American Airlines Sued on Credit Cards

A $250-million class-action suit was filed against American Airlines on Monday by a Beverly Hills travel agent claiming that the airline is billing the agents for tickets charged to credit cards that it knew or should have known were invalid.

In the suit filed in Los Angeles Superior Court, Susan Harris says she entered into a written agreement with the airline under which it was to provide travel agents with automatic approval codes on credit card ticket charges under $500.

In return, the agents were to rely on the automated approval code received through the airline’s Sabre reservations system computer and not have to contact the credit card companies directly for verification of validity.

15,000 Class Members

Harris said American forced her to pay $313 on such a ticket under threat of revoking her charging privileges.

The suit was filed by Century City attorneys Terrance McKnight and Sanford Millar on behalf of Harris and other travel agents similarly affected. It claims that the class members exceed 15,000 persons or entities and says their losses are likely to exceed $10 million.

The class action is asking for compensatory damages and $250 million in punitive damages. In addition to American, it names as a defendant AMR Corp., the airline’s holding company.

Lowell Duncan, American’s vice president for corporate communications, said the airline has not yet been served with a copy of the suit, but he added that “it is very difficult to believe that there are grounds for such a suit.”