I read Department of Transportation filings for fun, because I’m weird (and what’s covered in them is often relevant to what I write about, but I’m still weird). 😉
Anyway, if you’re not someone who usually reads this stuff, you need to make an exception. American Airlines has responded to a customer complaint filed with the Department of Transportation, and I’ve never seen anything like this before.
In this post:
Many AAdvantage accounts have been shut down
First a bit of background. Late last year American Airlines shut down quite a few AAdvantage frequent flyer accounts. This involved people signing up for an excessive number of Citi credit cards.
There were a few methods at play here:
- Citi was sending out credit card offers with better terms to new AAdvantage members, so some people signed up for multiple new accounts
- Those offers could be used by other people, so many people were opening up multiple Citi cards
- This was a pretty widespread scheme, so not everyone can be bunched together here; I do believe some people legitimately got “caught up” in this, while others knew exactly what they were doing
American had finally cracked down on this on a widespread basis, and many people weren’t happy.
Consumers can file complaints with the DOT
If you file a complaint directly with an airline and aren’t pleased with the response, one option is to file a Department of Transportation complaint against the airline. What’s the benefit of that?
- The number of DOT complaints filed against an airline is recorded, and airlines want to keep the number down
- The DOT gives airline representatives the chance to provide their side of the story regarding the issue, before any decision is made
Usually filing a DOT complaint can be highly effective. Well, there are limits to this, as was proven with how American Airlines responded to a complaint yesterday.
The most amazing DOT airline response ever
Someone who had their AAdvantage account shut down over the above issue decided to file a DOT complaint. You might assume the airline either wouldn’t respond, or would provide a canned response. Truthfully that’s how most DOT complaints are addressed.
Nope, American Airlines responded in a 53-page document that exposes every little thing this person has done. I’ll get into more details below, but the biggest takeaways are:
- Clearly American Airlines is trying to set an example here, because this will likely be enough to prevent others from filing similar complaints
- Many people don’t realize just how much airlines know about you, from how often you’ve called, to how you’ve used their website
- Someone is really, really having fun with writing this response
It’s almost hard to quote specific parts of this filing, because the whole thing is pure gold.
First of all, this is the most colorfully written DOT response I’ve ever read. Usually these filings contain boring technical language, but that’s not the case here:
- “Unhappy that American detected and put the kibosh on the scheme…”
- “The masterminds behind this scheme appear to be the Complainant’s son-in-law and daughter, i.e., her co-fraudsters…”
- “Like a game of whack-a-mole, the son-in-law thereafter opened yet another AAdvantage account…”
- “American maintains that the Complainant or her co-fraudsters, sensing the jig was up…”
Here’s American Airlines’ version of what happened:
- A mother, daughter, and son-in-law created several bogus frequent flyer accounts; the three of them had a total of 16 AAdvantage accounts, not including five additional accounts for the same address under different names
- The three of them had signed up for 45 Citi AAdvantage credit cards over a four year period, earning 1.4 million miles; this doesn’t include the nine Citi cards opened at the same address under different names
- American Airlines caught on and froze all the accounts of the daughter and son-in-law
- Shortly thereafter, all of the miles were redeemed out of the mother’s account, with the passengers for the tickets being the daughter and son-in-law
- Mysteriously, the next month, a letter was sent to American requesting that the mother’s frequent flyer account be closed due to a “security concern”
- At that point there was a schedule change on the ticket for which miles had been redeemed; in order to avoid detection, they created a new frequent flyer account and repeatedly tried to get the miles from the ticket deposited into a different AAdvantage account
- Unhappy they couldn’t get the miles refunded, they filed a DOT complaint
Bottom line
American Airlines’ response to the DOT in regards to this customer complaint is unlike anything I’ve seen. While no doubt some people just got caught up in the Citi AAdvantage situation, it’s pretty clear that the people who filed the complaint knew exactly what they were doing.
Reading this, my biggest takeaway is that I feel like the person named in the complaint may not have been involved at all, or at a minimum wasn’t the mastermind? It almost sounds to me like the daughter and son-in-law were the people behind this, and they just did everything on behalf of the mother. At least everything points towards that.
What do you make of American’s response to this DOT complaint?
This shouldn’t be shocking to anyone. Note the co-signatory on the first page; the person signing the complaint; and the person making the affidavit/affirmation of service are all one and the same - Jonathan Foglia of a third-party law firm that AA subcontracts with.
