Consumers and Class Action Notices: An FTC Workshop

On October 29, 2019, the Federal Trade Commission held a public workshop in Washington, DC on improving class action settlement notices for consumers.

The event addressed current practices and research related to class action notices, redress methods, claims rates, check-cashing rates, and similar issues. The workshop included several panels of experts representing a wide range of perspectives, including consumer groups, defense and plaintiff attorneys, class action administrators, and government agencies.

For more than a decade, the Commission’s Class Action Fairness Project has followed developments in class action cases to ensure that class action settlements in consumer protection and competition matters provide appropriate benefits to consumers. As part of its efforts, the FTC has monitored class actions; filed amicus briefs in appropriate cases; coordinated with state, federal, and private groups to gather information and opine on matters that merit FTC attention; and followed the progress of legislation and class action rule changes.

To further the FTC’s understanding of these issues and develop information to help improve settlement outcomes for consumers, FTC staff recently completed a staff report summarizing the findings of two studies involving consumer class actions: the Administrator Study and the Notice Study. In the first study, FTC staff obtained a sample of more than 140 consumer class action cases from large class action administrators. Based on the data collected, the FTC analyzed several characteristics of these settlements, such as notice methods and redress (i.e., compensation) amounts available, and how these characteristics relate to outcomes, including claim-filing and check-cashing rates. In the second study, the staff conducted an Internet-based consumer research study to explore consumer perceptions of class action notices, including whether consumers understand the options provided in such notices.

The workshop was free and open to the public.