Class Members Don't Read Emailed Settlement Notices Either, FTC Says
The report comes as new federal rules have encouraged electronic notices in class action settlements. But the report found that email notices had a lower claims rate than did traditional materials sent in the mail.
September 20, 2019 at 06:43 PM
9 minute read
For years, attorneys pushed the federal courts to embrace the use of email to notify class members about a settlement. They were cheaper, they argued, more modern, and less likely to end up in the trash. But a comprehensive study out this month by the Federal Trade Commission found that emailed notices weren't getting more consumers to sign up for their refunds—in fact, they're making things worse.
The report, called "Consumers and Class Actions: A Retrospective and Analysis of Settlement Campaigns," found that email notices resulted in a median claims rate of 2% and a mean claims rate of 3%, weighted by the number of class action members. That is far lower than traditional packets of class action materials sent by U.S. mail, which resulted in a 10% weighted mean and 16% median, the FTC report said.
That finding is surprising, according to lawyers and others who practice in class actions. And it comes despite a new rule enacted last year that encouraged lawyers to use more electronic notices.
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