Clearly, Foglia saw an opportunity to bill their client a ton of hours in writing this obsequious complaint. Not surprising at all when you bill hourly.
The only thing that’s shocking...
This shouldn’t be shocking to anyone. Note the co-signatory on the first page; the person signing the complaint; and the person making the affidavit/affirmation of service are all one and the same - Jonathan Foglia of a third-party law firm that AA subcontracts with.
Clearly, Foglia saw an opportunity to bill their client a ton of hours in writing this obsequious complaint. Not surprising at all when you bill hourly.
The only thing that’s shocking is that AA’s corporate “austerity” hasn’t kicked in yet to cut the budget to many of these third party subcontractors that have bloated corporate budgets.
It always astounds me how many people would rather live scam to scam, rather than live legally, and the Energy & Resources they expend on each scam could easily cure cancer by now. While I should root for the underdog, I know they simply are driving up the costs of things for people like myself and would happily ship them to Gitmo for vacation.
Certain groups/communities excel in the creation of scams, especially in the Medicare/Medicaid verticals.
Do AA still shut down accounts?
Not sure how you can apply for a credit card in a fake name because it needs a social security number etc
But I would have thought the credit card company would have limits for the same person applying for the same card again.
Unfortunately people like this make it more difficult for those of us who are legitimately trying to make a return for expenses and experiences we will have anyway
I had my account cancelled and miles repossessed after using only one account for the Citi vouchers. This should have been a Citi issue to resolve, and AA basically stole back both the points I gained from vouchers and also the points from flying.
Please enlighten me as to how using fake names and addresses is a loophole. Sounds like straight out fraud. And let’s not conflate refunds on tickets during Covid 19 with this story. Two issues. I agree they haven’t made good there but nothing to do with this case.
@J Even Judge Judy would not have ruled in their favor.
So they sell the miles to the cc company and then say forget about it? Do you know that last years AA flew people at cost and made their profits from luggage and cc miles sale? AA is in the business of charging for luggage and selling miles. Flying people is a side business. That's why they are going BK. I laugh when I read financial sites forecast how AA will not go BK. And...
So they sell the miles to the cc company and then say forget about it? Do you know that last years AA flew people at cost and made their profits from luggage and cc miles sale? AA is in the business of charging for luggage and selling miles. Flying people is a side business. That's why they are going BK. I laugh when I read financial sites forecast how AA will not go BK. And now they are upsetting customers removing their miles? This while they continue to refurbish the 737, invest 500 million in new ticket counter software, etc Alaska is looking to step in on just another AA bk . But please clean up the house , the cancer will not go away.
i'm not here to rehash the debates we had about the AA account shutdowns late last year but i do want to remind everyone to this:
while Citi is the issuer, AA's Doug Parker happily boasted year after year on how his airline was the credit card leader in the business - nobody could come close to how many AA credit card members they had and miles sold. that seems like an easy defense against...
i'm not here to rehash the debates we had about the AA account shutdowns late last year but i do want to remind everyone to this:
while Citi is the issuer, AA's Doug Parker happily boasted year after year on how his airline was the credit card leader in the business - nobody could come close to how many AA credit card members they had and miles sold. that seems like an easy defense against AA.
they knew it was happening, allowed it to so their mileage program could cover the yearly losses of actually selling air flight to passengers and then bragging about it at the earnings calls to raise share prices.
OK, I am convinced the son is the fraudster and the daughter happily jumped on board dreaming of vacationing in the South of France. The poor Mom probably never even got a trip out of the deal and didn't know what happened.
That said, Citi is the Mastermind as they wrote the rules for these flawed promotions that benefit only the newest customers and take existing cardmembers for granted. Further, Citi approved the 45 cards,...
OK, I am convinced the son is the fraudster and the daughter happily jumped on board dreaming of vacationing in the South of France. The poor Mom probably never even got a trip out of the deal and didn't know what happened.
That said, Citi is the Mastermind as they wrote the rules for these flawed promotions that benefit only the newest customers and take existing cardmembers for granted. Further, Citi approved the 45 cards, not AA.
Also, Citi paid AA for the miles up front and AA sure needed the cash. It seems if there is any adjustment to be made, Citi should get a refund from AA for the confiscated 1,500,000 plus miles they bought which will go unused.
AA 1
Fraudsters 0
People like to point out that AA did not include favorable/complete statements in their response. THEY DON'T HAVE TO! It is up to the fraudsters to do that.
