American Airlines Seeks Dismissal of Trip Insurance Kickback Class Action

American Airlines is seeking dismissal of a consumer rights class action lawsuit claiming the company illegally conceals the kickbacks it receives for selling trip insurance.

Plaintiff Kristian Zamber says American Airlines has been falsely offering trip insurance policies to its online ticket purchasers ostensibly as a pass-through fee that goes directly to an independent third-party insurer.

In fact, he claims American Airlines pockets a percentage of the price paid for that insurance as a kickback. Zamber alleges that failing to disclose this practice violates provisions of Florida consumer protection law.

According to this American Airlines class action lawsuit, passengers who buy their tickets on the airline’s website at aa.com are offered an opportunity to buy travel insurance from Allianz Global Assistance.

Zamber says the language in the offer expressly states that the insurance is a product of Allianz Global Assistance and is not being offered by American Airlines. Language included in the ticket sales website tells the customer “[t]his insurance is offered by a third party, Allianz Global Assistance, not American Airlines.”

He also claims that a Frequently Asked Questions page elsewhere on the American Airlines website tells customers that “[t]rip insurance products are sold by third-party insurance providers, not American …”

Despite these repeated denials, Zamber says American Airlines actually takes a share of the premiums paid to Allianz Global Assistance.

“In reality, and completely unbeknownst to its customers, the trip insurance is a hidden profit center for Defendant, as American receives for itself a portion of the funds for every trip insurance policy its customers purchase,” Zamber alleges.

He argues that by failing to disclose the revenue it gets from these trip insurance premiums, American Airlines violates the Florida Deceptive and Unfair Trade Practices Act. His American Airlines class action lawsuit also includes a common law claim for unjust enrichment.

In its motion to dismiss, American Airlines says Zamber fails to state a claim because the airline is not under any obligation, statutory or otherwise, to disclose whether it receives a cut from its customers’ purchase of trip insurance.

American Airlines also argues that Zamber has failed to allege he was actually harmed by the conduct he accuses the airline of and therefore has no standing to sue.

The airline also says Zamber’s claims for unjust enrichment and for violation of the FDUTPA are preempted by the federal Airline Deregulation Act of 1978.

Zamber is proposing to represent a plaintiff Class consisting of “[a]ll persons who purchased a trip insurance policy within the applicable limitations period.” He expects Class Members will number in the thousands.

He seeks a court order requiring American Airlines to disclose its retention of trip insurance premiums and the amount of the alleged kickback it receives. He also seeks an award of damages, restitution of premiums paid by Class Members as a result of the allegedly improper practices, court costs and attorneys’ fees.

Zamber is represented by attorneys Alec H. Schultz, Scott B. Cosgrove and Jeremy Kahn of León Cosgrove LLC.

The American Airlines Trip Insurance Kickback Class Action Lawsuit is Kristian Zamber v. American Airlines Inc., Case No. 1:16-cv-23901, in the U.S. District Court for the Southern District of Florida.

UPDATE: On July 27, 2018, a consumer seeks a partial win in a class action lawsuit claiming American Airlines receives illegal kickbacks from the sale of travel insurance that it claimed was offered by third-party company Allianz Global Assistance.