down?
No sympathy at all for those who got shut down. You know what you did.
Hope you get a lifetime ban.
Would like some answers as to:
1) AA was sending emails for new signups, why was there a code at all - if they were new users, the 48 month language could be there and they would still be approved.
2) Why was Citi sending out 9 digit codes and not 12 digit codes, which cannot be changed.
3) Why does Citi even have 9 digit codes at all - 12 digit...
Would like some answers as to:
1) AA was sending emails for new signups, why was there a code at all - if they were new users, the 48 month language could be there and they would still be approved.
2) Why was Citi sending out 9 digit codes and not 12 digit codes, which cannot be changed.
3) Why does Citi even have 9 digit codes at all - 12 digit codes would do the trick and eliminate any of this in the first place.
4) Citi sees how many AA cards you have, but are still approving you.
Many years ago Citi could have either hardcoded the names/FF numbers in the same way Amex does, or just send out 12 digit codes, and that would have been the end of this. This as been going on in one form or another for over 10 years and Citi has done nothing to stop it or indicate that they even care at all.
@Uncivil_Engineer
Supporting airlines for banning skiplagging is such a bootlicker response. The corporations have you right in the palms of their hands
@Kevin and everyone else.
Can you stop with the word fraud being thrown around? There was no fraud taking place. Exploitation and abuse? sure, fine. but fraud wasn't present.
Citi bought the miles from AA. Citi gives the miles as a bonus to their credit card customers. AA noticed some customers receive multiple bonus and shut them down. These customers were approved by citi to receive bonus. It’s not AA place to shut them down.
..... and any who abuse the rules
The new emailers that started this year state non-transferrable. The old physical mailers did not.
A big thumbs up to AA for shutting fraudulent members and any whoa use the rules.
Lucky, the paper mailers most people were using from 2015 - ~June 2019 did not have non-transferrable language on them. After that point the emailers did, though nowhere on the actual application materials.
Ben,
Your insider info was incorrect on a few things. The fake AAdvantage accounts were to generate mailers. The mailers did NOT have limiting language, and did NOT have non-transferable language. The information in the credit card application the mailers pulled up was freely editable, and all credit cards were approved for the real person, with the real AAdvantage account to credit the miles to.
Very few people that have been shut down in...
Ben,
Your insider info was incorrect on a few things. The fake AAdvantage accounts were to generate mailers. The mailers did NOT have limiting language, and did NOT have non-transferable language. The information in the credit card application the mailers pulled up was freely editable, and all credit cards were approved for the real person, with the real AAdvantage account to credit the miles to.
Very few people that have been shut down in this action were selling miles.
There are multiple people who do NOT have fake AAdvantage accounts, all they did was buy the mailers from online and apply using them. How are they breaking the terms at all? The mailers were transferable.
I think we can all agree it is a grey area. However, no terms were violated, as the credit card accounts were real, and the person who applied was real. Citi deemed then eligible for the bonus and paid it.
AA has now essentially been paid by Citi for the miles, and not delivered a product. Citi should be very upset. AA should also be upset with Citi for allowing this practice to continue, essentially implying it was OK. At one time, Citi did have non-transferable offers, but they stopped using them, and switched back to the transferable ones.
The biggest issue here is the lack of communication from AA. There has been none. No warning about flight cancelations, and also, no chance to appeal their decision. Your section of your article assumed there was a way to contact AA about this. They have NOT provided one. They have actively stranded people mid-trip, and provided no explanation as to why. There are hundreds, or thousands, with locked accounts, that have not been informed why they were locked.
Finally, your lack of knowledge on this matter is telling. This has been going on in one form or another for over 10 years. For a travel and credit card blogger to not know about this is telling about your commitment to your craft. I can understand not sharing the info publicly, but having no idea about it is not a good look for you.
I was on the train. Last 4 years, probably earned about 1.5M miles between me and my spouse. I knew eventually this wouldn't last. I knew the traain would stop.
It's all part of the game.
"Know when to hold them, know when to fold them. Know when to walk away and know when to run."
@Ben
The e-mailers that have been out since June? All said non-transferable on the e-mail.