Anyone defending these fraudsters is likely to be abusers who also got their accounts closed.
@Lucky - despite several of the folks closed account holders telling folks to lodge complaints, very few did. And so far, there are no verified lawsuits against AA.
sounds like a Class Action on the grounds of AA knew all along and allowed it to reap the profits on selling miles to Citi and then getting rid-off the miles all at once!!!
There can artists got caught And good for AA!!
Personally I hope any of you that try to game the system w multiple cards, gift card purchases to max multipliers on “groceries” Or other schemes hopefully have your accounts shit down and loss EVERYTHING! Points and miles were intended to be a reward, within reason, for purchases on the card and not to be “maximized” or otherwise abused.
People that do so are nothing short of criminals and deserve whatever they get!!!
@Gary Leff
Yes AA will still win but their arguments are very absurd.
The most absurd thing is how AA uses Reddit and FT as an exhibit.
Just the names they choose from Reddit made laugh so hard.
Then there is the screen capture from iPhone on T-Mobile at 10:58PM. Very unprofessional to submit things like this to DOT and yet they work so hard and very late!!!!!!!!!
AA cherry picked one case and claimed him/her to be a 'fraudster' then used it as the justification for closing thousands of accounts. Can anyone from DOT see the flawed logic here and do something for the customers?
No one opened a credit card account under a false name. (They did open AAdvantage accounts. This is not forbidden by AAdvantage terms.)
Their dealings were with Citi, not AA.
This document is a road map to how to file a successful DoT complaint.
Multiple accounts, fake names, 45 signup bonuses over a two year period and closing accounts to avoid detection is not taking advantage of a loophole. Im surprised 45 signup bonuses were only worth 1.4 million miles. It seems like it could be twice that much. In any event, I’m glad I won’t be sitting next to one of these AA “customers” on my next flight. I find it comical that they filed a DoT complaint,...
Multiple accounts, fake names, 45 signup bonuses over a two year period and closing accounts to avoid detection is not taking advantage of a loophole. Im surprised 45 signup bonuses were only worth 1.4 million miles. It seems like it could be twice that much. In any event, I’m glad I won’t be sitting next to one of these AA “customers” on my next flight. I find it comical that they filed a DoT complaint, comparable to a drug dealer calling the cops when his weed is stolen! Good riddance, losers!
@John This is absolutely priveleged against defamation as it is a filing in a formal Federal proceeding. You literally can say anything in a filing or response to a lawsuit or administrative proceeding like this and it can never be held as defamation. However, if you say the exact same thing in a hallway on the way out of the proceeding, you are SOL. This is why you never talk to a reporter about a...
@John This is absolutely priveleged against defamation as it is a filing in a formal Federal proceeding. You literally can say anything in a filing or response to a lawsuit or administrative proceeding like this and it can never be held as defamation. However, if you say the exact same thing in a hallway on the way out of the proceeding, you are SOL. This is why you never talk to a reporter about a case until after you win, and never under any circumstances say anything to a reporter if you lose.
Airlines screw customers and make millions every year, not to mention all the bailout cash they got because of this pandemic only to reneg on multiple requirements they were supposed to uphold in their CARES Act terms, but when customers game the system to their advantage, it’s fraud
I still see this as AA getting pretty pissy about Citi sending out loose offerings. I'm sure Citi had pretty specific guidelines from AA as to what they could and could not offer. Ultimately, Citi buys the miles from AA to pay the SUB so the cost is borne by Citi, but if the volume is significant, are these gamers ultimately devaluing the whole program? You're not hearing about these issues arising from Barclays AA...
I still see this as AA getting pretty pissy about Citi sending out loose offerings. I'm sure Citi had pretty specific guidelines from AA as to what they could and could not offer. Ultimately, Citi buys the miles from AA to pay the SUB so the cost is borne by Citi, but if the volume is significant, are these gamers ultimately devaluing the whole program? You're not hearing about these issues arising from Barclays AA offers. I believe the contracts with Citi and Barclays are coming up for renewal sometime soon. We may see how cross AA is with Citi if they push more (all?) card business to Barclays.
Sorry, I can agree with AA here.
i find it absurd that some posters think that theft is legal if the door was left open by mistake. Simply opening credit card accounts under assumed names is and of by itself illegal. That is not an airline rule, that is the law in every jurisdiction I know of.
