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American Express Co. overbilled cardholders for travel insurance and failed to refund unnecessary insurance fees for more than 12 years, according to a class-action lawsuit unfolding this week in Alameda County Superior Court in Fremont, Calif. Max Folkenflik, managing partner in the New York-based law firm of Folkenflik & McGerity, filed the case against AmEx in 2001, alleging that American Express Travel Related Services billed cardholders for hundreds of millions of dollars of unnecessary travel premiums and failed to clearly explain how cardholders could reclaim them. American Express charged cardholders for the full price of travel insurance for an airline ticket, even for minor transactions such as an airline seat upgrade or a baggage fee, Folkenflik tells CardLine. "Many of these charges were relatively small, but they add up to millions of dollars of cardholders' money that AmEx has kept," he says. Although AmEx claims cardholders can easily get their money back for travel insurance, Folkenflik says that previously it was "only if you followed a special procedure that was not clearly spelled out in AmEx's contract." Folkenflik hopes to collect millions of dollars in damages on behalf of cardholders who overpaid travel insurance fees between September 1995 and February 2008. According to Folkenflik, AmEx changed its travel insurance contract language after he filed the lawsuit. AmEx attorneys are expected to give their opening statements when the non-jury trial before Judge George Hernandez continues next week. AmEx said in a statement that it has a system in place enabling cardholders to easily receive refunds when they did not receive the benefit of travel insurance and that its travel insurance is a very popular product its customers voluntarily choose.
