Alaska Air Class Action Says Trip Insurance Is Kickback Scheme

A class action lawsuit has been filed against Alaska Airlines by a customer who claims that the airline obtains kickbacks from insurance companies for selling their travel insurance packages.

Plaintiff Madeleine F. Shattenkirk says Alaska Airlines encourages travelers to purchase travel insurance, which is provided by Allianz (or other third-party insurers).

In addition, the plaintiff alleges that the defendant does not disclose to consumers that it gets a kickback from the insurer if the traveler decides to purchase the trip insurance.

The Alaska Airlines class action lawsuit claims that almost every state requires insurance agents to be licensed. The plaintiff says this guarantees that the agent is subject to regulations and that the agent is qualified to sell insurance.

In addition, the Alaska Airlines class action lawsuit alleges that almost every state does not allow individuals that are unlicensed from acting as insurance brokers or to get money for brokering insurance.

“Despite these prohibitions, transportation companies such as airlines, including Defendant, have come under fire for receiving undisclosed, illegal brokerage fees or commissions—i.e., kickbacks—from the travel-insurance companies that they promote on their websites,” the plaintiff alleges.

The Alaska Airlines class action lawsuit claims that the airline urged its customers to purchase travel insurance provided by Allianz Global Assistance. The cost of the insurance included an undisclosed fee that Allianz would pay to Alaska Airlines which was in exchange for brokering the sale of insurance.

“Alaska did not, however, disclose to consumers that it was receiving these kickbacks, and its website misled consumers into unknowingly funding its improper brokerage fee,” the plaintiff alleges.

The Alaska Airlines class action lawsuit states that after the customers enter their personal information into the website and before completing their purchase, the company offers the option to buy a travel insurance policy through Allianz Global Assistance.

The plaintiff claims that under the area where the customer enters his or her payment, there is a statement in bold that says, “Highly Recommended: Protection for your trip to [city].”

If the customer buys travel insurance for a flight, the insurer emails the traveler a copy of the insurance policy that was purchased, the plaintiff alleges. In addition, nowhere in that communication is any reference to Alaska getting payment in connection with the purchase of insurance.

“At no point does Alaska disclose to consumers that it receives a commission or kickback every time a customer elects to purchase travel insurance, or that the consumers are funding this kickback. At no point during the class period did Alaska disclose to Plaintiff, or any of the class members, the true nature of its relationship with Allianz or any other entity that is associated with the travel insurance offered on Alaska’s website,” the Alaska Airlines class action lawsuit states.

The plaintiff claims that if Alaska Airlines disclosed that the price of the Allianz insurance included an illegal kickback to Alaska, she would not have purchased it or would have paid less for it.

The Proposed Class Members include: “All persons who purchased a travel insurance policy on Alaska’s website in the United States within the applicable limitations period.”

Did you purchase travel insurance through the Alaska Airlines website? Leave a message in the comments section below.

The plaintiff is represented by Melissa R. Emert of Stull Stull & Brody, Marc L. Godino of Glancy Prongay & Murray, Rosemary M. Rivas of Levi & Korsinsky LLP, Daniel C. Hedlund of Gustafson Gluek PLLC and Kim D. Stephens and Rebecca L. Solomon of Tousley Brain Stephens PLLC.

The Alaska Airlines Kickback Class Action Lawsuit is Shattenkirk v. Alaska Airlines Inc., Case No. 2:19-cv-01656, in the U.S. District Court for the Western District of Washington.

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