Remember, many of us collect miles and use them. We seek the best for the least,...
Sorry, I can agree with AA here.
i find it absurd that some posters think that theft is legal if the door was left open by mistake. Simply opening credit card accounts under assumed names is and of by itself illegal. That is not an airline rule, that is the law in every jurisdiction I know of.
Remember, many of us collect miles and use them. We seek the best for the least, that is the game. When people manipulate the system to this extent it costs the airline and ultimately us.
@Grimex is right. Also note that because it’s a formal complaint the response is signed by an outside law firm that prepared it. In litigation matters, lawyers do use “colorful” language to convey their position and try to make the other side look bad. There’s not going to be any effort to apologize or be conciliatory in a formal litigation context.
Gary’s piece has it right. Hard cases make bad law.
AA is taking a shocking position here that should concern all of us who participate in this hobby and should especially concern those who derive income from credit card affiliate agreements. AA is asserting interpretations of credit card application terms that stretch plain meaning beyond ordinary contract law principles. Worse, they are advocating implied terms in credit card applications. And then worst of all, they...
Gary’s piece has it right. Hard cases make bad law.
AA is taking a shocking position here that should concern all of us who participate in this hobby and should especially concern those who derive income from credit card affiliate agreements. AA is asserting interpretations of credit card application terms that stretch plain meaning beyond ordinary contract law principles. Worse, they are advocating implied terms in credit card applications. And then worst of all, they are claiming a right to forfeit entire accounts and booked travel for violation of these vague terms.
And they may well get away with it because they have a great test case with unsympathetic complainants whose conduct is indefensible. I have no horse in this race. I didn’t do mailers or much of any gaming and I think the breathless complaints by those who did wrong and know it are tedious.
But Gary has it exactly right. No matter how much you want to pat AA on the back for rooting out these particular fraudsters, the position they are taking should give you pause.
Here is an example. Suppose you have a Platinum Citi card that you got using a public offer with a sign up bonus. Just one. You did nothing wrong. A year later you decide you want the Citi Executive card for club access and you sign up for it and get the 50,000 mile bonus. The terms of the offer are very clear — you are eligible if you did not get a bonus on the Executive card in the last 48 months. There is no language at all suggesting your platinum card disqualifies you. AA’s position is that a once every 48 month term is nevertheless implied and they can close down your account, take all your miles (not just the sign up bonus), and cancel award trips for gaming. Would they? Who knows. You would have a much better argument than these folks.
But if DOT issues a broad ruling here because it is moved by the skankiness of these particular claimants, we are all much worse off. That is what Gary means by hard cases make bad law, and judging by the comments here patting AA on the back he seems to have it exactly right.
Airlines are doing fraud and abuse by not honouring refunds for flights they cancelled or retroactively changing their refund and schedule change policies. Can impacted consumers seize AA and other airlines assets as a punitive measure ?
Love this. Way to go AA. These people were likely the PITA passengers who thought the world owed them too. Thanks for taking out the trash AA!
Been playing the credit card sign up game for 15 years. Slow and steady wins the race. Pigs get fat, hogs get slaughtered. You can insert any proverb here on not going overboard and it would be acceptable here.
At the end of the day, it's AA's miles and obvious abuse will increase the risk of losing points, so it shouldn't be a surprise. These promos are not meant for multiple bonuses at the...
Been playing the credit card sign up game for 15 years. Slow and steady wins the race. Pigs get fat, hogs get slaughtered. You can insert any proverb here on not going overboard and it would be acceptable here.
At the end of the day, it's AA's miles and obvious abuse will increase the risk of losing points, so it shouldn't be a surprise. These promos are not meant for multiple bonuses at the rate these people are doing, and if one thinks its justifiable due to lax rules, it doesn't take away from the fact that in the end, AA owns the miles and they can pull the rug from under you.
I think an interesting point was that American “admitted“ that the Concierge Key supervisor told them that they could have their miles reinstated to the new AA account. Totally contradicts American’s pages and pages beforehand saying that’s not allowed.
So do they actually reinstate miles as an exception for CK members or was the manager for the most premium service center wrong? Hmmm..
(Btw — I don’t view this as some sort of “loophole“...
I think an interesting point was that American “admitted“ that the Concierge Key supervisor told them that they could have their miles reinstated to the new AA account. Totally contradicts American’s pages and pages beforehand saying that’s not allowed.
So do they actually reinstate miles as an exception for CK members or was the manager for the most premium service center wrong? Hmmm..
