When a class action settlement is approved, it carries the unspoken promise that the money set aside will go to the people who deserve it. Unfortunately, this promise is under attack in the age of digital claim forms and automated submissions. Fraud today is not a lone individual trying their luck; it’s organized, automated, and often international. Fraudsters see settlement funds as a ripe target, deploying bots, synthetic identities, and phone farms to slip through weak controls. Every false claim they succeed in filing takes money away from the class. And when that happens, the integrity of the entire process is eroded.
So how do you stop it? The industry’s reflex has often been to minimize cost, buy the cheapest tool, do just enough to satisfy the requirement. But, as cut-rate tools show, cutting corners on fraud prevention is like leaving the vault door open to save on the price of a better lock. It doesn’t work, and it costs far more in the end. Administrators and counsel sometimes hesitate to invest, thinking they’re protecting the fund. In reality, they’re exposing it.
And here’s where ethics meet economics. The absent class members are clients, even if they’ve never set foot in the courtroom. Their money is at stake. Failing to protect those funds is risky; some consider it a breach of duty. Courts are paying attention and class members deserve protection. Doing nothing, or doing little, is no longer neutral.
But the story doesn’t end with risk; it ends with opportunity. Fraud prevention, when done right, pays for itself. As our analysis shows, robust detection turns the tables. Every blocked claim is money preserved for real people. Those dollars don’t vanish—they stay in the settlement, where they belong. In some cases, it means hundreds of dollars more per claimant. In others, millions of dollars never leave the fund at all.
Yes, it costs money to protect money. But the numbers tell the story: when fraud can quietly consume 10%, 20%, even 80% of a fund, investing in prevention is far cheaper than the alternative. The price of good fraud prevention is always smaller than the cost of doing nothing.
The fairest, most logical source of funding is the settlement fund itself. The class has everything to gain, and every dollar spent to protect the fund is a dollar invested in fairness. As we’ve argued before, fraud prevention isn’t overhead—it’s recovery. It ensures that the settlement’s promise is kept: that those entitled to compensation actually receive it.
Fraud prevention isn’t a secondary concern—it’s central to fairness. Even a small portion of the fund, invested in protection, can pay for itself many times over. It transforms a potential loss into restored value for real people. The best way to protect a class action settlement is to allow the class invest in itself.
