Even though “class-action lawsuit” is three words, it sounds an awful lot like the words “free money.” But how should you respond to class-action lawsuits?
A Clark Howard Podcast listener whose family receives many class-action lawsuit notices asked a similar question. Let’s explore the topic a bit more and get money expert Clark Howard’s take on the matter:
Class-Action Lawsuits: Should You Respond?
We can certainly understand the allure of such offers. At Clark.com, we’re all about ways to find money to put back into your wallet. But are class-action lawsuits worth it?
Class-action lawsuits are lawyer-driven correspondence that could potentially take up a lot of your time just to see if you qualify. Depending on the type of class-action lawsuit, you’ll typically have to submit a claim form online or mail it to show:
- Proof of purchase (although no proof of purchase is becoming more common)
- Proof of losses/damages
- Proof of injuries
Even slight deviance from the listed instructions could potentially disqualify your claim, making the effort and time you put into it all for naught.
Clark’s Take on Class-Action Lawsuits
While it’s understandable that you may have concerns about the legitimacy of solicitations that offer financial gain, Clark says that many of these letters are legit.
“Usually these legal notices, I would say, almost always are completely legit that you receive. The problem is what you’re going to get for them.”
Clark says he’s even gotten a few of these himself: “The last one I got was for $1.10. … It won’t even buy me lunch at Costco.”
Clark is onto something here. While it’s true that some Illinois Facebook users received checks of nearly $400 related to a class-action settlement, it’s more likely that you’ll qualify for the ones that pay out paltry amounts.
ClassAction.org has a list of ongoing class-action settlements that estimate payouts ranging from single digits to thousands of dollars. But again, you have to qualify and be meticulous about following the instructions.
For the most part, Clark says filling out information related to a class-action lawsuit may not be worth it when you consider the low payouts.
“This is an area that really has not worked out for consumers,” Clark says. “It worked out well for class-action law firms.”
As for whether the notices are actual scams, Clark says that’s not usually the case.
“They are not generally bogus, I’m not aware of any that have been bogus. But don’t believe you’re ever going to have enough money even to buy a meal for yourself.”
Tired of getting solicitations filling your mailbox? Read our guide on how to get rid of junk mail.