Tag Archives: class action

What Happens to Unused Class Action Settlement Money?

Justice

We often hear about bigtime class action settlements, the ones with millions of dollars set up in trusts and application processes to benefit from. Like the $325 million Apple antenna lawsuit, or the recent $3 million Nutella settlement. In these types of settlements, the number of people affected by them (the “class”) is unknown, so the settlement money is put into a fund and a time period is given in which class members can sign up to receive some of the money from that fund. The total settlement award that we read about in the papers, however, is actually an upper bound. That’s the limit — once it’s reached, it’s hard cheese for any more people who want to benefit. Very rarely is the full amount given out. More often, the upper bound is not reached and some money is left sitting in the trust. What happens to this money?

Verizon Settles Class Action “Cramming” Suit

The typical result on a phone of a cramming charge.

In college I recall a time when a friend pranked another friend by secretly signing his cell phone up for one of those “joke a day” text message spam services. We got a laugh as he received these texts from an unknown number with terrible jokes, and he canceled the service as soon as possible after an understandable period of confusion followed by rage. Not before he was billed a $10 “subscription fee” from the third party company, though. Today I learned that this practice is called “cramming” and that, unfortunately, this type of thing happens to people all across the nation, sometimes by accident and sometimes billed monthly for years undetected, incurring unnecessary high costs. Some bad news, then, for the bad joke aficionado: today, a class action lawsuit against the fraudulent billing has been settled with Verizon. The company has agreed to refund 100% of all unauthorized third-party charges from April, 2005 through February, 2012. Considering the time period and number of people affected, the total cost of this settlement could be in the millions. Also, billing practices will be drastically changed to prevent this kind of charge from showing up automatically and unexpectedly in the future. Read the full press release here. To find out if you’re eligible for a refund and how to claim it, visit the settlement’s website here starting March 9th.

I long for the day when unsolicited text message services are no longer active at all. Sometimes late at night or during low-advertisement-cost programs, you can find ads for the companies selling cheesy ring tones or backgrounds or a “love calculator” that uses an arbitrary algorithm to add up two names and spit out a percentage (with a charge-per-use business model — real classy). They tread the border between the merely tasteless and the scam — hopefully this settlement will encourage the other telecom companies to follow suit and sound the death knell for these services. If I never hear the “Crazy Frog” again, I’ll be a happy man.

Apple Reaches $375 Million Preliminary Settlement in iPhone 4 Antenna Dispute

Smart phone

In 2010, Apple release its much-hyped iPhone 4, the latest in the succession of popular smart phones. Early users soon found that the phone suffered poor reception when held normally due to the ill-chosen placement of the phone’s internal antenna. When notified of the flaw, Apple offered the stale solution of “holding the phone in a different way”. Users scoffed at the lame response, as reception was only lost when holding the phone in the usual manner, which has been the norm of cell phone usage for decades. Incensed users brought the company to a class action lawsuit, alleging consumer fraud in that the company misrepresented the device’s ability to function in order to increase sales.

The terms of this settlement apply to any purchaser of the iPhone 4, which early numbers indicate may be 25 million people. If you are eligible to benefit from this refund, Apple is obligated to contact you via email by April 30th, 2012. After that, purchasers have 120 days to claim their refund. If you have not been contacted by April 30th and think you are still eligible, contact Apple’s customer service.