Passengers sue United claiming kickbacks doubled the cost of travel insurance

Travelers have jumped on board a class action complaint aimed at United Airlines over claims that the company pockets an illegal kickback from third-party insurers featured on its website. 

The consumers claim they would not have paid the artificially inflated travel insurance prices of Allianz or the Travel Guard Group had they known that the airline negotiated an illicit brokerage fee with the sellers, according to the complaint filed Sept. 20 in the U.S. District Court for the Northern District of California.

“At no point does United disclose to consumers that it receives a commission or kickback every time a customer elects to purchase travel insurance, or that the consumers are funding this kickback,” wrote plaintiffs lawyers from Glancy Prongay & Murray in Los Angeles and Levi & Korsinsky in San Francisco. “At no point during the class period did United disclose to plaintiffs, or any of the class members, the true nature of its relationship with Allianz or the Travel Guard Group or any other entity that is associated with the travel insurance offered on United’s website.” Plaintiffs Diana Vallarta of San Jose, Calif., and Lisa Salmons of Stamford, Conn., brought the class action claims over travel insurance they purchased within the last three years. The lawsuit follows a 2018 report from Sen. Edward Markey (D-Mass.) that claims travel insurance kickbacks have become an illegitimate, consumer-funded “profit center” for the airline industry. 

Illegal kickbacks to United

Arguing that United misled them into fronting the cost of an illegal kickback, the customers are suing for unjust enrichment, violations of the California Unfair Competition Law and violations of the Connecticut Unfair Trade Practices Act. 

The complaint asserts that United has repeatedly prompted future passengers to purchase insurance with statements such as don’t “ignore the unexpected” and “The top 4 reasons you need travel insurance.” Customers must accept or deny a policy before purchasing tickets online, write Rosemary Rivas and Kevin Landau of Levi & Korsinsky and Marc Godino of Glancy Prongay. The plaintiffs lawyers did not respond to requests for comment at the time of publication. 

During checkout, the complaint alleges that United represents the third-party insurers as the “sole-recipients” of the travel insurance fees, without noting the payments United gets from the transaction. According to the complaint, the partnership between United and the insurers means customers pay more than they should.

“Indeed, travel insurance is available on the open market that is less expensive than the insurance offered on United’s website, and often provides superior coverage, in part because the open-market insurance doesn’t include any illegal kickbacks to United,” the plaintiffs attorneys write. “For example, United’s Travel Guard insurance is nearly twice as expensive as comparable — if not superior — plans that are otherwise available to consumers.”

United did not respond to a request for comment. 

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This article first appeared on sister-site Law.com.