A class action lawsuit is where a group of people sue a company. If a company wrongs you on an individual level, you can sue them yourself. When the company wrongs many people in the same manner, instead of suing the company as an individual, those individuals come together to sue in one massive case. Often class action lawsuits stem from an individual being wronged, and it being discovered that many people were impacted in the same way.
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Class Action Lawsuit Settlements
A majority of class action lawsuits are settled with the entire class, meaning that a settlement is reached and the individuals within the class agree to the settlement proceedings. If an individual does not want to be grouped in with the settlement because they believe they have a strong enough case to sue the company alone, they must opt-out of being in the settlement.
These settlements are massive sums of money ranging into the millions of dollars in total. A large chunk of the settlement pays for the lawyers involved in litigating the case, and what is left goes into a settlement fund.
Getting Settlement Payment
To receive a payment from the settlement fund, there is a period of time set up where you must come forward and claim to be in the settlement class. Most class action suits have settlement have websites set up to make the claims process easier. Settlement payments can range from a few dollars to significant sums of money depending on the case, the company, and the settlement agreement.
How to Profit from Class Action Suits
Whether you know it or not, you have likely been part of a class that took a settlement from a large company in the last several years. If you regularly spend money with large organizations (grocery food companies, lawnmower companies, insurance companies, etc.) then you have probably purchased a product that a company has been sued over. You just didn’t know it.
Here’s how to make sure you get your fair share:
1. Stay informed of your class action rights
To make sure you don’t miss out on a settlement, you simply need to be kept aware of your rights. All settlements have a specific period of time open for impacted members to apply for a settlement claim. If you aren’t aware there is a settlement to claim against, you’ll never make a claim and you will miss out on the “free” money available to you as a member of the impacted class.
2. Check settlement suit websites
So how do you stay informed of open suits? The easiest way is to search for a class action lawsuit website that collects all the information from all the major suits. Instead of having to think of all the companies you do business with on an annual basis — hundreds if not thousands of them — you can go to one or two sites to see which suits are open and see if you had purchased the product recently.
3. Submit appropriate settlement claims
Once you find a settlement that you are piece of, simply follow the instructions to file a claim against the settlement fund.
An Example Class Action Suit That You May Be a Member Of
There is currently a class action lawsuit against Kellogg’s for claiming their Rice Krispies and Cocoa Krispies boosted a person’s immune system while not having tested to validate those claims. The company isn’t admitting to any fault, but has agreed to settle with a $2.5 million settlement fund. To be a member of the settlement you must have purchased Rice Krispies or Cocoa Krispies between June 1, 2009 and March 1, 2010. You can receive a settlement of $5 per box purchased with a limit of $15 total as your claim. Some suits require you to provide proof of purchase, but this suit does not. You simply have to say that you agree under penalty of perjury that you did actually purchase the cereal. If you agree you simply submit your claim, wait until the settlement claim date closes, and wait for your check in the mail.
Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He’s building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, and many others.