Can this trip be saved? Help, American Airlines wants $20,000!

By | October 18th, 2010

Nancy Schmuhl thought she’d paid for her American Airlines tickets. But the airline had one last bill for her: A $20,000 invoice for “certain fraudulent bookings” she is alleged to have made.

You should read the letter it sent to her. I’ll get to that in a minute.

In the meantime, you’re probably wondering: What kind of fraudulent bookings?

Schmuhl made several fictitious reservations which she later canceled. Regular readers of this site will remember a previous American Airlines case. And United Airlines famously confiscated a passenger’s miles for similar behavior.

Schmuhl made a few of the reservations and her assistant made the rest, according to her husband, John. She’s a very frequent American Airlines customer, with more than 100 flight segments a year.

In her peer group this is common behavior. She learned “creative booking” from a travel agent many years ago and has discussed it openly with AA employees. She has a couple really close AA-employee friends who have actually helped her make sure she gets the flights and seats she desires.

American is on record as saying it’s stepped up efforts to fight what it says is fraud.

Let’s go right to the letter it sent to Schmuhl.

This is a demand letter for damages caused by your fraudulent bookings on American Airlines. While American Airlines is ready to pursue all remedies under the law, we are willing to resolve this matter with you informally at this time.

American Airlines recently learned of certain fraudulent bookings you caused on our system, and suspended your AAdvantage account and privileges. Over the last several months, you caused a considerable number of seats in the first class cabin to be booked for flights on which you were traveling, only to later cause those seats to be canceled so that you could receive upgrades into first class. Your fraud scheme made it impossible for American Airlines to sell those seats, causing the airline significant monetary loss.

Our investigation shows that from September 14, 2009, through January 19, 2010, you caused such fictitious bookings on at least 5 flights for 18 first class seats. You caused at least $32,300.00 in monetary damages to American Airlines. Attached you will find a statement of account for the amounts you owe to American Airlines. To the extent this fraud scheme is tied to other individuals and/or business entities, American Airlines reserves its right to pursue recovery against them.

American Airlines does not tolerate such fraudulent conduct. We take incidents of abuse and fraud in the AAdvantage Program, such as this, with seriousness and care. We value our relationships with loyal AAdvantage members, which makes it all the more difficult to understand why you engaged in this fraudulent activity.

For settlement purposes, American Airlines is willing to not pursue legal proceedings against you if you make restitution to American Airlines in the amount of $20,000.00 and refrain from fraudulent bookings going forward. Acceptable forms of payment are: wire transfer, cashier’s check, and money order, made payable to “American Airlines.” For wire transfers, please contact me to coordinate. This settlement offer expires by the close of business on Monday, June 15, 2010. American Airlines makes this offer, which reflects a significant discount from the amount of damages you caused, as a good faith attempt to resolve this matter with you.

  • Chris

    AA CoC states the ficticious booking activities she engaged in are prohibited. She clearly breached her purchase agreement with AA, and AA can prove damages in the form of unsold seats. Slam dunk case in favor of AA IMHO.