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.
— Todd (@TheRealYG17) December 18, 2019
— Chas Lutz (@chaslutz) December 18, 2019
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.
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?