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JetBlue Airlines to pay $500 million to settle allegations of fraud

JetBlue Airways is settling a federal civil fraud lawsuit over the way it handled its credit card processing, the company said Friday.

The company said it will pay $250 million to a whistleblower, a total of $500,000 to settle the civil lawsuit and will pay another $50 million to the whistleblower, which is to come “over the course of the next several months.”

The company has been under pressure since a series of lawsuits revealed that JetBlue was paying some cardholders more than the actual cost of processing their cards.

The settlement follows the Justice Department’s civil fraud investigation into the airline, which has resulted in more than $300 million in civil penalties, restitution and fines.

In January, the agency charged that JetStar manipulated data in order to underpay some card holders.

In response, JetBlue said it had implemented an aggressive fraud detection and reporting program and said it has paid more than 7,000 cardholders in the past three years.

The government has not named any individual or companies as defendants.

The company also acknowledged that it paid less than it was owed in a civil lawsuit filed in 2012, but said it made significant improvements since then.