[Update: Shutdown emails received] American Airlines shutting down some accounts for churning

56

Update 12/16/19: A round of emails has gone out today letting people know that they have officially been shut down. The email indicates that their American Airlines AAdvantage account (and any others under their control) has been closed, miles forfeited, award tickets cancelled, and that they are banned from future participation in the program. If you have cause to concern about upcoming award travel, you may want to think about backup travel options. (H/T: Doctor of Credit).

Update 12/12/19: Reports are coming in of a second wave of shutdowns. If you were unaffected in wave 1 but concerned — and especially if that’s you and you also have upcoming travel booked — you may want to monitor discussion in this reddit thread and have a backup plan for short-term travel. (H/T: Doctor of Credit)

This news broke a few days ago, but I know that it may affect some readers here that may not have heard: American Airlines has been suspending / shutting down some accounts for abusing credit card rewards. That’s surely a concerning development for some and at least somewhat surprising to see coming from the co-brand program.

American Airlines Planes

Shut down progression

As reported by Doctor of Credit, it seems that the general progression is being unable to log in to one’s American Airlines AAdvantage account, then being told they would be contacted by the Corporate Security program. Corporate Security then follows up with their questions / request for additional information. You can read more about it in this Flyertalk thread.

Are you at risk of shut down?

If you have to ask this question, my guess is that the answer is no. I think the people affected by this probably know who they are. Essentially, some folks earned more welcome bonus miles within two years than American intended. If that wasn’t you, this particular shut down isn’t likely an issue for you.

If you are affected by the shut down and you are contacted by Corporate Security, I think honesty is likely your best policy. My guess is that the people with the lowest chance of reinstatement will be those who sold miles to brokers. We do see airlines occasionally crack down on those they suspect are selling miles to brokers, a practice that the airlines particularly dislike. I’ve personally never tried to sell miles via a broker as I know that does tend to draw the ire of loyalty programs.

I have occasionally heard stories of people who were suspected to be selling to brokers who were able to demonstrate that they were not selling miles and their accounts were reinstated, which is why I suggest that honesty is likely the best policy. I don’t know that AA will reinstate any of the accounts they suspect of abuse, but if you were using the miles for personal / friends & family use, you probably have a better shot.

On the other hand, this may be a case of having found the limit and accepting the loss for some.

Bottom line

We’ve seen issuers become more aggressive in terms of going after those they view to be undesirable customers by either clawing back points or creating rules to slow down those who earn a lot of points from new customer bonuses. This is the first time I’ve read of multiple reports of people shut down by the co-branded loyalty program for credit card activity. That said, I don’t think it is particularly surprising in this case — the grAAvy train was going to come to an end at some point. It seems that point may be now. If you are concerned about whether you may be affected but have not been shut down yet, I’m not sure what you should do. Burning the miles rapidly through redemptions may just draw attention and who knows what will happen to ticketed awards if you’re shut down? I think my recommendation would be to wait and see what happens — but take that recommendation with a grain of salt.

H/T: Doctor of Credit

0 0 votes
Post Rating

Subscribe
Notify of
guest

This site uses Akismet to reduce spam. Learn how your comment data is processed.

56 Comments
Inline Feedbacks
View all comments
Raghu Narayanan

Hi
I got a US mail offer witha code from Citi to open a Citi Priority checking account with 50K balance to get 50K AA miles after 90 days if I meet certian conditions and transactions. I got the exact same offer in September of last year online through my credit card online account and signed up and got the 50K miles on Jan 10th. On Jan 14th I downgraded m,y account to regular checking and pulled out 48.5K over last 2 weeks.

On Jan 15th Citibank sent me this offer (same offer as sept 2019). If I close the basic checking account and reopen a Prirotiy account, would that be a red flag for potential AA shutdown. But these are codes sent in my name .

