In Which I Get a Remarkably Small Check

Very, very faithful readers may recall back in December 2007 I posted I Am A Plaintiff in which I recounted my discovery that I was part of a class of persons who had been subjected to improper foreign currency fees when using a US credit card abroad.

As I reported then, the proposed settlement offered me three choices:

1. $25 cash money.
2. Estimate how many days I was abroad in 1996-2006, and get a rebate of 1% of what they guess I spent with my credit card based on some formula they do not disclose. Key to that formula is whether I characterize my travel as sometimes/often/mostly “business,” “visiting friends or relatives,” or “vacation or leisure”. (In fact it was some of each.)
3. Provide detailed receipts of my credit card usage abroad in that period and get 3% back.

I chose option two, having calculated that I was abroad for 394 days during the relevant period.

Today, about three and half years after claims were due, I got my check — for $51.81. This doesn’t seem like much, as I’m sure I would have spent more than $5181 while doing a combination of fairly high-priced business travel, some holiday travel, and just being, over the space of more than a year. And indeed, the note attached to the check I received states that “All refund amounts are reduced because the full amount of all the claims exceeds the amount in the settlement fund.”

Poking around on the settlement website reveals very little about how they calculated this figure. I was not able to find a clear statement of what the settlement value was, what the lawyers’ share of the settlement was, or what was left after they took their share. I was able to learn that 10 million (10 million!) claims were filed. I was not able to learn what formula(e) the parties used to value the claims — something I’d have liked to see. I did, however, learn that the amount claimed exceeded the amount of the settlement, so that payments were reduced according to a complicated formula in the Court-approved Revised Plan of Administration and Distribution. But the site does not reveal which of the various contingency plans in that document were used, nor how much of a discount got applied to claims like mine. (If I understood it right, it does say that the folks who picked option one got their $25, so I didn’t get paid much for all the effort of going through old calendars and diaries and calculating the number of days I was abroad.)

All in all, one has a sense that the purpose of the claims web site is not to inform but to obfuscate, while appearing to meet some minimum formality of seeming disclosure.

Commonly, a complaint about class actions is that the victims don’t even bother to make claims. In this case that is emphatically not the case, since 10 million claims were filed (I’m not clear, though, if it was 10 million people, or if there may have been multiple claims by holders of multiple cards). But at the end of the day, even people like me who had what one would think would be a fairly substantial claim — abroad more than a year — gets peanuts. Without knowing the size of the settlement one can’t say whether it may serve some deterrent function in the future, but I have to wonder if it was large enough to achieve that.

Incidentally, the note attached to the check says there’s a second, separate lawsuit,, Ross v. American Express Co., regarding the mis-use of arbitration clauses. If you were forced into arbitration, don’t get your hopes up too high: that case was settled for $49.5 million, of which only $13.875 million remains after court costs and attorneys’ fees. Perhaps it is apt that lead class counsel have their offices on Locust Street?