Primary plaintiffs Igor Romanov and Betram Hirsch filed the Citibank American Airlines miles promotion class action lawsuit in February of 2012. The two lead plaintiffs alleged Citibank consistently promoted the accumulation of American Airlines miles to motivate customers to open checking and/or savings accounts that held minimum deposits of $25,000.
According to Hirsch and Romanov, Citibank did not sufficiently disclose to its customers that the banking giant planned to report the taxable value of the American Airlines miles to the Internal Revenue Service. The primary plaintiffs asserted the accumulation of frequent flyer miles does not constitute reportable income, as well as claimed Citibank placed too much value on the frequent flier miles for tax reporting reasons.
Romanov and Hirsch alleged in the class action lawsuit that not only are frequent flier miles not taxable, the valuation of the frequent flier miles by Citibank at 2.5 cents for every mile is “grossly unfair and deceptive.”
The terms of the class action settlement require Citibank to set up a $1.75 million fund that distributes to eligible class members. Hirsch and Romanov receive incentive awards as primary plaintiffs, and part of the settlement fund also pays court costs and attorney fees. Despite agreeing to the class action settlement, Citibank continues to deny the allegations. The company settled the class action lawsuit to avoid the high costs of litigating a protracted civil trial
What You Need To Know About The Citibank American Airlines Miles Promotion Class Action Settlement
Eligible class members of the Citibank class action settlement include “all persons or entities in the United States who received an IRS Form 1099 from Citibank as a result of opening a Citibank deposit account and receiving American Airline miles through Citibank promotions in which Citibank valued the American Airline miles at 2.5 cents per mile, during the period between January 1, 2009 and July 13, 2017.” Class members have until October 11, 2017 to opt out of the class action settlement or dispute any of the agreement provisions. The potential award has a cap of $245. Court documents state class members might qualify to receive a payment up to 70% of the income attributed to the earning of American Airlines frequent flier miles.
Class members must submit a valid claim form by November 27, 2017. The judge presiding over the class action settlement case Bertram Hirsch, et al. v. Citibank NA, Case No. 1:12-cv-01124-DAB-JLC, in the U.S. District Court for the Southern District of New York has scheduled the final hearing on January 31, 2018. Learn what transpired at the final hearing by visiting the class action settlement website www.HirschAirlineMilesSettlement.com. The class action settlement website also presents the list of class and defense counsels, as well as updates concerning the potential award.
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