I have like 400K AA miles which I don’t want to lose, or I am better off with Bask Bank

Raghu

[…] is less of a sweet spot and more of a sore spot for many at the moment given the current status of American Airlines AAdvantage shut downs, though that situation wouldn’t likely pertain to someone who is new to opening credit cards. […]

Ryan del Mudo

Well didn’t think this would hit me. Showed up at the airport today and no-go with my flight PHK-HKG. I’m Platinum, and yesterday changed my flight from biz class to web-special because it was so cheap. The Web Special got triggered for fraud, trying to reinstate my biz class ticket was told my account is on hold for fraud. Hoping for the best but looks like I got nailed. Loyal AA customer, will be interesting how this pans out. ALERT: Check your flights before you go to the airport! I lucked out and UA has a 43k flight which I grabbed fast, but won’t get to enjoy my Plat Bennies, I guess, forever . I won’t get into how criminal it is to show a flight in your app (to be fair it wouldn’t check-in but that’s pretty common for international) and then get to the airport and not honor it. American, you suck! I fly a lot for business, and that business is gone from AA forever.

Shudda Knownbetter

They are never buying & reselling crypto with their AA cards again

derek

I got a roughly 50,000 mile bonus. That might have been 20 months ago. I got rid of the card after a year. A few months later, I got a 10,000 mile bonus for a simple Citi AAdvantage Mile Up card, which has no fee but the bonus is very small (10,000 miles and $50 statement credit). I hope AA doesn’t try to attack me. The Mile Up card, I just responded to their mailed offer, not something that I sought out.

CaveDweller

Derek
Don’t be doing any cards unless it’s 50K points+ this isn’t 3 years ago .
Happy Hunting .
CHEERs

Ryan Thompson

Fake update. Poor reporting as usual from Fedora Man. These emails are from 10 days ago, not today. Details matter…

CaveDweller

Nick
Ask ur buddies what does that do to a person”s FICO score . Points are a joke but FICO =$$$.
CHEERs

Blue

Doesn’t budge it, actually.

CaveDweller

Blue
I hope that’s true but try and get a loan from that bank. I stayed away from my bank but the offer wasn’t bad . BMO and 2-p-lounge passes too .
CHEERs

Adam

I don’t fall into this category of those affected, but it makes me trust AA less. What they should do is realize their system is subject to potential abuse and prevent that abuse from happening in the future. They f’d up by allowing all of this in the first place, and are trying to shirk blame by imposing retributive authority on customers doing what they’ve pretty much always done. AA has become a pathetic company under Doug Parker – this certainly doesn’t surprise me.

Tom

Really doesn’t bother me at all. In fact, I have to think this is a good thing in that this should preserve the program for those of us who don’t abuse the system. Shutting down the people who did some of the things I read about is a far cry from shutting down those who just manufactured spend, IMO>

CaveDweller

I wonder if AI does it on auto or a person looks then gives the AX . Let’s see I bet u will have more people giving u a hard time over this .
CHEERs

Hal

when the AA executive card was giving out 100k offers, my buddy opened 3 cards at once and got all 3 bonuses. I think that’s sort of the abuse they would look for, but probably even more extreme.

scott

There was no language back then about limiting the number of AA executive cards you could get. There was absolutely nothing in the T&C about how many executive card bonuses you could get. And that offer was almost 6 years ago.

Andysol

“I think my recommendation would be to wait and see what happens“

This is exactly the advice that should be taken. This is unprecedented in that it’s AA and not the banks. And considering AA has not responded or told anyone why they were shut down, sitting on our hands is the right move.

Chris

Nick and Gary since you may be more plugged in on this, I’d be interested if you think there is still a possibility this is all a false alarm or other noise causing a larger reaction?

It may be that I’m just not privy to the discussions occurring behind the scenes in closed groups, but I haven’t seen a good example of a shutdown with a full picture of the variables involved with that individual. There is a better locked account DP on reddit, but again we don’t truly know the nexus of the reason of the locked account.

