How to Tell If That Class Action Settlement Notice Is Actually a Scam

How to Tell If That Class Action Settlement Notice Is Actually a Scam


Getting free money is on everyone’s wish list, so it’s a banner day when you wake up to an email or a letter in the post announcing that you can submit a claim as part of a class action lawsuit against a corporation or organization. Getting paid for harm you can’t even remember suffering in exchange for filling out a form is a pretty good deal and a nice surprise.

Except, like everything else in this world, sometimes a class action settlement notice is not, in fact, a class action settlement notice. Instead, it’s a scam. And an effective one, because you usually aren’t aware of class actions until you receive that notice, and they do usually come from random law firms you’ve never heard of. So how can you tell whether you’re about to receive a tiny sum of money or have your personal information stolen?

One reason it’s hard to tell at a glance if a settlement notice is real is the nature of class action lawsuits. Unless you’re one of the people bringing the lawsuit, you’re likely not even aware it’s happening. A class action is organized by the courts when harm is potentially inflicted on a large number of people collectively. Instead of working on hundreds or thousands (or hundreds of thousands) of individual lawsuits, the court allows attorneys to collect everyone into a “class” that sues collectively. This usually comes with the requirement that attempts be made to identify everyone potentially affected (like you!) in order to equitably distribute any settlement or judgment monies resulting from the case.

That’s how you can be the recipient of a settlement from, say, Oracle America, Inc. even though you have never knowingly dealt with Oracle. It’s the “knowingly” part that matters—if the lawyers working on the case find your name somewhere in the paperwork, they’ll send you a notice so you can submit a claim and register as part of the class. It’s usually not a lot of money—the average class action payout is just $32. But it takes a few minutes to fill out an online form, so $32 isn’t bad.

Unless it’s a scam.

How to identify class action scam settlements

If you receive a class action settlement notice, especially if it’s an email, there are a few things that can tip you off that it’s a scam:

  • It’s vague. Most class action settlement notices are pretty dense and boring—they’re written by lawyers, after all. These notices are typically required to give you all the info around the lawsuit, the parties involved, the proposed settlement, and how you can submit your claim. If it instead uses language about “a lawsuit” or class action you’re involved with but doesn’t offer up specifics, it’s likely a scam.

  • No search results. Try searching the people and organizations mentioned. If you can’t find a website for the law firm, or the firm’s website doesn’t list the attorneys who have supposedly sent you this notice, that’s a big red flag.

  • Huge payout. Typically, settlement notices don’t mention specific sums for claimants because while they know the total settlement amount (and the amount reserved for attorneys’ fees), they can’t know how much each claimant will get until they know how many claimants there are. So if the notice mentions a big number, it’s probably there to hook into your greed and get you to rush to give away all your personal info (or worse).

  • Time pressure. All settlement notices have a deadline for submitting a claim, so just noting that you have a limited window to jump in isn’t a red flag. What is a red flag is any pressure to move quickly. The notice should be agnostic about your participation in the suit—it’s merely giving you information, not pushing you to get that check.

  • Weird links. Finally, a universal sign of a scam is links that don’t go directly to recognizable URLs, like a law firm’s main site or a special site set up for the class action. While you should double-check any URL you visit and never click on a link in an email or text (instead, go directly to the law firm’s site to find links there), if the notice contains any shortened URLs or incongruent websites, hesitate—and do your research.

Verify any class action settlement claim

Don’t be pressured or tricked into submitting a claim for a class action settlement. Looking for signs of a scam is a good best practice—but so is taking the time to check into the details yourself. A few extra steps to take:

  • Search on the class action itself to verify it’s real, or go to sites like ClassAction.org or Consumer-Action.org to get more information. If you can’t find the suit, or it looks like it was finished years ago, it’s a scam.

  • Search on all addresses and emails in the notice. If they don’t match what’s in the notice, be very suspicious. As one person discovered, the address listed in a scam settlement email they received was actually for a Staples office supply store.

Once you’ve done all this diligence, you can go ahead and claim your settlement check—hopefully all this effort was worth an average of $32.



by Life Hacker