Nuts and Bolts of the GTL Prepaid Settlement

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Thousands of wireless customers are eligible for a share of the $67 million GTL prepaid settlement. According to court documents, if a prepaid wireless account was inactive for more than a few weeks, Global Tel Link moved any money in the prepaid account into an inaccessible account.

This scam was similar to the expired gift card controversy that was very common until federal regulators cracked down on the practice. Department store and other gift cards once expired after a few months, so the retailer kept the money and refused to extend any credit to the cardholder.

In many ways, the GTL prepaid settlement is a lot like the Scharfstein v BP class action settlement. BP illegally added debit card fees to gasoline purchase transactions, hurting poor people who could barely afford gasoline in the first place. GTL basically did the same thing to wireless customers. Most GTL wireless customers are vulnerable individuals as well. This company focuses on jail and prison inmate calling services.

Starting a Class Action

Between 2011 and 2021, GTL Prepaid illegally confiscated money from thousands of customers. These cases were far too numerous for courts to resolve on a piecemeal basis. More on class action resolutions below.

Numerosity is just one requirement for a class action lawsuit. Additionally, all victims must have basically the same experience and the named party, as well as the named party’s attorney, must be able to adequately represent all class members.

These requirements are very subjective. Two victims or two million victims might satisfy the numerosity requirement. Additionally, everyone in the GTL class action settlement didn’t have exactly the same experience. Some people lost a few dollars and some people lost more money. Finally, attorneys swear oaths to zealously represent their clients, not people with similar interests with their clients. So, not every lawyer is an effective class action lawyer.

Despite these uncertainties, a class action is usually the way to go in such a lawsuit. There’s strength in numbers. Lone Ranger legal actions have many advantages, but in class action situations, they usually don’t turn out well for victims.

Resolving a Class Action

These lawsuits, like other civil lawsuits, almost always settle out of court. Usually, by the time class action members receive notice of the proceeding, a settlement is already informally in place.

The class action lawsuit process has many controversial elements, but timing may be the biggest one. If class members knew about the lawsuit earlier in the process, when a settlement was uncertain, many more members would probably opt out. A mass opt out could affect the aforementioned numerosity requirement, which was discussed above.

So, the class action system is by no means perfect. But it’s probably still the best way to resolve large-scale disputes like the GTL Prepaid brouhaha.

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Bret Thurman

Bret is a former lawyer and full-time writer who knows how to simplify complex topics. He received his law degree from the University of Texas at Austin. For over twenty years, he handled a wide variety of cases, including criminal defense, personal injury, family law, and consumer bankruptcy.

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