Very Classy: Classmates.com Settles Deceptive Email Suit
In a move eerily reminiscent of that date who stood you up for the dance in high school, Classmates.com was sued in 2009 for allegedly telling their customers old friends were looking for them, and then, no one showed up. The suit has settled, with the plaintiffs due to receive up to $9.5 million in damages.
According to Tech Flash, named plaintiffs Anthony Michaels and David Catapano, alleged that they received deceptive emails from the company once they signed up for the free basic service. According to their claims, the company would send out emails suggesting that old high school friends had signed their guestbooks. Customers would be allowed to see who signed in only after becoming Gold status members for a payment of $9.95. Specifically, according to the complaint, "Defendants failed to inform Plaintiff Michaels prior to his paying for a 'Gold' membership subscription that in fact no past acquaintances of his are trying to contact him."
While not admitting to any wrongdoing, the company has agreed to the settlement filed on March 12, which will bring each of the named plaintiffs $2,500 and about $1.3 million in attorneys fees for their lawyers. Classmates.com members (from 1/1/07 on) who upgraded to a Gold membership on the site after receiving the email suggesting that they pay to see who had signed their online guestbooks will be eligible for $3 in cash or a $2 credit toward future Classmates.com purchases. According to documents filed in the case, as many as 3.16 million people in the United States would be eligible for the payout.
An additional group of class members, including each person who has "registered with or subscribed to" Classmates.com dating back to Oct., 30, 2004, would simultaneously be eligible for an offer by Classmates of a $2 renewal/purchase credit. Potential claimants cannot receive payment under both sets of payment groups.
Tech Flash reports, curiously, that Classmates.com President Steven B. McArthur resigned from the company less than two weeks ago. He will be replaced by Frederic A. Randall Jr., the company's former executive vice president and chief strategy officer. Parent company United Online says they do not know the reason for McArthur's departure.
Under terms of the proposed settlement, Classmates members eligible for a cash payout or credit will be notified by a settlement administrator and given deadlines and procedures for submitting a claim. The settlement still requires court approval before becoming final.
Related Resources:
- Classmates to pay up to $9.5m to settle suit over phantom friends (Tech Flash)
- FTC Looks at Online Privacy and Behavioral Ads (FindLaw's Common Law)