JetBlue, Delta Receive Unlawful Kickbacks for Selling Travel Insurance, Class Actions Claim [UPDATE]
by Erin Shaak
Last Updated on July 7, 2022
April 6, 2021 – Settlement Proposed
A settlement has been proposed to resolve nine lawsuits, including the two detailed on this page, against airlines and travel companies who allegedly failed to disclose that they receive compensation from the sale of Allianz travel insurance policies offered as add-ons to customers’ purchases.
The $26 million proposed settlement, detailed here in a November 2020 court filing, will release claims against Delta Airlines, JetBlue, American Airlines, United Airlines, Alaska Airlines and Amtrak in exchange for monetary payments and injunctive relief.
If the settlement is approved by the court, those covered by the deal will be able to claim up to 15 percent of their trip insurance payments, with the amount adjusted either higher or lower depending on how many claims are approved. The defendants will also be required to disclose that they receive compensation for the marketing of Allianz travel insurance policies.
The settlement proposes to cover anyone in the U.S. (including the District of Columbia, U.S. Virgin Islands and Puerto Rico) who, during the time periods listed below, purchased a travel insurance policy from Allianz Global Assistance as part of its business relationship with the defendants through any of the defendants’ websites or mobile apps, Allianz’s websites dedicated to the defendants’ customers, or Allianz’s dedicated phone numbers for the defendants’ customers:
- American: September 12, 2012 through the date the court orders notice to be sent;
- Delta: September 17, 2014 through the date the court orders notice to be sent;
- JetBlue: September 17, 2014 through the date the court orders notice to be sent;
- United: September 23, 2013 to September 30, 2017;
- Alaska: June 7, 2015 through the date the court orders notice to be sent;
- Amtrak: October 29, 2016 through the date the court orders notice to be sent.
The plaintiffs have proposed that those covered by the deal be notified through the email address they used to purchase their travel insurance policies, and a dedicated website will also be set up to inform people about the settlement and to allow for the submission of online claim forms.
The plaintiffs note that the proposed settlement “is the result of years of often highly contentious litigation in several of the Actions” and months of arm’s-length negotiations with the assistance of a mediator. Moreover, the deal is “all the more positive” considering several of the cases received adverse rulings and have pending motions to dismiss, motions for summary judgment, or appeals, the plaintiffs’ motion says.
“In light of these significant hurdles, the Settlement is an excellent result because it puts money back into the hands of the Class,” the plaintiffs state.
The settlement now awaits preliminary approval from the judge overseeing the consolidated cases. ClassAction.org will update this page with any new developments, including the publication of the settlement website. You can also sign up for our newsletter for the latest in class action settlement news.
Two proposed class action lawsuits were filed this week against JetBlue and Delta, respectively, over the airlines’ allegedly deceptive marketing of optional travel insurance policies.
According to the lawsuits, JetBlue and Delta aggressively push customers to add “travel protection” to online ticket purchases for an additional fee. What the airlines don’t say, the suits claim, is that they’re getting a cut of the profits despite not being licensed to sell insurance.
JetBlue and Delta’s “Deceptive Representations”
While customers are navigating through the defendants’ respective websites to buy plane tickets, they are stopped in their tracks by a page that presents them with an option to add travel insurance to their purchases, the suits explain. At this point, each traveler must choose whether they want to add this insurance before completing their purchase, according to the lawsuits.
The two cases, which are nearly identical, note that each airline marks the trip insurance option as “highly recommended,” assuring customers that “[p]eace of mind is only a click away” while providing them with a list of reasons to insure their trips. Though the lists are convincingly pro-consumer, the lawsuits argue that the airlines are really only concerned about their bottom lines, and not whether the consumer gets reimbursed for a last-minute cancellation. From the complaints:
This marketing is intended to create the impression that the trip insurance is in the consumer’s best interest—while hiding the fact that JetBlue [and Delta are] pushing the product because it is in [their] financial interest to generate sales. In other words, the consumer is deceived into believing that JetBlue [and Delta are] acting in the consumer’s best financial interest, and not [their] own.
JetBlue and Delta Take a Cut of the Profits, Lawsuits Claim
According to the lawsuits, the airlines attempt to appear neutral and distance themselves from third-party insurance providers, but in reality, are secretly commissioned by the companies to sell travel insurance policies.
The airlines’ websites supposedly note that the policies are “[r]ecommended by AGA Service Company, the licensed producer and administrator” of the plans, which are reportedly underwritten by Jefferson Insurance Company or BCS Insurance Company and are provided by Allianz Global Assistance. The cases argue that in the insurance world, the “producer” is known as the insurance agent or broker – or, in laymen’s terms, the one who gets paid to sell insurance. JetBlue and Delta represent that the extra insurance cost is merely a “pass-through charge” that the airlines simply forward to AGA without any profit on their part, according to the lawsuits.
In truth, the cases allege, JetBlue and Delta receive a “kickback” from the insurance providers for selling policies to travelers. This practice is illegal, according to the complaints, because the airlines aren’t providing the customers any services when selling them insurance policies on their websites and, on top of that, aren’t even licensed to sell insurance.
“JetBlue has never disclosed to Plaintiff, or any of the class members, the true nature of its relationship with Allianz, Jefferson Insurance Company, or BCS Insurance Company. Specifically, JetBlue has not disclosed the fact that it retains or receives a substantial kickback or commission on the policies made available on its website,” one complaint attests, with the other alleging the same regarding Delta.
The Proposed Class
The lawsuits are each attempting to cover a proposed class of individuals who purchased a trip insurance policy on JetBlue’s or Delta’s websites, respectively, “within the applicable limitations period.”
Hair Relaxer Lawsuits
Women who developed ovarian or uterine cancer after using hair relaxers such as Dark & Lovely and Motions may now have an opportunity to take legal action.
Read more here: Hair Relaxer Cancer Lawsuits
How Do I Join a Class Action Lawsuit?
Did you know there's usually nothing you need to do to join, sign up for, or add your name to new class action lawsuits when they're initially filed?
Read more here: How Do I Join a Class Action Lawsuit?
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A note on class action complaints:
Bear in mind that the information in this blog post summarizes the allegations put forth in the following legal complaint. At the time of this writing, nothing has been proven in court. Anyone can file a lawsuit, with or without the representation of an attorney, for any reason, and ClassAction.org takes no position on the merits of the suit. Class action complaints are a matter of public record, and our objective on this website is merely to share the information in these legal documents in an easily digestible way.
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