Right now the whole thing smells to me, I don’t think we have ever seen a program tackle credit card SUB earnings (outside of re-sellers).

While the GrAAvy train wasn’t that well know, it wasn’t a secret either, barring this being a very early precursor of a wave of shutdowns, I’m very surprised no-one in the FT thread on mailers has a data-point.

I entirely agree with the “hurry up and do nothing” recommendation in this case while we wait for things to be clearer, I’m just not quite ready for doom and gloom yet. I hope I’m not being too optimistic.

Gary Leff

Via AA corporate security this is definitely not a false alarm. Not saying everyone is getting nabbed, but there have been more than one round of shut downs due to this.

Chris

Thanks for taking the time to reply and your input Gary, greatly appreciated!

CaveDweller

Nick
U guys Throw Everything Out There as in Caution or maybe 1 to 5* travelers can use it. . That’s their problem IF they don’t Heed the warning or Get Pissed Off because that’s what their Doing ..
CHEERs

FlyGuy

Not for nothing, JonNYC went down a completely different rabbit hole concerning these shutdowns and how people were getting the bonuses vs how they actually were getting these bonuses.

if you take a look at his reactions and his commentary regarding said situation he was greatly misinformed about how deep this went.

Chris

Ok, now it’s time for doom and gloom.

Gary Leff

The people getting closed are those who were opening new AAdvantage accounts under fake names to generate targeted offers that didn’t have 48 month bonus language, and then most often using those offers for themselves under their ‘real’ accounts. Lots of accounts being opened in pets names, for instance. Fake accounts, using targeted links intended for a different AAdvantage account, seems to be mostly what’s going on.

There are also some instances of more problematic things as well.

LarryInNYC

It’s hard to imagine what’s “more problematic” than these actions. I guess, technically, AA doesn’t experience a loss until the points are redeemed and if that’s happening through prohibited sales of points (brokered or direct) then AA may consider that the “point of harm” but it’s still possible to claim that you didn’t know that’s illegal. But someone creating tens of duplicate award accounts and then sometimes even accruing the points into their own account — it’s pretty hard to claim that you weren’t knowingly defrauding the airline.

Gary Leff

The miles as a liability on the balance sheet at the point they’re awarded. Initial bonus offer isn’t entirely funded by Citi. Multiple accounts for purpose of circumventing program or partner rules is against AAdvantage terms. AA is fully within their rights (and truth is that they can do whatever they want with no recourse more or less, the only rights we have are the terms and the terms themselves disclaim any obligation of fair dealing).

Ryan

True but we now know that not all shutdown accounts were engaging in any of the above actions. Whether by error or otherwise, AA is using a very hamfisted approach.

losingtrader

” Lots of accounts being opened in pets names”

So, given I have ten cloned dogs…..you see where I’m going with this

CaveDweller

I added one person on the ph ” Jim Shoe ” they said that was fine.
CHEERs

Ex-broker

I can’t speak to the churning closure by AA, which is a new angle ,but can speak to selling mileage , having business experience with this decades ago.
The whole process makes little sense today.
AA was always known to be tough when they picked a case to proceed against. If you are selling miles the tipoffs are many tickets issued to people with different last names, on trips from many different departure points in a short period.
AA would question travelers at the gate, and if they didn’t know the name of the frequent flyer whose miles were used , they were told they wouldn’t be flying on that ticket.
There was a time when miles could be purchased from very frequent flyers for 1 cent per mile and resold for 2-3 cents, often through travel agencies seeking to save clients money and make a decent profit themselves. Obviously, that time is over .

The present situation with low purchase prices for miles , bought directly from the airline, makes me wonder why anyone living in a US jurisdiction would be a mileage broker, and any ff would sell miles .

While I admit my comment is tangential to the post, I’d advise not to sell miles to a broker. This is true not just because your account could be closed (you may not care), but because many who entered the business in the past 2 decades are not trustworthy. That’s just my observation.
I have never sold a ticket from any of my accounts and I don’t engage in MS or the churning implied in the post. I don’t have any moral objection to it; rather it’s a risk/ reward decision and I have enough native spend.

