Consumer class actions -- cases where plaintiffs purchased a
product or service from a defendant and allege some kind of fraud,
product defect, or other information failure -- have become
ubiquitous. Actions are filed against defendants each week, with
dozens of cases settling each year. Over the past few years, many
large settlements have been reached across a wide variety of
industries, with hundreds of millions of dollars earmarked for
settlement funds each year.
Led by Vice President Dr. Stephanie Plancich, NERA has used
publically available information to create a proprietary database
tracking consumer class action settlements from 2010 to 2013. In
this paper, the authors utilize this database to report on the
characteristics of, and trends in, consumer class action
settlements reached during this period. Based on the data they
collected, the authors observe an increase in the number of
settlement funds established each year. While some settlement funds
consisted entirely of monetary payments to plaintiffs, others
included non-monetary payments "in-kind," such as product
replacements, vouchers, or coupons. Still others included
contributions to charity. Consumer class action settlements were
associated with a wide variety of allegations, including consumer
fraud, antitrust-related claims such as price fixing, false
advertising, or product liability claims.
The authors also observe that, in recent years, there has been an
increasing number of settlements alleging violations of consumer
privacy. These allegations were made across a number of defendant
industries but these privacy cases typically fall into two
categories: cases alleging unlawful collection of personal
information, and those relating to unsolicited SPAM, where SPAM is
defined as unwanted and unsolicited contact via telephone, text
message, mail, or fax.
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