Preparing for Class Action Settlements Picked Up by Media

A viral media story can throw a wrench in your plans for a seamless class action settlement process if you’re not anticipating it. Large data breaches and highly charged consumer cases are particularly likely to go viral due to class sizes and the emotional connection for class members.

While elevated media coverage certainly works well to inform class members of their rights and ability to make claims, the negative results are often unanticipated. Consider what happened to one large beverage brand. After a news article ran on the ABC Newswebsite, it was subsequently picked up by Huffington Postand Fox News. The escalation of media coverage prompted approximately 700,000 claims and more than $31 million in requested reimbursements, which was significantly more than the settlement fund. Pro rata awards ended up being one tenth of what was estimated. Similarly, in another large consumer case, when the media picked up the story that you could get $10 without any proof of purchase, the sheer volume of people going to file a claim brought down the settlement website for two days. 

In addition to a reduction in benefits for bona fide class members or overwhelmed websites, heightened media coverage can bring other unintended consequences such as more fraudulent claims, more objections to the settlement, overwhelmed call centers with long wait times, and more expense in the settlement administration.  It is important to be aware of these potential challenges, especially when using social and digital media as a mechanism to notice the class. Today’s social media’s prevalence makes the opportunity for going viral even greater.    

Heffler Claims Group works with counsel and defendants to prepare for a potentially high volume of media coverage with a few smart steps:

Use Plain Language in Your Notice and on the Website

While this is common sense and best practice for most, it bears discussion as it is important to clearly inform class members about what the settlement is about, who is considered a class member, and what their rights are in plain language and not legalese. As most class members are not lawyers, communication with class members and any notice or information packets sent to them should be easy to understand. If a settlement hits the media in a viral way, plain language communications will cut down unnecessary communication between class members and the settlement administrator or counsel, saving time, resources, and money.

Claimants often want to know how much money they can potentially receive at the conclusion of the settlement. Of course, this varies widely depending on the type of claim, financial losses, liability issues, and the volume of claims. If possible, provide the best estimate for the class member benefit in plain language on all notices and the settlement website. Often an estimated range for payout is best used especially when there is to be a pro rata distribution. When the benefit is non-monetary — such as a discount on merchandise, product voucher, or debit card – clearly explain the benefit conferred on the class to avoid disputes and appeals as well as any restrictions such as transferablilty or expiration.  

Stress-Test Your Settlement Website

If you are offering a website and an online claim form, adequately stress-testing your website before launch is imperative. In the examples above, the beverage brand’s website was not prepared for the surge in traffic, which decimated the administrator’s servers (not Heffler), leading to days of the website being down and additional expense. All of this might have been avoided by partnering with an experienced class action settlement administrator who prepares for the unlikely.

Websites need to be monitored and equipped with alerts to warn of overextended bandwidth. They must also have a fail-safe plan that can accommodate a spike in traffic should your case suddenly go viral. As a general rule, any class action website should be fast and easy to navigate, so that people can visit and find exactly what they need without dealing with long page-load times and downed servers.  

Managing Fraudulent Filers in a Viral Settlement

Once a case goes viral, fraud becomes a more prevalent issue, especially when there is a simple claim process. Many of the steps below apply to every case but are very important when anticipating a viral settlement. 

• Designing an efficient electronic claim form: Including required fields, questions that point to the validity of purchase if proof of purchase is not required, and purchase information specifications makes claim validation run smoother, especially when dealing with large amounts of claims at once during a viral settlement. Having the same required fields for every claim makes it easier to scan through and identify duplicate entries. These steps also help ensure the contact information is complete and accurate at distribution time.

• Taking proactive steps to prevent fraud: Today many settlements require email information.  Checking to make sure it is a valid email address from the onset of the claim’s process’ preserves true claimants. Work with your settlement administrator to determine whether steps such as requiring claimants to verify their email address with a unique code are necessary. Steps like that allow you to remove electronic bots or fraudulent email usage from the picture. 

• Specify a household cap: If relevant, consider including a household cap on claims. Sometimes class members trying to make fraudulent claims attempt multiple filings from people who may or may not be part of the same household, all tracing back to the same physical mailing address. It can be helpful to have a household cap to prevent multi-filers where documentation isn’t required to make a claim.

Work with an Administrator Who Can Staff Quickly and As Needed for Large Volumes

If you anticipate your settlement going viral, you need is to make sure your administrator can scale to handle the size and volume of calls and claims quickly. This is much harder to do with an administrator who outsources much of their back-office work or claims processing, especially if that outsourcing is overseas. Scalability, while remaining in control of the resources and staff, is key to keeping everything organized and efficient. 

Heffler Claims Group, a division of global advisor Duff & Phelps, has more than 50 years of experience administering class action settlements, including many that have gone viral. When the tidal wave of traffic hits your website after a surprise media announcement, you’ll want to work with a company that has administered some of the highest volume cases in class action history. Contact us today to learn more about all of our class action administration services.