Ari and Shanna Nachison have filed a proposed class-action lawsuit against American Airlines for closing their accounts which contained a combined 1.1 million American Airlines miles. The reason those miles were taken? According to emails the plaintiffs received from American Airlines, they participated in fraudulent activities by opening too many Barclays and Citi-branded American Airlines cards in a short amount of time.
But the Nachisons maintain all the cards they opened were done in accordance with the terms listed on the card applications, which were “boilerplate.” Nachison et al. v. American Airlines, Inc. highlights a legal gray area—one that may have implications for many others that found themselves with closed accounts in late 2019 and early 2020.
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Over a Million Miles Are Gone, and Neither Side Agrees Why
According to a court filing dated January 29, 2024, the account closures happened in early 2020, less than two weeks apart. Ari lost 564,463 American Airlines AAdvantage miles, while Shanna lost 550,664 miles. American Airlines didn’t give a specific reason for seizing the accounts, other than referring to its general terms which include violations related to “fraud, misrepresentation and/or abuse of the AAdvantage program.”
In the filing, attorneys for the Nachisons are asking for a jury trial as part of a larger class-action lawsuit, which would allow others “similarly situated” to join the case filed in the United States District Court for the Northern District of California. If approved, it could set the stage for many AAdvantage members who had their accounts shut down to seek damages for losing their miles.
What Caused the Sudden American Airlines Account Closures?
The filing mentions that Ari and Shanna each opened a total of six Barclays and Citi American Airlines cards between 2018 and 2019 and each used two promotional codes. Their attorney says that the terms and conditions listed on the applications did not have an “Offer Availability” section that would’ve expressly prevented them from being able to earn a welcome bonus for each card.
Some card applications at that time had specific language that said customers who had earned a welcome bonus within the previous 48 months couldn’t earn another one. But because the card applications the Nachisons used didn’t have this section or restriction, they say the miles were earned in accordance with the terms listed.
They opened the cards, met the minimum spending requirements and earned the bonuses. Around a year later, American seized all their miles—including those earned from flying, making everyday purchases with other cards or through promotions unrelated to the card applications.
What Can We Learn From This Lawsuit?
We’ll let the courts hash out the legalities of this situation, but one thing about the case is striking: The Nachisons say American Airlines didn’t give them a reason why their accounts were closed other than the general terms. Did American Airlines owe them more?
The argument could be made either way. On one hand, AAdvantage is an American Airlines program, and it can do whatever it wishes—It’s right there in the terms and conditions:
“American Airlines may at any time suspend or terminate any AAdvantage® account for any reason in its sole discretion, such as suspending or terminating any AAdvantage® account associated with a customer who violates American Airlines policies and procedures as determined by American Airlines in its sole discretion.”
On the other hand, when customers earn miles in a way they believe is in accordance with the program—especially hundreds of thousands of miles—it would be proactive to provide a specific reason.
This case is getting to the heart of what types of communication companies owe customers—if any at all. It’s especially important considering that American Airlines, and other airlines, make a great deal of profit from their loyalty programs.
Bottom Line
This situation includes questions of intention, what companies owe their customers and, of course, whether or not the terms were followed. Regardless of the outcome, this lawsuit could have big implications for customer loyalty programs in the future. We’re highly curious to see how it plays out and will be closely following its developments.
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