Should You File a Data Breach Settlement Claim?

Imagine opening your email to find a notice that you participated in a data breach. The message says you are entitled to a class action settlement payment. What do you do after?

With cybercrime as rampant as it is today, this scenario is a reality for many people. If you find one of these data breach class action settlement notices in your inbox, here’s what you should do.

Why did you receive a data breach settlement notice?


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The first thing you can ask about a settlement payment notice is why you received one. If you’ve received one of these letters, it means that a service you’re using has suffered a data breach that could have exposed users’ personal information. One or more people filed a lawsuit against the company, leading it to offer users money to fix the problem.

Just because you received one of these letters doesn’t mean the breach necessarily exposed your data. For example, in the Yahoo data breach lawsuit 2020, anyone who had an account between 2012 and 2016 could join the settlement. Still, it’s a good idea to protect your account by changing your password and still enabling multi-factor authentication.

Sometimes these settlements occur when there is just a risk of a data breach related to deceptive marketing practices. Such was the case in 2021 when Zoom agreed to pay $85 million after lying about offering end-to-end encryption.

How can you be sure the review is genuine?

At first, notices about data breach class action settlements may seem suspicious. After all, the promise of free money sounds exactly like the type of tactics used by phishing attempts. Given the risk of phishing, you should ensure that the review is legitimate before taking any further action.

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Class action attorneys obtain your contact information from company documents while investigating the issue. A cybercriminal can find your email address by browsing the web or reading website visitor data. If you receive a review for a track from a service you don’t use, it’s likely a scam.

If the notice is about something you use or have used in the past, check to see if there was an actual data breach or related incident. If nothing appears, it’s probably wrong. Also, be on the lookout for suspicious email addresses, links, and misspellings, which usually indicate phishing.

What happens if you file a claim?


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After verifying that the review is real, it’s time to consider filing a claim. Often this process does not go the way many people expect.

The legal system is complicated and these class action lawsuits usually involve more than meets the eye. For example, a Consumer Financial Protection Bureau Report found that less than 7% of people who signed arbitration agreements realized that these clauses limited their ability to sue. Since legal proceedings can lead to complications like this, here’s a rundown of what you can expect.

What does the data breach lawsuit process look like?

Sometimes you will receive a notice while the data breach lawsuit is still pending. If it’s a pending case, you don’t have to do anything, and the email just warns you that there might be money in the end. If settled, there should be instructions on how to receive your settlement payment.

In many cases, all you have to do is provide some information. The email will most likely give you a link to a settlement website and a claim number. Enter this number and fill in some personal details to verify your identity and provide the court with a way to send your money to you.

After the court verifies the settlement and your claim, they will send your payment in several ways. You may receive a check in the mail, it may be a debit card, or they may deposit money directly into your bank account.

How long will it take?

The duration of this process may vary. If this is an ongoing case, you can expect to wait at least a few months. In this scenario, you may not get anything because the court may dismiss the lawsuit.

If the case is settled, the wait will be less long but can still take time. The notice you receive should also include a deadline for filing your claim. Since the payout amount often depends on the number of people depositing, you’ll probably have to wait until at least that date to receive your money.

How much money will you get in the settlement payment?

The overall data breach class action numbers certainly sound impressive, but that’s not what you’ll receive. This number will be divided between each person who files a claim, which is probably a lot. For example, TikTok’s recent $92 million settlement had around 89 million eligible users.

Not all users will claim a settlement, leaving more money for those who do. Still, many people will be depositing, so your check could be considerably smaller than expected. Prosecuting attorneys will also take a fee from the payment, leaving you with even less.

In the TikTok example, most users would receive less than a dollar if everyone applied. Those facing lower fees would still receive just under $6. You can get more depending on your case, but it probably won’t be an impressive sum.

What if you do not file a complaint?


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What if you don’t want to file a complaint in the data breach lawsuit? If you don’t want to, you don’t have to. There’s no legal requirement to join the lawsuit, so if you’re not interested or don’t trust its legitimacy, you can leave it alone.

You might say that joining others in filing a claim helps hold companies accountable. If they’ve already agreed to pay the settlement, the financial blow probably taught them that lesson.

File a complaint: the decision is yours

Whether you should file a data breach settlement claim is entirely up to you. If you want a chance to get money or stand up against poor security practices, join the lawsuit. The settlement payment may be low and the process long, but it costs you nothing but time.

Data breach class action settlements are an example of the critical importance of cybersecurity reliability. Whether or not you file a claim, these lawsuits encourage companies to be more careful with user data.


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