I have to admit to a grudging admiration for the people who are able to invent (and apparently believe) self-serving arguments for why their fraud is someone else's fault. At the same time, it doesn't exactly fill one with hope for one's fellow man.
"Look, people can try to convince themselves of whatever they’d like. The mailers clearly stated that the codes were non-transferable. If you choose to ignore that, you can’t blame Citi in turn."
This is actually incorrect. The mailers did not mention anything of such sort.
@ Ben -- Where did it mention that the offers were non-transferable?
This is an absolutely incorrect representation for many people who have been shutdown. There are reports of spouses and partners of credit card churners shut down who never even got a single card.ctu
Plus, the vast majority of people were NOT creating pet or blender accounts. Citi and AA proactively was sending promotional mailers to their parents, siblings etc (either at the same or some other household). Sharing a promotional offer with your family member...
This is an absolutely incorrect representation for many people who have been shutdown. There are reports of spouses and partners of credit card churners shut down who never even got a single card.ctu
Plus, the vast majority of people were NOT creating pet or blender accounts. Citi and AA proactively was sending promotional mailers to their parents, siblings etc (either at the same or some other household). Sharing a promotional offer with your family member isn't such a big offense (if at all, given that Citi expressly allowed transferability within their terms and conditions) that accounts are shut and tickets cancelled.
On top of this, claiming that corporate security knows what they're doing in this case is ludicrous given that they haven't made any attempt at contacting to get the other side of the story at all. We have terms and conditions from Citi allowing the bonuses, there's no consideration for that at all.
@Lucky, you obviously log in your fathers account and manage it for him - that actually is technically against the rules. Should your account be shut down for logging into his account?
"Essentially this has allowed people to get two Citi AAdvantage cards every 65 days. It’s my understanding that some people earned millions of miles using this method, "
This is the kind of stuff you should be pushing Lucky.
As long as you spend it ASAP, everybody wins!
I feel the same way about Hyatt's Mlife-WOH match situation. They're letting people do it, but if one day Hyatt corporate cancels your account because they determined the status match is not within the spirit of what they want you to do, and you lose hundreds of thousands of chase points transferred into it, all so you can have 2 extra hours of late checkout and 20% more points? Not worth the scare.
How do you claim AA is "perfectly within their rights... " to shutdown people who "used codes not intended for the people listed on the mailers" when the facts are that: the terms and conditions did not state they were targeted or non-transferable, Citi approved the application, and Citi deposited the miles in the AA account?
Sounds like AA should be mad at Citi.
@ MrDioji -- Look, people can try to convince themselves of whatever they'd like. The mailers clearly stated that the codes were non-transferable. If you choose to ignore that, you can't blame Citi in turn.
Very interesting story. I can’t believe people think they can get away with stuff like this.
AA/Citi have had targeted mailers that the entire time that actually could not be transferred (can’t change the name). However, during the same overlapping period, they continued to send targeted mailers that could be transferred (name changed) even if they said they are non-transferable. Why would they issue mailers with these two different methods if they didn’t actually want the sign-ups? They clearly had the ability to keep them all from being transferable in reality....
AA/Citi have had targeted mailers that the entire time that actually could not be transferred (can’t change the name). However, during the same overlapping period, they continued to send targeted mailers that could be transferred (name changed) even if they said they are non-transferable. Why would they issue mailers with these two different methods if they didn’t actually want the sign-ups? They clearly had the ability to keep them all from being transferable in reality. It seems that someone was trying to goose the signup numbers and someone else caught wind and decided to have it ended. This was going on for years and a number of people involved were in on it.
@ Maximus21 -- As I said above, I have no understanding of the exact inner workings of this agreement, but for virtually any co-brand credit card agreement, the bank is paying cash and buying a certain number of miles. What motivation would Citi have to "goose the signup numbers?"
I totally agree it makes no sense that this was possible for so long, but I think suggesting they had nefarious intentions when in reality...
@ Maximus21 -- As I said above, I have no understanding of the exact inner workings of this agreement, but for virtually any co-brand credit card agreement, the bank is paying cash and buying a certain number of miles. What motivation would Citi have to "goose the signup numbers?"
