Thursday, June 17, 2010

$628.65 Check From E*TRADE Class Action Settlement

The other day, I opened up my mail and was surprised to discover a $628.65 check from a class action settlement. This arose out of allegations that E*TRADE recorded telephone calls without notifying the other party that they are being recorded.

For some background, in September of last year, I received an Email asking if received any telephone calls from E*TRADE during the period from September 3, 2003, to May 22, 2009. If I did then E*TRADE illegally recorded my conversation, and I could be eligible for a settlement of up to $5,000 if I filed a claim with the attorneys for the case of Greenberg v. E*TRADE.

I explicitly remember that I did receive at least one call from E*TRADE in 2007 after I asked for information about certain bonds (Principal Protected Notes) that they were offering to sell. These bonds were described in a post I wrote 3 years ago about New E*TRADE Offerings. For the record, I never did buy the bonds, but a broker called me to explain how the offering works.

Getting back to the class action, I was a little bit skeptical, but I completed the online claim form anyway. It only took a few minutes to fill in. I also remember reading some forum posts where several people expressed their skepticism that this was even a legitimate class action. In this forum, one poster even quipped that consumers might receive only $7.46 after waiting 4 years. Several people on the forum believed that this may be a scam that probably wasn't worth the trouble.

To make a long story short, E*TRADE did settle this case, and paid out $7.5 million. Of that, the lawyers took nearly $2 million, and the rest of the money was divided among the claimants. Based on the payment amount, I speculate there were probably around 10,000 completed claims. Anyway, this is an unexpected windfall for me.

I have also read that only people in California were entitled to the full $628.65. People in other states are supposed to receive one-fifth of that amount or $125.73. So, did anybody else receive a check from this settlement?


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