• How the Classmates.com settlement is more than a $2 coupon Wednesday, June 9, 2010

    The Civil Justice Association of California used its blog to complain about the recent agreement to settle a class action suit against Classmates.com for its blatant lies in promoting paid memberships.  You know CJAC…the advocacy group whose board members include BP, a who’s-who of Big Insurance and Big Pharma companies, and the Big Business mouthpiece California Chamber of Commerce, among others.  Which gives you some idea what side of the fence they’re on when it comes to consumer issues.

    Classmates logoAt any rate, CJAC was agitated because the attorneys who brought the case against Classmates.com have requested a fee commensurate with the work they performed, while each individual member of the class will receive no more than $3.  (The headline on the CJAC blog post actually referred to a $2 coupon, but heck, the difference is only a buck, and using $2 makes a better headline.)  Full disclosure:  one of the firms involved is Kabateck Brown Kellner of Los Angeles, and managing partner Brian Kabateck is a vice president of Consumer Attorneys of California; some members of CAOC are on the board of the Civil Justice Research and Education Project, which funds this site.

    The case started after a San Diego man who was registered with Classmates.com (but with limited access to the site because he was not paying a fee) received an e-mail telling him old classmates were trying to contact him.  Of course, finding out who these old classmates were, and why they wanted to contact him, would cost money…specifically, he would have to upgrade to a “Gold Membership.”

    And he did.  That’s when he found out there wasn’t anybody trying to reach him through the website.  Classmates.com had just flat lied about it to get him to fork over the membership fee…for a membership he wasn’t going to buy otherwise.

    The fellow in San Diego thought that was wrong.  And because Classmates.com made the same fraudulent pitch to millions of other people, and more than three million of them plunged for the membership fee, his false advertising claim grew into a class action.

    Most class actions involve consumers who have been wronged but whose resulting losses are quite small…far too small to justify paying what it takes to battle a corporate legal department.  But rather than just say, “Oh, well,” and let the company get away with its behavior because it doesn’t pay to sue them, class actions allow consumers in the same boat to band together with shared legal representation.  It’s more efficient for the legal system—and for the accused company—to deal with just one case with many class members rather than many individual cases.

    Sometimes these cases go to trial.  Sometimes, as in this case, the parties involved reach a mutually satisfactory agreement that requires approval of the court.

    No one who signed up for a “Gold Membership” was out a great deal of money; the cost was typically $9.95 or less.  But whatever the amount, it was taken under false pretenses.  And with more than three million paid memberships resulting, that made it a pretty profitable lie for Classmates.com.  (CJAC’s blog post made a sarcastic reference to filing a class action suit “to fix this monumental problem.”  No reference to how much Classmates.com was raking in as a result.)

    Classmates.com has agreed to reimburse each of those duped members $3, for a total of roughly $9.5 million.  Notice the company still comes out way ahead here, which is why you don’t hear them whining about it.  The $2 coupon CJAC’s blog post referred to in its headline?  That’s a discount on future Gold Memberships for some 100 million people who now have free (limited-access) memberships.  That group of class members is not getting cash because they didn’t pay anything themselves.  The coupons were negotiated as an additional benefit and have nothing to do with the plaintiffs attorneys’ fee request.

    Meanwhile, the class action settlement ensured there will be no more victims of such a scheme.  Would this have happened if consumer attorneys weren’t involved to bring the matter into the legal system?  Would this have happened if that outraged member in San Diego had just called Classmates.com and said, “Hey, this is wrong, cut it out”?  We’re guessing that if the company didn’t have the conscience to avoid this come-on in the first place, it wouldn’t have backed away just because somebody said please stop…not after the tactic had brought in millions of dollars.

    Oh, and one thing CJAC’s blog post didn’t mention, while complaining about the proposed fee for the consumer attorneys?  Nowhere do we see how much the lawyers who represented Classmates.com were paid.  But since they’re working for a company that profited from fibbing to its potential customers, we suppose money is not really an issue.

    –J.G. Preston


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21 Responses to “How the Classmates.com settlement is more than a $2 coupon”

  1. Frob says:

    Nevermind all of the advertising revenue Classmates.com reaped on the web site hits for duped users. Classmates.com got off pretty easy, but that’s better than scot free.

  2. Doris says:

    The email I received today did refer to how much the attorneys will be paid:
    12. HOW WILL CLASS COUNSEL BE PAID?

    Class Counsel will ask the Court for attorneys’ fees and costs to be paid in conjunction with this Settlement. Defendants have agreed not to oppose Class Counsel’s request to the Court for attorneys’ fees up to $1.3 million, plus costs. Costs may include participation awards of up to $2,500 for each of the two Lead Plaintiffs. Fees and costs that are awarded by the Court will be paid by Defendants separately and will not affect your entitlement to benefits under this Settlement. You will not be obligated to pay any attorneys’ fees or costs as a Settlement Class member, nor will any award of attorneys’ fees, costs, or participation awards by the Court reduce the amount of Settlement benefit available to Settlement Class or Settlement Subclass members.

  3. Kelvin says:

    Doris, that shows how much lawyers for the class counsel will be paid. It doesn’t indicate how much the lawyers for the classmates website were paid. I got an email today that the class counsel lawyers will be paid 1.05mil vs 1.3mil.

  4. Matt says:

    “Meanwhile, the class action settlement ensured there will be no more victims of such a scheme.”

