3 Things to Know About Getting Money From Class-Action Lawsuits

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A few years ago, I received a notice about a class-action lawsuit against the company that manufactured my car.

It told me to fill out an online form to be part of the suit, so I did, but I figured nothing would come from it. But a year later, I got a check in the mail for $350. Taking a few minutes to fill out a simple form netted me a decent windfall. It was the easiest money I’ve ever made.

My experience isn’t uncommon. At any given time, there are hundreds of class-action lawsuits going on. Chances are you could have a claim in one or more of them and get some extra cash.

What is a class-action lawsuit?

Anyone can file a lawsuit against a company, but it’s expensive and time-consuming. A class-action lawsuit can be an easier and cheaper approach.

In a class-action lawsuit, a group of people with similar injuries or damages caused by the same product or company sue the business as a group. Class-action lawsuits happen across all kinds of industries, from food and pharmaceuticals to automobiles and apps.

According to Paul H. Cannon, a personal injury and products liability attorney with Simmons and Fletcher, the value of each lawsuit can differ.

“Class actions vary widely,” said Cannon. “Some of them may result in the claimants receiving hundreds of thousands of dollars, while others result in a rebate or coupon. There are many going on that a person could qualify for and never even realize it.”

How to take part in a class-action lawsuit

Through class-action lawsuits, you could get anywhere from a few cents to a few thousand dollars. The hardest part is finding out about the current lawsuits.

If a class-action lawsuit occurs, you should receive a notification through the mail. If your address changed, you can also find lawsuits through sites such as Consumer Action, ClassAction.org, and Top Class Actions, along with instructions on how to submit a claim. It’s a good idea to check regularly, as new lawsuits are filed all the time.

“When a class action begins, the court requires the company to send out notices to all of the potential class members,” said Cannon. “The company will then identify all of the people it did business with during the time their product contained the defect that initiated the class action.”

The notice form will tell you what you need to do to file a claim. Often, you’re automatically submitted. Others require you to submit more information to proceed, such as the year, make, and model of your car in an automobile manufacturing lawsuit. You might also have to submit documentation proving your purchase, such as a receipt.

Not all lawsuits require proof. Some need you to sign a sworn statement stating that your claim is legitimate. Before submitting a claim for every lawsuit, keep in mind that lying is considered perjury and is a serious crime with significant consequences.

If the suit is settled, or the court rules in favor of the plaintiffs, you’ll receive a check in the mail.

3 things you should know about class-action lawsuits

Although a class-action lawsuit can be a way to earn extra cash, there are some things you should know before proceeding.

1. You likely won’t make thousands

Lawsuits can range in value. Depending on the suit, the product involved, and how many claimants are part of the suit, your portion of the settlement could be a few thousand dollars or just a few cents.

For example, if you purchased Flaxmilk, you could be eligible to receive up to $32.50 because of deceptive marketing practices. Although that’s nice extra money, it’s certainly not a huge windfall. You can’t count on this money to pay off your student loans or establish a retirement fund.

2. You won’t see results for months (or even years)

Don’t make plans to spend your lawsuit settlement before you get a check. According to ClassAction.org, most class-action lawsuits take between two and three years to resolve. Some can take much longer.

3. You lose out on the ability to sue on your own

The most important thing to keep in mind is that participating in a class-action lawsuit — and not specifically opting out — means that you give up the right to sue on your own. In some cases, it can be a worthwhile decision, but it’s dependent on the severity of your case.

“Whether or not a class action is beneficial to you depends upon the extent of the harm done,” said Cannon. “One of the big benefits of class actions is that many small-value claims that would cost too much to bring on their own can be brought together and the costs get disbursed across the cases.”

A class-action lawsuit allows you to bring a case forward that would otherwise be cost-prohibitive on your own. But in more serious cases, such as in the case of serious physical injury or even death, it might be worth hiring your own attorney.

Finding legal help

If you need help deciding whether a class-action lawsuit is right for you, consult an attorney. If you need help but can’t afford to hire an attorney, learn about four ways to pay for legal aid.

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.