American Express Co. customers were charged hundreds of millions of dollars for travel insurance that was never provided, attorneys for cardholders told a California judge Tuesday.
The New York company is accused in a lawsuit of overbilling for travel insurance premiums and failing to refund insurance fees when customers canceled flights, according to Max Folkenflik, who is representing cardholders in the suit.
In opening arguments at a nonjury trial in the Alameda County Superior Court in Fremont, Mr. Folkenflik asked Judge George Hernandez to rule that Amex failed to show clearly how customers could reclaim insurance premiums and should not be allowed to keep the fees.
"The agreement provides that you paid for something, and you get it," Mr. Folkenflik said. "The agreement is not a provision of sharing wealth with American Express and allowing it to keep money that doesn't belong to it."
Joanna Lambert, an Amex spokeswoman, said it has "a robust system in place to allow a refund to be easily obtained by any cardmember who is charged a premium and then subsequently does not receive the benefit of the insurance."
Amex's attorneys will give their opening statements later in the trial.
The case, Hoffman v. American Express Travel Related Services, was filed in 2001.
The plaintiffs allege that Amex charged for insurance on all airline-related transactions above $45, such as itinerary changes, baggage fees, and seat upgrades, when it should have charged the fees only for airfare purchases.