(Btw — I don’t view this as some sort of “loophole“ of getting a lot of miles by creating 20 fake accounts. It’s fraud. These pseudo-lawyers on Reddit thinking you can sue American and get a favorable judgment as if this is a Judge Judy courtroom are deluding whoever believes them.)
Gary is right about this. This response is extremely flawed at best, and ironically, fraudulent at worst. Ben, if you had any idea how incompetent this company and its employees are....
It's not a 'shocking' response at all.
It is a robust response to a group of fraudsters (I have no truck with your view that the woman is some sort of dupe for her daughter and son-in-law) who having been found out and had their accounts closed thought it would be a good idea to complain to the DoT. Did they expect AA to just roll over because they got the DoT involved?
I...
It's not a 'shocking' response at all.
It is a robust response to a group of fraudsters (I have no truck with your view that the woman is some sort of dupe for her daughter and son-in-law) who having been found out and had their accounts closed thought it would be a good idea to complain to the DoT. Did they expect AA to just roll over because they got the DoT involved?
I read it last night after it was posted on flyer talk. It's a very easy document to read. Gotta love any response that includes phrases like 'ill gotten gains' and 'whack-a-mole'.
It's written that way because they want people to read it and to let the fraudsters know they are being looked into.
And it's clear that just because AA and/or Citi didn't have a process to stop the reuse of offer codes does not make it a legit thing to do.
@ Grimex, the truth is an absolute defense to libel.
@ Ryan, absolutely preposterous assertion. Multiple accounts, fake names. You've got to be kidding.
I have a few takeaways.
1) The people filing the complaint aren't the brightest bunch. Multiple accounts under your own name? Trying to refund miles to a newly created account different from the one tickets were booked under? Big surprise they got shutdown ignoring the 45 subs.
2) AA is outright lying in multiple places. They included mailer language stating non transferable that only existed after all this took place. This was not the case...
I have a few takeaways.
1) The people filing the complaint aren't the brightest bunch. Multiple accounts under your own name? Trying to refund miles to a newly created account different from the one tickets were booked under? Big surprise they got shutdown ignoring the 45 subs.
2) AA is outright lying in multiple places. They included mailer language stating non transferable that only existed after all this took place. This was not the case at the time these subs was earned.
3) It's kind of hilarious seeing them include downvoted reddit posts as supporting evidence.
4) It's hilarious how they are portraying it as a "mastermind" circumventing their "security measures". There were no security measures. There was also no language saying not to do it and (presumably) a Citi underwriter who approved each and every one of these apps despite having access to credit reports and (also presumably) knowing exactly how many of these Citi AA cards this person had opened in the past. This is Citi we are talking about so I have to add the "presumably".
5) They want to make an example of these people (and frankly good choice of people to make an example of on AA's part). I still think some actual court cases over this are justified and many cases however and I'm not all that sure AA would win.
While the rhetoric has flourishes, and the particular DOT complaint comes from an unsympathetic actor, American's actual ARGUMENTS are actually deeply flawed and self-contradictory:
https://viewfromthewing.com/behind-the-curtain-of-american-aadvantage-account-shutdowns/
American calling the complainant fraudsters might open doors for complainant to sue American Airlines for libel/slander
The format of AA's response is different because the complaint filed is not a regular DOT complaint (called "informal complaint"), it is a FORMAL DOT complaint which is a different process. Look up "Ben Edelman formal DOT complaint"
No I didn't make use of this loophole, but I think the issue here is with airlines who create these promotions but then backtrack when they become too "successful". Is it the customers fault when they make use of a loophole?
In my opinion American should keep the accounts active and take the loss and just tighten up the security. Quote from your linked article:
"Essentially this has allowed people to get two Citi...
No I didn't make use of this loophole, but I think the issue here is with airlines who create these promotions but then backtrack when they become too "successful". Is it the customers fault when they make use of a loophole?
In my opinion American should keep the accounts active and take the loss and just tighten up the security. Quote from your linked article:
"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."
Well this is clearly American's fault because they allowed this behaviour. It's not like American is loosing money by giving away miles because taxes still have to be paid for a seat.
@Ben did you read Air Canada's answers to formal DOT complaints about refunds ? What's your take on them ?
If Boeing worked as accurately as American Airlines in this case, the Boeing 737MAX8 would have been a safe aircraft...
This is why we can’t have nice things.