Automatic Payment vs Claim Form: Which Settlements Pay Without Filing?
Some settlements send money without a claim, others pay only people who file. Here's how to tell the difference and what to do in each case.
Settlements pay automatically when the defendant's records already identify class members and show what each person is owed, such as a bank that knows exactly which customers were charged a fee. Settlements require a claim form when the defendant can't identify everyone or doesn't know how much each person lost, such as a product sold through third-party stores. The notice and settlement website always say which kind you are dealing with.
How automatic payment settlements work
In an automatic payment settlement, sometimes called a direct-pay settlement, the administrator uses the defendant's data to calculate payments and sends them without a claim. You may receive a check, an account credit, or an electronic payment. Common examples include:
- ✓Bank fee settlements where the bank has records of each fee charged.
- ✓Employment settlements based on payroll records.
- ✓Subscription or billing settlements where the company knows every customer's charges.
- ✓Some utility, phone and insurance settlements.
Some automatic settlements still let you choose a payment method or update your address online, and a few combine an automatic base payment with an optional claim for extra money.
How claim form settlements work
In a claims-made settlement, you only get paid if you file a valid claim by the deadline. These are common when:
- ✓Products were sold through retailers, so the manufacturer doesn't know who bought them.
- ✓Payments depend on documented losses, like out-of-pocket costs after a data breach.
- ✓The class includes people the defendant has no contact information for.
- ✓Class members can choose between different benefits.
If a settlement requires a claim and you don't file, you get nothing, but you are still bound by the release and give up your right to sue over the same claims. Check whether a claim is required before you decide to wait.
How to tell which type you have
- 1Read the summary of options in the notice. Automatic settlements usually say you don't need to do anything to receive payment.
- 2Look for a "Submit a Claim" button on the settlement website. Its presence usually means a claim is required, at least for some benefits.
- 3Check the FAQ on the settlement site for a question like "How do I get a payment?"
- 4Call the administrator if it's still unclear.
Hybrid settlements
Many settlements mix both approaches. Current customers might receive an automatic credit while former customers must file a claim, or everyone gets a small automatic payment and can claim more with documentation. Read carefully, because you may be eligible for both parts.
Which is better for class members?
Automatic settlements usually reach far more people, because no one has to remember to file. Claims-made settlements often have low claim rates, which can mean larger per-person payments for those who do file. Courts consider the method of distribution when deciding whether a settlement is fair. Our article on judging settlement fairness explains why.
What to do in each case
- ✓Automatic: Keep your address current with the administrator or defendant, and watch for a check, card or credit. Cash checks before they expire.
- ✓Claim form: File before the deadline, choose your payment method, and save the confirmation.
- ✓Hybrid: Confirm your automatic payment details and decide whether to file for the optional extra benefit.
Why automatic payments still go missing
Automatic doesn't mean guaranteed delivery. Checks are mailed to the address in the defendant's records, which may be years old. Account credits only reach people who still have the account. Electronic payments depend on a working email address. If you've moved or closed an account since the class period, check the settlement website for a way to update your information or request a payment another way.
Uncashed automatic checks are one of the most common ways money goes unclaimed. If one arrives, deposit it promptly, because most expire after a set period printed on the check.
If you are not sure whether you were part of an automatic settlement, the administrator can usually look you up by name, address or account details and tell you whether a payment was issued.
Most open settlements require a claim, which is why deadlines matter so much. You can browse current cases on the open settlements page, and SettleScout flags which ones need a claim and reminds you before each deadline.
Frequently Asked Questions
Do all class action settlements require a claim form?
No. Some pay automatically when the defendant's records identify class members and what they're owed. Many others require a claim. The notice and settlement website say which applies.
How do I know if I'll get paid automatically?
The notice usually states that you don't need to do anything to receive a payment. If you're unsure, check the FAQ on the official settlement website or call the administrator.
Can I still be paid automatically if I moved?
Possibly, if the administrator can find your new address. Update your address through the settlement website or administrator if the option exists, and file a forwarding order with the postal service.
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