Be Cautious: Avoid Being Misled by Services Claiming to Assist with Class Action Settlements
Class action settlements for consumers are not uncommon. It is likely that most reading this post have been a recipient of at least one letter stating that they are part of a class and can collect some amount from a settlement. One such class action settlement recently shed light on an issue for those figuring out what being part of such a settlement means: namely, how to best collect on what you are owed from the class settlement. In October, 2024, current and former NCAA athletes, represented in a class, received preliminary approval of a $2.7 billion settlement that was intended to address claims that NCAA rules barring payments to athletes violated U.S. antitrust law.
Unsurprisingly, the large amounts of money involved in class settlements, such as the NCAA antitrust settlement, can draw third parties that seek to take some of that money for themselves, including some that do so through fraud or misdirection. Typically, those third parties offer to “help” class members obtain a share of the settlement funds for a fee. The reality, however, is that those third parties generally do nothing for the class members that the members could not have done for themselves for free. In the NCAA antitrust settlement, the plaintiffs’ attorneys specifically urged the court overseeing the case to order those kinds of third parties to make clear that their services are not required to receive a share of the settlement. But not all classes are represented by attorneys that will seek protective orders, so it is important that anyone finding themselves part of a class action settlement understand what is and is not necessary to obtain their share of a class action settlement.
Here’s how you can protect yourself and others from these deceptive practices:
1. Understand the Class Action Settlement Process
The settlement process is designed to be straightforward. You do not need to hire an outside service to claim your share. The settlements will typically be explained in plain terms in official letters or emails received from the plaintiffs’ attorneys and/or the court overseeing the case. The terms will also generally be shared online at websites created specifically for the settlement. Any notice would also typically not be the first you have received as the rules for class actions generally require notice of proposed settlements, so class members should look for notices of settlement to come from the same senders. Following the guidance provided in the notices should enable class members to obtain their share of the settlement.
2. Beware of Misleading Services Some companies may claim that their services are necessary to secure your settlement funds. That is not true. These services often charge unnecessary fees for tasks that you can easily complete on your own or with the help of the official settlement administrators. Most commonly, there will be online forms you can fill out on websites dedicated to the administration of the class action settlement.
3. Verify Information with Official Sources
Always verify any information you receive with official sources. Class members with questions about the settlement can and should contact the attorneys for the plaintiffs in the case. Those attorneys should represent the class members’ interests and be required to provide accurate and clear information as to how to best obtain a share of a class settlement.
4. Look Out for Red Flags
Be cautious of any service that:
- Requests upfront fees tied to or a percentage of your settlement.
- Claims to have special access or influence over the settlement process.
- Uses high-pressure tactics to get you to sign up.
5. Seek Legal Advice if Unsure
If you are still unsure about any service or claim, seek legal advice. Consulting with a qualified attorney can help you navigate the settlement process without falling victim to scams.
6. Report Fraudulent Activities
If you encounter any fraudulent activities or misleading claims, report them to the appropriate authorities. If class members are repeatedly bothered by third parties that are trying to convince class members to use their services to collect on the settlement, those class members should also not be afraid to contact the plaintiffs’ attorneys and request that they ask the court to step in and limit misdirection.
By staying informed and cautious, you can ensure that you receive your rightful share of the settlement without unnecessary costs or complications. Remember, the official settlement process is designed to be accessible and straightforward, and you do not need to pay for unnecessary services.
