Bumble is one of the many, many dating apps on the market today. Competition drives down prices, which means companies like Bumble need lots of subscribers to make money. A class action lawsuit alleged that the company’s auto-renewal policies violated California law, and the company’s failure to inform subscribers of their right to cancel violated federal law. The company paid $22.5 million to resolve these allegations. Consumers’ share of those settlement funds appeared in their Venmo accounts as “B Settlement” money.
As is the case in most other class action settlements, the B Venmo settlement class members had three basic options, which are outlined below. Class action lawsuits compensate victims and compel companies to change the way they do business. Given the fact that the company has already broken the law and stolen money, these two outcomes are the best possible results under the circumstances.
Opting into a class action settlement is usually the best idea. Victims just have to check a box to receive compensation. In many cases, they don’t even have to do that. Many class actions are automatic opt-in class actions. Doing nothing is like opting in.
The downside is limited. Yes, opt-in victims only receive partial compensation, and they lose their right to sue independently. But, they don’t have to prove their claims in court. That’s often difficult in claims like the Bumblebee class action settlement, because damages are hard to measure.
Additionally, a class action settlement is the classic “a bird in the hand is worth two in the bush” puzzle. Victims who opt out and pursue independent claims could get a lot more money, but most likely, they’ll get nothing.
Opting out of a class action lawsuit gives you a right of independent action in court. But rights are pretty much just ink on paper unless a court enforces them. And in this context, that’s pretty unlikely.
Named plaintiffs and their attorneys get larger shares of class action settlements because these individuals do all the heavy lifting. They prepare the case, collect evidence to support its claims, and fend off the defendant’s procedural motions in court.
Victims who opt out of class actions could get more money, but it’s unlikely that they could clear all these hurdles. Generally, when people opt out, they take a few preliminary steps to enforce their rights in court. But they lose steam, the statute of limitations expires, and that’s that.
Would-be class action participants can also object to the settlement and appear at the confirmation hearing. When that happens, if the judge rules in their favor, the two sides must resume negotiations, and there’s no guarantee these negotiations will bear fruit. So, unless you have a legitimate objection to the settlement, aside from “I’m not getting enough money,” and you have an experienced lawyer, this choice is usually the worst one of the three.