One of the hottest topics in the points-and-miles world over the past few months has been American Airlines’ shutdowns of certain AAdvantage accounts related to acquisition of AA co-branded Citi credit cards. We’ve covered this topic in great detail at Middle Age Miles, looking at big-picture issues as well as the circumstances leading to my own account termination by AA (wholly unjustified, but we won’t re-hash that story here). If you’re interested, here are links to previous articles:
- Middle Age Miles: Planning & Strategy in the Face of an AA Lockdown (January 23, 2020)
- Middle Age Miles: AA Lockdown Update – Including Potential Media Coverage and Can I Spend My Way Back Into AA’s Good Graces? (February 18, 2020)
- Middle Age Miles: Terminated by AA – Initial Thoughts on Next Steps (February 28, 2020)
- Middle Age Miles: AA Termination – Update #1 – My Initial Communications to AA (March 2, 2020)
- Middle Age Miles: AA Termination – Update #2 – No Response from AA; Escalation to Executives (March 10, 2020)
Since the time we published these articles, we’ve bided our time with respect to pursuing AA. Part of the reason was that life interfered with personal commitments that took up a lot of time; another part was that we’ve wanted to see how things played out a bit before jumping into litigation with AA. [Bottom line, we still believe we have a strong litigation position against AA despite the fact that the law is not particularly consumer-friendly.]
Earlier this week, there was an interesting development on the AA shutdown front. AA filed a lengthy and detailed public response to one of the complaints lodged against it with the Department of Transportation (DoT). We appreciate Gary of View From The Wing and Seth of Wandering Aramean calling this response to our attention and providing a link to AA’s filing. We’ve now had a chance to review AA’s response in detail, and this article shares some of our thoughts about it.
Here is a link to AA’s response in Borges v. AA if you’d like to read the full filing.
Thoughts & Observations on AA’s Response in Borges v. AA
1 – This is only a response filed by AA, containing AA’s arguments. It is not a ruling by the DoT.
We’ve noticed several comments from people who seemed to think that this document is a DoT ruling or otherwise has the force of law. It’s not that at all; it’s just AA’s position and argument.
2 – The facts about the Complainant (Borges) are terrible.
We won’t recount the entire story here. But suffice to say that these are about as terrible a set of facts and about as unsympathetic a Complainant as possible. Multiple players working together to acquire at least 45 Citi/AA cards over a 4-year period; creation of patently false AAdvantage accounts including one opened under the name “Bubbles”; creation of multiple AAdvantage accounts for the same person; etc., etc. If the facts that AA presents about the Complainant and her relatives are true, then this is one of the clearest possible cases of fraud & abuse that would justify account terminations by AA.
3 – AA’s regulatory team & lawyers clearly selected this case to bring to the forefront and hopefully create precedent that helps them.
The facts about the Complainant are so bad that AA will certainly “win” this particular case. We’re sure that AA is hoping that when the DoT inevitably rules in its favor with respect to this case, the DoT will also issue some sweeping statements that AA will try to apply in other cases where the facts are quite different. It’s a reasonable strategy by AA’s regulatory team and lawyers. If we were in AA’s shoes, we’d probably do the same thing.
4 – AA’s response is absolute overkill for this particular case.
AA’s response is a remarkable 25 pages long. To be sure, it didn’t take anywhere near 25 pages to put it in a strong position to defeat this particular Complainant. The reason is related to point #3 above – AA wants to use this case to set precedent that will help it in other cases. That said, though, in its zealousness, AA may have stumbled here and there in ways that can be turned against it down the road.
5 – AA admits that Citi is its “partner.”
On page 1 of the response, AA refers to Citi as its “valued co-branded credit card partner.” On page 5, AA again calls Citi its “partner” when it says that they have been co-brand partners since 1987. Without writing a legal treatise here, understand that “partner” is a term of art in the law, and calling another party your “partner” can have substantial legal implications.
6 – Even though it’s not necessary for AA to win this particular case, AA does talk about the Complainant obtaining application mailers addressed to other individuals and changing name/address/AAdvantage account information during the online process.
This feels like part of the “hope to use this bad case to set good precedent” strategy by AA. Yes, according to AA, the Complainant did use a mailer addressed to someone else to apply for an AA Citi card. AA brings this up, but never really relies on it in its legal arguments.
