Class Action Math

A while ago, I had heard tell of a class action lawsuit where you could get up to $900 if you were a “victim” of the abuse.  What’s the alleged abuse?  Phone calls.  Telemarketing phone calls.  Well, let’s learn a little more about this.  After all, $900 isn’t exactly chump change.

Apparently, some marketing company called a bunch of people representing something about cruise lines and blah blah blah.  They didn’t do something right and now they are getting sued.  So, for each call the company made to you, you could get up to $300, maxed out at $900 for three calls.  Well, this abuse happened years ago, so how would I even know?

Conveniently, the lawyers set up a website where you could search for your phone number and it would tell you if you had been called.  It’s great the marketing company kept call logs because I sure don’t keep track of all the spam calls I get.  Upon visiting the site and utilizing the search, I found out two of my numbers were in the list.  Jackpot!

But, I hate class action lawsuits.  I hate them so much, I’ve actually written a “piss off” letter to one in response.  Let me explain why class action lawsuits suck so much.  I submitted two claims on this one just to gather the information to bitch about this.

I submitted two claims, back to back.  In each case, I got a claim number for my submission.  Safely assuming the claim numbers increased sequentially, I calculated that the number of claims being submitted was 20/minute.  That’s 1200 claims every hour.  My claims were made in August and the cutoff for claims ends in November.  How many claims would get filed?  Too many.  Even taking into consideration that it’s not going to increase 1200 claims every hour (like at 3 in the morning), the point is still valid.

Just like any sweepstakes or lottery, you have to read the rules to determine your chances of winning.  So, let’s look at the pertinent numbers involved in this case.  How much is the payout?  Between $7M and $12.5M.  That will cover 23k to 41k $300 claims.  But wait, there’s fine print.  The lawyers get paid first.  THE LAWYERS GET PAID FIRST.  How much? $4.1M plus expenses plus an extra $500k.  How much are expenses?  No one knows, but it will be five years of expenses by a law firm – you make a guess.  Anyway, now we’re at a maximum of about $2.8M to $8.4M with the numbers we do know.  That will cover 10k to 28k $300 claims.

The number of claims at the time I submitted was growing by 1200/hour.  The money to pay those claims will be exhausted in under 24 hours.  Do you get it?  Four months available to file a claim and the funds will run out in a day.  So what happens then?  Well, everybody gets less money, except the lawyers. EXCEPT THE LAWYERS.

An update was recently posted on the claim site and all claimants were sent an email with the update.  As of October, with a month left to file a claim, over 2M claims have been submitted.  Do I have to do the math?  With a payout fund of $2.8M to $8.4M, that equates to $1.40 to $4.20 per call.  Not $300; less than $5.  And there’s still a month left for more claims.

So, the law firm is getting $4,100,000, plus expenses for five years of effort in this lawsuit and each person wronged gets a few bucks.  I think I’ve made my case.

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