    Really? It looks to me like classmates.com admitted no wrongdoing. Heck, I’ve got e-mails in my trash from this year that are exactly like this “1 person from xxx High School class of xxxx has found you again….wonder who they are…”. Clever eh? Seems to imply that someone was searching for me, but we all know that’s not really what happened.

    If anything, this sends a message that lying to get the sale is just fine…just be prepared to pay off the lawyers. There is something wrong with our system when it permits companies to blatantly lie to consumers and it costs [1.05+costs] millions of dollars just to have it end like this (i.e. “here’s a third of what you paid back”).

  5. Linda Newman says:

    This “settlement” is a joke. The actual plaintiffs get only $3.00 each but the lawyers get l.05 million? Ridiculous. Even more ridiculous is the $500,000 to a “charity”. Why not divide the $500,000 among the plaintiffs? It does them no good to have that money going to a charity who has nothing to do with the case and didn’t lose anything. Where is the common sense here?

  6. Ted Frank says:

    It’s funny how lawyers in a false-advertising case are engaging in false advertising. The settlement was not for $9.5 million — it was, according to papers the attorneys filed with the court (but did not disclose to their putative clients) $117 thousand and change. So the attorneys are asking for nine times as much as they got for their clients, all while misleading those clients not to object by telling them the settlement was for $9.5 million.

    But maybe you think it’s okay to fib if you’re a plaintiff’s attorney or one of their supporters, right? The question is whether you’re willing to correct your post and apologize to CJAC and criticize these scoundrels, or whether you’ll find some other rationalization for this rip-off.

  7. Judy says says:

    How come my membership was renewed via my bank account without authorization? DATE: oCTOBER 2010. THAT’S A CRIME!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  8. Evan says:

    Yeah, how about trying to unsubscribe from them! I am having a major problem with this.

  9. ForensicNurse says:

    They’re doing it again! I put one little message on the general area (no membership required) and it sent out notices to everyone in my class saying I was trying to reach them.

    It never stops!

  10. Julie says:

    11. HOW WILL CLASS COUNSEL BE PAID?

    No later than August 5, 2011, Class Counsel will ask the court for attorneys’ fees and costs. Classmates has agreed not to oppose Class Counsel’s request for attorneys’ fees of $1,050,000.00, plus costs. Costs may include participation awards of up to $2,500 each for Anthony Michaels and David Catapano, the two Lead Plaintiffs in this lawsuit.

    If the court grants Class Counsel’s request, Classmates will pay Class Counsel’s attorneys’ fees and costs. This will cost you nothing, and Classmates’ payment will not reduce the $2.5 million it will pay in cash awards to Settlement Class members.

    A copy of Class Counsel’s Motion for Award of Attorneys’ Fees and Costs, including an accounting of Class Counsel’s costs and time spent on this lawsuit, will be available after August 5, 2011 at the Settlement Website (www.cmemailsettlement.com).

  11. BrooklynAlumna says:

    I get emails every week telling me to check who’s trying to reach me. Nothing seems to have changed.

  12. Rowena says:

    They not only use that fishing bait..they also have charged my Discover account twice after I have asked to be billed directly. They should be shut down.

  13. jo says:

    Classmates charged both me AND my husband $39 each WITHOUT permission. They should be run out of business. They duped thousands of people…just Google them and see all the people they screwed.

  14. Valerie says:

    I excluded myself from the current $2.5 million settlement in hopes that another class action lawsuit will be brought against Classmates.com and they will pay a more just fine that does not allow them to keep the profits they made from their fraud.

  15. [...] out the article here: http://www.protectconsumerjustice.org/how-the-classmates-com-settlement-is-more-than-a-2-coupon.html. Note that the website settled to play 3$ for each person who reported that they were mislead into [...]

  16. Jay says:

    I googled myself recently and found all sorts of info I have NEVER published on the web. Traced it back to a ‘reunion’ website that I’ve never heard of, never subscribed to. Traced THAT back to classmates.com. I complained to the BBB and was told, in essence, once your info is out on the web it is pretty much impossible to remove. A pox on classmates.com!

  17. Jj says:

    Lawyers are masters at saying they are defending the victims while stuffing their pockets with the money that should be going to the victim. Very unethical to say the least……

  18. Mary Ann Kampfe says:

    i just tried to unsubscribe and they said the Member Care Team page was not available. What a load of you-know-what. I have been trying to eat out of my membership for a while. Thinking about contacting a lawyer.

  19. Elizabeth says:

    I closed the credit card I had purchased my subscription with to stop them from charging me. I would like to be a claimant if and when class action 2 starts up. These people are thieves.

  20. Peggy M. Hoffman says:

    “Classmates” is fradulently debiting my checking account. The y fraudlently acquired my new debit card number after I deleted the old one because they will not stop billing. I have requested/demanded that they stop billing. The Better Business Bureau has been useless to help me stop “Classmates” from stealing from me. I can not afford, nor should I have to hire a lawyer to sue those thieves! Can anyone help?

  21. Angela Cortes says:

    Well I received my settlement check of $3.93 from the Classmates.com and deposited it into my bank account. I guess to no ones surprise the bank sent the check back. IT BOUNCED and my bank has charged me $8. This is crazy! I want to be reimbursed for the aggravation a check for less than $4 bucks has caused.


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