Class Action “Shakedowns”

Law Firms Scouting for Plaintiffs and Looking for Quick Settlements.

It’s a well-known fact that plaintiff lawyers start with identifying a target for a class action suit, and then try to find plaintiffs to join the class action. Unfortunately, it’s turned into a jungle out there. As a lawyer, I am appalled at the activities of many in my field who manipulate the system for their own pockets. The law practice is hitting a new low with a firm now paying people to serve as plaintiffs and provide false testimony in class action suits, 
These class actions are really just “shakedown” actions by attorneys using broad consumer protection laws to pad their wallets. California is a hot bed for this. 
They allege that advertising is false and misleading and use the statute to sue as a means to force marketers to defend themselves. The class action setting makes it even more dicey because of the risk of multiple claimants and the ability to recoup attorneys’ fees. It’s not a pretty picture.
You’ve seen the TV and newspaper ads trolling for “victims.” In the past, I’ve dealt with a claim based upon one customer who never complained and never sought a refund for a supplement, and is now in the early stages of litigation. The reality is that this is a leverage play to get a quick “settlement” because the potential cost of defending this is prohibitive and everyone knows that.
So, how do we reduce the risk of being a target? Besides truthful advertising and impeccable customer service?
“Class Action Waivers” in your Terms of Service/Terms of Sale can be effective deterrents.
Predatory firms are looking for easy targets. Make it hard by doing the right thing and by having disclaimers that make it difficult for you to be targeted.

by Peter Hoppenfeld