Class action settlements are undergoing increased scrutiny in the courts, particularly concerning claim rates and the efforts to stimulate class member participation. In 2019, the Federal Trade Commission (FTC) published a report that found that most consumer class actions have average claim rates of nine percent or less when looking at cases with some form of direct notice.
In many cases, it is up to the settlement administrator to find creative solutions to engage class members. One such solution is to employ the use of unique class member identification numbers, assigning a unique number to each claimant. Collecting and using class member contact information allows an administrator to accomplish claims stimulation in a variety of proven ways.
How Do Class Members IDs Work?
Closed Class
In some settlements, class member information is known and direct notice to those class members is possible. This allows an administrator to prepopulate claim forms with known information and to protect those forms behind unique identification numbers.
In this scenario, identification numbers are sent directly to class members for use on the settlement website. Once a class member enters their unique number, a prepopulated secure form will appear and allow them to edit their information and input any other information necessary to file a claim. A good settlement administrator will implement safeguards to protect against potential fraud and simplify the claims review process, saving time and money.
This method serves as a smoother and more efficient process for class members by allowing for any corrections to their information (i.e., if someone’s address, email or phone number has changed).
Open Class
An open class means the contact information for class members is unknown. This is common in large consumer settlements, where the class members have purchased a good or service from a retailer.
When class members see the notice of settlement, they are invited to visit the settlement website to register for a claim number. Basic information, such as name and contact information, is collected through a simple form and stored securely by the settlement administrator.
Once the registration is complete, class members receive a unique identification number through the email address they provided at registration. This ensures that the settlement administrator has a verified working email address for the claimant. The next step is for the class member to use that identification number to file their claim on the settlement website.
Partially Closed Class
There are settlements that come with some class member information but not all of it. In situations where the defendant sells both directly and indirectly to consumers, the class member data will likely only contain information for consumers to which the defendant sold their product or service directly.
These cases can use unique class member identification numbers in both ways described above, securely collecting accurate information from unknown class members and creating an efficient process for known class members. Both scenarios allow for greater claims stimulation efforts through further notification and follow-up.
What Are the Benefits of Using Class Members IDs?
Registering for a class member ID is simple and allows the settlement administrator to collect accurate contact information for class members, aiding in follow-up and claims stimulation efforts.
This method demonstrates to the court that the administrator can follow up with class members who filed for the ID but did not file a claim, with simplified email notices that garner higher engagement. In addition, it allows for further follow-up regarding objections or when payments are released. In short, the ability to send multiple case-specific communications to class members increases engagement. In a recent consumer product liability settlement, sending a reminder to file a claim to registered individuals resulted in a 10% increase in the number of claims filed.
When a verified email address is collected, it can be used for cost-effective follow-up communication with the claimants, including:
- Reminders to complete the claims process
- Confirmation of claim receipt, processing, approval or denial
- Requests for additional documentation
- Notification of any delays in the court proceeding
- Notification of distribution
Often, claims stimulation strategies include costly retargeting advertising campaigns. Using class member IDs allows administrators to reach back out to class members using contact information collected in the beginning and makes retargeting more efficient and less expensive.
Is the Class Member ID Process Secure?
The same data security measures applied to claim forms are applied to the data collected in the registration process. It is also important to adhere to all state and federal privacy guidelines.
