On May 8th, 2021, thousands of Simple Bank customers were switched over to BBVA bank. For days after the switch, many consumers could not access their accounts.
Customers were outraged. They had trouble receiving their deposit or paying their bills. They had trouble getting customer service representatives on the phone. Some customers immediately began discussing a class action lawsuit.
No lawsuit has been filed as of yet, and in order for one to be filed Simple customers would have to show that they suffered financial losses (and not just inconveniences) as a result of the botched migration. Nevertheless, the immediate interest in a class action case is certainly demonstrative.
What is a class action case?
A class action case is any case where a large group of people band together to hold an organization accountable for harms they have caused.
Consumer class actions are the most common type of class action case. A consumer class action case is likely when a company has caused a lot of harm by using misleading or false advertising, has issued a defective product, or has violated consumer protection laws.
There are other types, including employment law, real estate law, securities law, environmental law, and almost any other type of law that you can think of.
In each case, a lot of people have been injured by an organization’s actions and they’ve suffered losses as a result. A class action suit is similar to a personal injury suit but in many cases does not make sense to pursue as a personal injury case.
There are three reasons why a class action case might be chosen over an individual personal injury lawsuit.
#1) Too Many Victims to Make Individual Cases Practical
In a class action suit there may be hundreds of people who have all been impacted in the same way, or in a very similar way. While there is no exact number the court must certify the class, and the number may vary depending on what type of lawsuit you’re considering.
For example, you might expect to see a larger class in a consumer suit but there might be room for a smaller class in an employment lawsuit.
In each case, there are just too many people to make marching back into court over and over again for the same issue practical for any party.
#2) Individual Losses Are Small, but Add Up
While this isn’t a requirement of a class action lawsuit, it can be a reason why it is better to choose this type of suit. Let’s say that you’ve lost several thousand dollars as the result of a company’s behavior.
To you that loss is substantial, but it’s not going to be enough to inspire an attorney to pursue a personal injury case on your behalf. They can’t: they work on contingency. The up front expense of the case alone will typically exceed the eventual award when the damages are very small.
Yet when all the damages are added up across all consumers they could be worth millions or even billions of dollars. Here, a class action makes sense. The plaintiffs may not recover the full amount of their losses individually but they will recover something. In the meantime, the organization that caused the losses will still be held accountable.
#3) The Aim of the Lawsuit is Not Necessarily Monetized
In a personal injury lawsuit you are generally trying to recoup financial losses that are downright devastating, like a $25,000 hospital bill you’d never be able to pay on your own.
In a class action lawsuit you might have lost some money, but the money isn’t the point.
The point is to stop the organization that’s pursuing a detrimental behavior from continuing to sue it. For example if a bank has been charging customers overdraft fees unfairly, recovering $300 in overdraft fees for an individual isn’t necessarily something worth going to court over.
Ensuring the bank stops doing that though, can be highly beneficial for all customers as a whole. Being forced to refund a million versions of that $300, being forced to cover legal fees, and being the subject of media attention? It’s all a much better deterrent. Better still, ending the behavior can become a condition of the settlement or an order of the court.
Interested in filing a class action lawsuit?
This law office has years of experience pursuing and winning class action cases. Reach out to schedule a consultation today.
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Meet Mr. Richman
SCOTT B. RICHMAN, ESQ.
Mr. Richman is the Managing Member and Founder of Richman Law Firm PLLC. In his role as Managing Member, Mr. Richman oversees the day-to-day operations of the firm and handles the litigation of the most complex legal matters across a vast array of practice areas and disciplines.