AmEx likely to face class action lawsuit

By Jeremy M. Simon

Credit card giant American Express could have a nationwide class action lawsuit on its hands following the rejection of its right to arbitration by the California First District Court of Appeal, according to law firm David Fried.

The suit alleges that AmEx charged cardholders for travel insurance even if they did not actually go on trips. American Express had promised to charge cardholders an insurance premium "only when you fly."

Following the decision, AmEx will be forced to defend a nationwide class actions related to certain of its travel insurance programs.

AmEx has attempted to make million of cardholders individually arbitrate claims dealing with the company's fee-paid flight insurance programs.

An American Express representative said the financial services form is disappointed with the judge's decision and is presently investigating its legal options.

Published: July 16, 2007

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