American Airlines is canceling reward trips and seizing miles, joining partner Citigroup in cracking down on customers who take advantage of the carrier’s loyalty program by opening multiple accounts.
Some customers have started complaining in recent weeks on Twitter and a popular Reddit site for people who make a hobby of signing up for credit cards, either properly or by bending the rules, just to earn the rewards. Some complaints have been picked up by related blogs, including The Points Guy.
One issue is a practice that’s long been prohibited: opening numerous accounts with American’s loyalty program, AAdvantage, using a fake name and email address, then accepting a subsequent offer from Citigroup to apply for the airline’s credit card. Those online promotions often come with generous rewards of as many as 70,000 miles.
But some of the complaints online involve consumers who claim they never created bogus accounts and had their accounts locked in recent weeks after simply responding to multiple offers from Citigroup.
“We regularly monitor AAdvantage account activity and take appropriate action when we find cases where the member has violated our program policies or American’s conditions of carriage,” said Susannah Wesley-Ahlschwede, a spokeswoman for American Airlines Group. “There is no recent change to our approach.”
A spokeswoman for Citigroup. also said there’s been no change in its approach. The bank has a policy on some of its cards forbidding users from collecting an upfront bonus if they’ve already received one in the past four years.
Kaden Stern, a 28-year-old pharmacist from Michigan, said he found out via email this week that his AAdvantage account had been closed, and seats he had booked on flights next year had been rescinded. American told him the rewards he used were obtained using an “exploitative practice.”
Stern said he took advantage of online offers from individuals who were selling codes obtained from Citigroup promotions intended for other potential customers. Those promotions didn’t say they were nontransferable, according to Stern. Some Citigroup offers omit that language.
“I know I’m not innocent, but I don’t think the way they’re doing it is the way it should be done,” Stern said. “Those sign-up bonuses weren’t supposed to be gotten, but the rules didn’t say I couldn’t.”
For card companies, it can take years for a customer to become profitable. That’s why the biggest U.S. banks have grown wary of offering large, upfront bonuses for fear of attracting churners who quickly spend what they need to earn the miles or points and then abandon the card.
American Express Co. has added new technology to its marketing and underwriting processes to suppress these so-called gamers, and is offering more incentives for long-term loyalty instead.
“I’m heartened by some rationality in the competitive environment,” Doug Buckminster, president of AmEx’s global consumer-services group, told investors last month. The industry is becoming more aggressive in trying to prevent “gaming” of introductory bonuses, Buckminster said, and companies have removed some features that were “expensive and not resonating.”
American has been investing in ways to beef up AAdvantage, and last year increased the number of seats available for use with the program. About 7.6% of American’s 2018 passenger traffic was from reward trips, according to filings by Fort Worth, Texas-based American.
Citigroup has been expanding its partnership with American Airlines in recent months, offering consumers enrolled in the program the ability to open checking accounts in exchange for more miles.