How Does Paying Some Lawyers $4 Million Help With Consumer Privacy?
from the good-work-if-you-can-get-it dept
We noted earlier in the week that the number of shareholder class-action lawsuits is falling. For average-Joe stockholders, this really means very little, as the settlements they receive from such suits are often pretty minimal. The lawyers that seek out and file these suits are the ones feeling the pinch, since they're the real beneficiaries of class-action suits. But even though shareholder suits are becoming less popular, lawyers still have plenty of other kinds of class-action suits to generate some cash. Case in point: a recent settlement (via Threat Level) of a suit against Bank of America, in which it was alleged the company made customers' personal information available to outside marketers and other third parties, in violation of its privacy policies. The effected class is pretty huge, with 35 million current and former customers available for a piece of the "$14 million settlement." Of course, that $14 million figure is pretty theoretical. It includes a $3.25 million contribution to "privacy-related programs", while people in the class are (depending on where they live and what accounts they had with the bank) eligible for a $200 discount on mortgage loan origination fees at BoA, some free checking account services, 90 days of "Identity Theft Protection Service", or a year of some other pointless credit-card "security" program. What do the lawyers get? Bank of America's agreed to pay them up to $4 million. Why don't they just cut out all the trouble, just pay the lawyers $4 million upfront, and promise they'll never do it again? Seems like that would deliver roughly the same end benefits.