I totally agree it makes no sense that this was possible for so long, but I think suggesting they had nefarious intentions when in reality I suspect they just didn't have very good oversight.
Lets not ignore Citi's role in this. They actively approved multiple accounts based on legitimate SSN and names. Seems to me that Citi was skirting around their rules with American as far as sign up bonuses to pad their numbers over the years. Now American comes in and closes/locks the mileage accounts with no communication, but not a whimper from Citi. Citi isn't even closing the actual cards.
@ Jon -- I don't have any knowledge of the inside workings here, though it's my understanding that Citi was largely paying for those miles that were being awarded for this. I absolutely don't think this was in their best interest, or that they were trying to pad anything.
These sort of shenanigans... mailer credit card application fraud, skiplagging flights, abusing flight credit vouchers given out by airlines... it makes it more expensive for Joe Schmoe to fly with his family.
Kudos to AA for rooting out this problem.
Theres been Citi/AA loopholes for the last 10 years. Plenty of people have taken advantage of it. Now all of sudden AA wants to do something about it. While its Citi really at fault for leaving it open.
My favorite part of all the reddit threads/online forums is watching the fraudsters rationalize how their actions are on the up and up and how Citi is 100% in the wrong. Getting away with something for 18 months doesn't make it less against the terms and conditions.
@Ben - You seem to have some poor information with regards to your source. The applications that pulled up could be edited without restriction (last names/FF#/address could all be freely changed. The application itself also did not mention non-transferable, only the email with the link to the application. Just want to clarify any misinformation to clearly represent what actually happened.
I don't blame AA for shutting down the people who have been hitting this loophole hard, but I have to laugh at this statement from the AA emails:
"Fraud, misrepresentation, abuse or violation of applicable rules (including, but not limited to, American or American Eagle® conditions of carriage, tariffs and AAdvantage® program rules) is subject to administrative and/or legal action by appropriate governmental authorities and American Airlines."
Google "[airline name] contract of carriage" for...
I don't blame AA for shutting down the people who have been hitting this loophole hard, but I have to laugh at this statement from the AA emails:
"Fraud, misrepresentation, abuse or violation of applicable rules (including, but not limited to, American or American Eagle® conditions of carriage, tariffs and AAdvantage® program rules) is subject to administrative and/or legal action by appropriate governmental authorities and American Airlines."
Google "[airline name] contract of carriage" for pretty much any US airline, even Spirit, and you will easily find the entire document hosted on their website, typically as a PDF with a listed version date.
Not AA! AA has a "conditions of carriage" page which links separately to a bunch of informational topics. Good luck finding the actual full contract of carriage document though. In fact, the link on this page titled "Contract details" says:
"We provided links to our website for additional information, however the content displayed on those links are not part of this contract."
So yes, absolutely no sympathy on my part for people who flagrantly violate the AA rules. However, shame shame shame on AA for not posting those rules in an easily located single document like all their peers do.
LAXJeff - I believe Ben means the fraud is the "sketchiness"
Bravo AA! These fraudsters are ruining these programs for the rest of us!
@ Ben -- AA's actions are certainly justified if people are opening credit card accounts under fake names. That is actually a crime, and it's called bank fraud.
@ Gene -- Only AAdvantage accounts were opened in fake names (to generate mailers), not credit cards.
What I don't get is how on earth is Citi approving accounts for "pets/kitchen blenders/basement rats"?
Presumbly all the "people" getting accounts have to exists, have a SSN, etc., right?
@ Daniel -- The credit cards were always open in the name of the actual human/"real" AAdvantage member. The point was that new AAdvantage accounts were created for imaginary people, in order to generate more mailers with codes, and then those codes could be used for an actual AAdvantage account as long as the last name was the same (it wasn't supposed to be that way, as the mailers specifically said that the codes were only for the person named within).
There is no sketchiness for AA to shutdown accounts of users actively engaging in fraud.
The mailer codes from Citi have been blatantly abused, sold, etc. AA should have figured this out a lot sooner so that miles earned properly can be utilized v people who are abusing the system and rules in place.
@ LAXJeff -- Correct, as JL100 pointed out, I was referring to the sketchiness being what people were doing with mailers, not American shutting down accounts. They're justified in that.