I Got a Class Action Notice – Is This a Scam?

Most of us have probably received a letter in the mail (how quaint!) or an e-mail notifying us that we’re covered by a class action lawsuit settlement and entitled to some money. And, if you’re like I was, you assumed whoever sent this to you had made a mistake or was trying to put one over on you. Is our paranoia justified?

…Unlikely.

Hey Buddy, I Never Sued Anyone!

No, you did not! However, if you received a class action notice, someone probably sued someone else on your behalf. This stuff isn’t really taught in school; most of us don’t understand how class actions work. You generally (the exceptions are mostly wage & hour cases) don’t “join” a class action. In fact, that is sort of the point.

If you were potentially affected by whatever the class action was about, like a company mislabeling ingredients on its juice boxes, you are automatically a “class member.” If the class action settles, you are entitled to a portion of that settlement. You bought that juice! The goal is efficiency, so it’s one lawsuit on behalf of lots and lots of people. It’s just that those lots and lots of people don’t always get notified ahead of time.

I Got a Settlement Notice. How Do They Know I Bought that Juice?

The lawyers suing the juice company will likely work with a settlement administrator to identify and contact the people who are affected by the lawsuit. Settlement administrators specialize in getting this information to the people who need it, and one way they accomplish this is by using purchase records or other documentation from the company being sued. In a settlement notice, there should be instructions on how to claim your part of the settlement. A lot of times, you go to a certain website and fill out a form.

What Are They Going to Do with That Information?

Use it to send you a check or a coupon. That’s it.

I Don’t Want Any Part of This!

Ok! The notice should tell you how to opt out of the lawsuit or settlement, but most people should only do this if they wanted to file their own, separate lawsuit. If you have an ethical qualm about the litigation, it would be best just not to claim your part of the settlement, since opting out doesn’t really affect anything.

More information on this, and many other topics related to class action litigation, can be found in our Learn section.

Related Article: What Is a Class Action Notice?