Don't Make This Mistake When Claiming Your Payout in a Class-Action Settlement

If you use social media, you've probably seen ads from law firms and claims-filing services promoting class-action lawsuit settlements. They make it sound so easy: Just make an account, send in some info, and you'll get paid.

But while it's natural to wonder how you can claim money you're owed in these settlements, experts caution against relying upon third-party companies to file claims.

Third-party filers in class-action settlements often charge fees ranging from 15% to 40% of the payout. While these types of businesses have been around for over a decade, they've boomed in recent years thanks to the ease of taking out TikTok and Instagram ads that piggyback on settlements involving large brands like Juul, Celsius, Clif Bar and Bumble.

Be warned, though: In addition to taking a cut of your payout, third-party filing services are not guaranteed to have success claiming money in settlements.

In one of the highest-profile class-action settlements this year — an Apple Siri privacy case — a judge recently rejected a third-party company's attempt to batch-submit thousands of claims for their users' shares of the $95 million settlement.

Back in the spring, Kelvin Goode, chief legal officer at ClaimsHero, a startup law firm specializing in class actions, posted social videos boasting "big news" for Apple users: "If you own an Apple device with Siri on it, you could be eligible for a share of a $95 million class-action settlement," he said in a clip on X.

By that time, ClaimsHero had 125,000 users and considered many of them possible claimants, ClaimsHero CEO Matt Freund tells Money. (Today, the company is up to nearly 350,000 users, he says.)

When the Siri settlement window opened, ClaimsHero attempted to coordinate its submission of claims with the settlement administrator, Angeion Group. Despite ClaimsHero's efforts, Angeion announced that it would "not permit participation by third-party filers," according to ClaimsHero.

In a late-May court filing, ClaimsHero attorneys asked a judge to step in, explaining that the company's mission is to help people recover money from settlements. Far too often, people miss out on money they're owed, ClaimsHero says. Its system is designed to help them.

Ultimately, on June 13, the judge denied ClaimsHero's motion to compel Angeion to accept the claims. Upon this setback, ClaimsHero paused its social media campaign for the Apple Siri settlement. The window to submit claims closed on July 2.

Why third-party claims were not accepted for the Siri settlement

Apple's attorneys, Morrison Foerster partners Arturo J. González and Purvi G. Patel, argued in a filing that the settlement administrator was not obligated to accept a bulk submission of claim forms by ClaimsHero (which takes a 25% cut of payouts), stating that third-party submissions would "increase the risk of fraudulent claims."

González and Patel, who did not respond to Money's request for comment, pointed to precedent in a 2023 ruling in the $300 million Juul Labs vape settlement. In that case, the judge did not allow a similar third-party batch filing attempt from a company called ClaimClam, which was later the subject of an investigation by the District of Columbia Attorney General's Office for exploitative business practices.

Apple, through its lawyers, also raised questions about verifying payouts sent to ClaimsHero or other claims-filing services. The doubt centered around the distribution process: When these services receive funds from settlements, the payout first goes to the third-party filer. Only then is it sent to the class member — with the company's fee subtracted.

This, the lawyers argued, is impossible to track.

"To the extent ClaimsHero intends to request that they also receive payment on behalf of Settlement Class Members, Angeion will not know whether funds delivered to ClaimsHero get passed to Settlement Class Members, creating the risk that eligible Settlement Class Members may later seek a Class Payment from Angeion when funds are no longer available," Apple's attorneys wrote in a filing.

The other key piece of Apple's argument related to a common condition of settlement agreements that class members must attest to satisfying all requirements for eligibility. In this case, that meant attesting that you purchased or owned a Siri device and experienced an unintended Siri activation between 2014 and 2024, among other conditions. Apple asserted that a third-party company could not do this on behalf of a user.

Freund pushed back, telling Money that ClaimsHero would have asked its users to confirm that the settlement applied to them before filing anything on their behalf. Had Angeion allowed it to batch-file claims, ClaimsHero would have sent an email blast with the eligibility criteria and a link to a form on their website to collect more info before proceeding, he says.

"We try to fight and advocate for our users," Freund says. "In this case, we weren't able to do so."

Sometimes, these services have better outcomes. In fact, according to a filing, ClaimsHero successfully submitted more than 1,500 claims to Angeion in a separate financial aid antitrust settlement. Earlier this year, ClaimClam reported that it has "recovered about $1.3 million for over 40,000 claimants" from various settlements.

Can you trust third-party filers in class actions?

Claims-filing services say they're trying to make it easier for consumers to file and collect on legal claims, as is their right. However, some legal experts question the need for — and motivations of — these companies.

First of all, completing a claims form to get your cut of a class-action settlement typically doesn't require any legal consultation.

The claim forms are pretty straightforward, and ordinary consumers can do it themselves. "Most of the time, it really is as simple as answering a few questions and signing a form and sending it in, and increasingly, you can do it online," says Archis Parasharami, partner at Mayer Brown LLP. "The notion that special help is needed... I'm skeptical."

The ClaimsHero fee model isn't the only structure for third-party filing companies. Other companies work slightly differently; some have membership-fee business models. For example, Settlemate is currently running ads on Instagram and ranks in the top five downloaded apps in the finance section of Apple's App Store.

"Companies owe you money. Settlemate helps you earn that back," promises one of the company's recent ads.

The service costs $13.99 per month or $34.99 a year but offers a money-back promise if the subscription doesn't pay for itself through funds retrieved in class-action settlements. The company's FAQs clarify that submitting a claim is free. (What you're paying for is more proactive tracking of class actions, product recalls and refund opportunities.)

Another service, Claim, charges service fees that start at $4.99 per week. And for every glowing review for these apps, there's one (or two) declaring them to be a scam.

Costs aside, Parasharami says it also can be "problematic" to rely on a third party because it may not be able to deliver. At the very least, whether the claim is accepted could depend on the settlement and the judge.

"Many class actions provide for class members to personally attest that they were using the product or service at issue, or that they felt the harm that is the subject of the class-action lawsuit," he says. "Having third-party filers who may not be capable of delivering that personal attestation… [can] lead to a rejection of the claim for failure to meet the requirement."

To get court-approved information about a settlement, Parasharami says, consumer can simply search the name of the settlement online to find the official settlement page, which usually will contain all the instructions they need.

Other legal experts have more favorable views of claims filing services. Brian Fitzpatrick, a law professor at Vanderbilt University, writes in an email that he generally supports initiatives that increase class member participation — as long as they're not fraudulent.

"The question is whether these class members would have filed a claim without ClaimsHero," Fitzpatrick tells Money.

If yes, he posits, they probably wouldn't have done it through a service and sacrificed 25% of their payout.

What's more likely is that they would not have filed claims at all without ClaimsHero — which, broadly speaking, supports the idea that proliferation of third-party claims-filing services is a positive development that helps consumers get their hands on money they're owed.

"Getting 75% through ClaimsHero is better than getting nothing," Fitzpatrick says.

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