If I were dying and needed cash, that would be about the only situation in which I’d sell miles.

At this point, if the post applies to you and you are substantially worried, there’s always the quick cash out for Amazon gift cards. It’s not a good redemption, but at least it’s a redemption.

All the best.

voyager

a lot of references to the “grAAvy train” everywhere. Since it’s no longer relevant and doesn’t need to be hush-hush among you guys, can you just explain what the deal was please?

JohnFromATL

Nobody knows the root of the closures. However, there was a lot of people taking advantage of the fact that AA mailers bypassed the 24 month limitation on the Citi AA card… The only real throttle was the Citi velocity limit on applications,so you could get a million miles a year on the “grAAvy train”

Eric

Mailers and emailers would often not have the 24-month and then 48-month restriction. To increase the amount of SUBs possible, some people would create dummy AA accounts with different names but at their own address. The codes received in the name of the dummy could often be used by the “real person” to get more cards with SUBs. (Some people sold their “extra” codes, too.)

More recently emailers were sent, from AA rather than Citi, with T&Cs stating the offer was one-time use, non-transferable. Despite the T&Cs Citi’s system would often still accept use of the code by the “real person” who set up the dummy accounts…and the bonus was successfully received.

That’s the gist of the “grAAvy train”

voayger

thanks for the explanation !

Sigh

Even the bloggers don’t mention this because they’re smart enough to keep it discreet.

What possible benefit could you get to sharing this information? Internet points?

The lack of discretion in this hobby from the most dense among us is why all the good stuff has moved underground.

Eric

LMFAO. Get over yourself, dude. Ummm…there’s a whole Flyertalk thread dedicated to it. Daily Reddit discussion. Been publicized on blogs. Citi knew for years. This never was a secret. And it doesn’t matter because the jig is up at this point.

Jeff

Putting aside the difficulty in following this article given the writing (for example, it seems to suggest that “honesty is the best policy” because you “might” succeed if you honestly didn’t do anything wrong), how does this match the headline? Selling miles to brokers is a far cry from “churning”. In fact, what is churning with respect to an airline program, as opposed to credit cards?

You suck

Two peoples account were locked. They have had no communication as to why they are locked. We don’t even know if it’s due to churning. Everything is just speculation at this point. Might want to add that to your post.

Sigh

Where are you getting the notion that anyone sold miles? This simply isn’t true.

John

Can someone please link to the Flyertalk and reddit threads? As someone who doesn’t normally use those forums, o can’t figure out where this is being discussed on those sites.

Ryan

Sound a good to me. Get rid of people who abuse the system. These people are the ones who cause mileage devaluations.

MSer

Hope it isn’t retroactive the the 100K + $200 Citi AA Exec card grAAvy train that ran 3-4 years ago. Still have nearly 1.5M remaining…

CaveDweller

I have enough points for 3 or 4 years .How long for U and why PUSH IT ??
CHEERs

Evan

enough points for 4 years awesome! my miles are almost gone. i need to get Jamaica! help another points addict with a fix? lol

CaveDweller

Got back from Greece in Oct Flipped 3 since then . Hard work but someone needs to take the banks money .
Given away about 7 rt’s in the US never outside the US to costly to Be Nice (Fr.)
CHEERs

Fed Ora

FYI – Award tickets have been cancelled by those who have been shutdown.

You suck

This isn’t true. 2 confirmed shut downs.

Sucks to suck

There is a difference between “locked out” and “shutdown”. Those who are locked out still have their flights. Those who have been shutdown have had them cancelled. I have 20 DPs, how many do you have?

pizzy

What proof do you have that the shutdowns are related to “abusing credit card rewards”?

ithrowpoop

several datapoints, discussed ad nauseam in reddit and flyer talk for several days now….