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Class Action Rebates: How to Claim Money You Didn’t Know Was Yours

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Corporations aren’t always on their best behavior.

Scandals happen, security systems fail, and fraud ensues.

While putting businesses on the naughty list won’t do you much good, class action rebates will — even if you didn’t know you were wronged in the first place.

If you ever had a faulty battery you threw out without a thought or an old laptop that seemed buggy, there’s a chance a law was actually broken, and you’re eligible to earn.

Keep reading to learn about class action rebates, how to claim them to get cash, and what opportunities you should look out for in 2020.

What Are Class Action Lawsuits?

Class action rebates: A business man holds a pen


To understand class action rebates, it’s important to understand class action lawsuits first.

“Class action” is a special classification for lawsuits that involve a plaintiff who represents all absent class members.

The central issues of these lawsuits typically affect a large amount of class members (usually a minimum of 40 to be approved by the court), providing reason for a majority to be absent from court.

This ensures that a trial can occur without thousands of class members from across the country having perfect attendance in the courtroom, and it’s the reason why you could be a member of a class action suit without even knowing about it.

For example, a past class action lawsuit involved plaintiffs representing over 300,000 Uber drivers in California and Massachusetts.

In another recent example that was highly publicized, nearly 500,000 Volkswagen diesel owners were represented in a lawsuit following Volkswagen’s emissions scandal.

This type of lawsuit is most common in the United States, though some additional countries have adapted the concept to protect consumers and wronged employees.

Common issues that class action lawsuits help prevent include data breaches, discrimination, price gouging or fixing, and undisclosed dangers associated with a product.

What Are Class Action Rebates?

Class action rebates: a check made out for over $500


Class action rebates are the results of class action lawsuits.

When a plaintiff successfully sues the defendant on behalf of a class, the defendant must pay a settlement to benefit the wronged class.

This settlement creates a fund that class members can request monetary returns (class action rebates) from within a specified time period, known as the class period.

Figuring out if you’re eligible for a class action rebate is as easy as reading requirements on a lawsuit description, and nowadays, there are many resources to help you out.

Keep reading for more information on how you can make a settlement claim.

Claiming Your Class Action Rebate

Class action rebates: an overhead shot of a woman on a laptop


Even if you weren’t noticeably affected by the central issue of the lawsuit, receiving money from a company’s settlement doesn’t make you greedy.

If unclaimed, class action money often isn’t qualified to be donated — a charity can only receive the funds if they help prevent the issue behind the lawsuit from occurring again.

Since this isn’t usually the case, leaving the remaining settlement funds behind will likely result in one of the following:

  • Disbursement among eligible people (class members) who already submitted claims
  • Funds being retained by the state
  • A return to the defendant, frequently with penalties to prevent monetary benefit

That said, making your own claim doesn’t do any harm, especially if you’re putting the money to good use.

To file claims for open settlements:

  1. Find class action settlements that are currently open to rebate claims. Using websites like classaction.com, classactionrebates.com, and topclassactions.com will help you gather a sizable list.
  2. When you find rebates you qualify for, complete the claim form associated with each case. Many claim forms will require proof of purchase, or at least details of your purchase, in addition to your basic personal information. For those that don’t, keep in mind that all class members still must meet qualifications to make a claim.
  3. Within a couple months following the end of the claim period, you’ll receive a check with your portion of the settlement funds if your claim is approved.

Upcoming Class Action Rebates

Class action rebates: the outside of a courthouse


As previously mentioned, dedicated websites for finding open class action settlements are available.

However, class periods can be short, so being proactive about finding rebates you qualify for can help ensure you don’t miss a single one.

Here are three pending class action settlements to look out for in 2020.

Apple

In October of 2019, Apple is set to go on trial for selling iPhones with faulty power buttons without disclosures.

If the plaintiff successfully sues the company for breach of warranty, among other violations, citizens of California may be eligible for a significant rebate on their cell phones if they purchased:

  • An iPhone 4 between June 24, 2010, and October 10, 2011
  • An iPhone 4s between October 11, 2011, and September 20, 2012
  • An iPhone 5 before April 1, 2013

Class members must fulfill additional eligibility criteria that can be found on the lawsuit website.

United States Domestic Airlines

Class action rebates: An airplane wing


Have a remote job or career that allows you to travel frequently?

If you purchased domestic flight tickets from any of the four biggest U.S. airlines — American, Delta, Southwest, or United — or their subsidiaries between 2011 and 2018, there’s a good chance you’ll be able to receive a rebate in the near future.

These airlines were sued for allegedly limiting aircraft capacities in order to raise ticket prices for passengers.

Southwest and American Airlines have already agreed to settlements worth $60 million in total, so once lawsuits against Delta and United are complete, the claim period will likely begin.

Exact eligibility requirements can be found on the lawsuit website where you can also sign up for updates on the very probable lawsuit settlements.

Visa and Mastercard

If you’ve accepted credit card or debit card payments to sell your stuff online or in a local business, there’s a good chance you qualify for a rebate from this massive settlement.

Visa and Mastercard were sued for charging excessive swipe fees and violating antitrust laws, and preliminary court approval has already been given for their settlement.

To be an eligible class member, you or your business must have accepted either of these card brands between January 1, 2004, and January 25, 2019, specifically in the United States.

More details on this billion-dollar settlement can be found here.

Frequently Asked Questions

Now that you know where to begin making your settlement claims, we’ll help you fill in the gaps.

To build your understanding of class action rebates, here are the answers to three frequently asked questions:

1. Are class action rebates taxable?

If you’re approved for a rebate, the cash payment you receive must be reported to the IRS.

However, this doesn’t necessarily mean that you’ll be taxed for this extra money.

In many cases, the cash amount becomes insignificant, after being dispersed among many class members, making taxation unnecessary.

If you were physically harmed or made physically ill by a product, your class action income can be legally excluded from taxation.

Speaking to your accountant can help you determine the taxation situation for your rebate.

2. Is there a chance I will not receive my class action money?

If you’re an eligible class member and do not receive your rebate following the expected time frame, there is a chance that a large volume of eligible recipients has reduced final payouts to the point that a court will elect not to provide rebates.

For example, if payouts end up as just a few cents, the cost of postage would have eaten up everyone’s earnings already.

This is most likely to happen in national lawsuits with low-cost settlements for widely popular consumer-facing products.

If this does occur, the court has the power to decide what happens with the class action money.

3. Why isn’t proof of purchase always required?

Our question for you: Do you carry around every receipt from the past decade?

As you may have noticed, many eligible purchases central to class action lawsuits took place many years ago.

While you may still hold receipts for high-cost products with warranties, plenty of lawsuits involve items you would likely throw out receipts for within a matter of days.

For example, class members for a recent Aveeno lawsuit likely won’t have receipts for baby shampoo lying around from 2007.

This system has its faults, but the primary purposes are in tact: Providing honest class members with at least some returns and penalizing the wrongdoer.

Take Home What You Deserve

Class action rebates aren’t just an earning opportunity.

They’re a method of keeping corporations in check and a way of preventing future deviations from the law — all to protect consumers like you.

We hope this guide has helped you find and claim your rebates, or equipped you for future opportunities.

Looking for additional ways to get extra cash with minimal effort?

Check out our guide to passive income opportunities for a handful of ideas.

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