7 – AA’s response provides a fair bit of information about how AA and Citi went about its “targeted mailing campaigns” and makes some untrue statements.
This section on page 5 of the response is particularly interesting. In the course of setting out this information, though, AA makes at least a couple of statements that are demonstrably untrue.
For one thing, AA states that mailer “invitations contain a unique invitation code that the member will use when applying for the Citi Card, to tie the application (and New Account Mileage Bonus) to the intended recipient of the invitation.” This is simply false. Mailers that contained a 9-digit code were not restricted to the person to whom the mailer was addressed; rather, any person could use the code to apply under his or her own name, SSN and AAdvantage number. (AA/Citi sent other mailers with 12-digit codes that were restricted to the person to whom the mailer was addressed, so there was a clear difference.)
As another example, AA states that “the offer terms specify that an individual may only earn one New Account Mileage Bonus in a 48-month period.” Again, this is false. For example, the terms for the offers for which we personally applied did not contain any time restriction (and this appears to have been true for many other people as well, based on our research). Neither the mailer nor the online application contained any time restriction at all.
8 – AA also contradicts itself.
Amazingly, this happens in back-to-back sentences on page 5 of the response. In one sentence, AA clearly implies that a person can only get one sign-up bonus for a Citi card (“Promotional offers for New Account Mileage Bonuses ordinarily are available only to new Citi Card account holders.”). Whereas, in the very next sentence, AA says that cardholders can get a new sign-up bonus every 48 months (“The promotional terms currently provide that such account holders can earn a New Account Mileage Bonus so long as they have not received one in the previous 48 months.”).
9 – AA says that people were able to get multiple sign-up bonuses “due to a technical issue.”
At the top of page 6 of its response, AA says that “certain unscrupulous individuals” were able to “circumvent security protocols” and get multiple sign-up bonuses, “due to a technical issue.” Wow, lots to unpack here. We could go on forever, but let’s just say that the situation with 9-digit mailers existed for about 2 years, (most) people were applying using their own name & SSN, and AA’s partner Citi vetted the applications, determined that applicants qualified, and awarded the bonuses.
10 – AA reads FlyerTalk and Reddit.
AA even includes a couple of excerpts from FlyerTalk and Reddit threads as exhibits to its response. This made us laugh. We just hope that AA reads Middle Age Miles, too!
11 – AA tries to say that disclosures in card applications that can be accessed through aa.com should be applied to all applications, even those made through different channels.
This borders on the absurd. Terms & conditions attached to a credit card application through one channel also apply to applications made through a totally different channel that contain different terms? Suffice to say, we don’t believe this position has any basis in contract law or in the myriad of highly detailed and specific banking laws and regulations that apply to credit card applications.
12 – AA’s response makes clear that it can specifically identify minute details of a card application.
With respect to Borges, AA could tell whether she applied through aa.com, used a mailer, or used some other channel. AA also knew the terms of the offers; for instance, on page 23 of the response, AA spells out that the offers at issue were for 60,000 and 70,000 AA miles, not 75,000 as Borges had stated in her complaint. The fact that AA knows these details should be very helpful to people who don’t have hard evidence of the terms & conditions of the particular offer for which they applied. AA can access this information, and its response to Borges proves that it’s not overly burdensome or difficult for AA to do so.
13 – AA’s response also makes clear that it can access recorded phone conversations between customers and AA agents.
In its response, AA recites numerous details of phone conversations involving Borges, her accounts, and her family members. For other people’s cases, it may be possible that there are phone conversations that would help the customer. The fact that AA accessed this information so easily for the Borges matter proves that it’s not overly burdensome or difficult for AA to obtain this information if requested in a lawsuit by a different customer.
In sum, it seems a virtual certainty that AA will “win” this particular case because the facts relating to the Complainant are so bad. We can only hope that the DoT is smart enough to not take AA’s bait and that it doesn’t issue a ruling with broad and unnecessary language that harms other consumers.
We could write much more about AA’s response, but we’ll stop here to keep it manageable. We hope you’ve found it interesting, and if you’re pursuing AA legally as the result of an unjustified termination, we hope you find it helpful.
What do you think about AA’s response to the DoT in the Borger case? Please let us hear your thoughts in the Comments!
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