JetBlue and Delta Accused of Getting Kickbacks for Selling Travel Insurance

JetBlue and Delta Accused of Getting Kickbacks for Selling Travel Insurance

Two of the largest U.S. carriers, Delta and JetBlue, are facing separate class actions. They’re accused of failing to disclose to consumers that they receive payments from sales of travel cancellation insurance promoted on their websites.

According to the lawsuits, the airlines leave consumers “with the false impression that the charge for trip insurance is a pass-through” fee from another entity with which they have no financial interest. Instead, the suits allege JetBlue and Delta receive “kickbacks” for selling these policies on their websites.

The carriers’ sites use eye-catching colors to indicate they recommend that travelers buy the coverage. And you are required to make a selection before continuing with your ticket purchase. The 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 they are getting a cut of the profit.

Moreover, since Delta and JetBlue lack licenses to sell insurance, they can’t accept any payments relating to its sale, according to the lawsuits.

Conclusion

The lawsuit is in its early stages, so it’s not clear yet what will come out of it. You can read the documents in detail here. U.S. travelers spent $2.6 billion on travel coverage in 2016, so many people should be affected by this.

Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.

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