Eduard Korsinsky
When you receive a class action notice in the mail, it means the sender has identified you as part of a “class” of hundreds, thousands, or even millions of people eligible to submit claims for compensation from a settlement. The prevailing myth is that you need a folder full of evidence to receive compensation, or even to participate at all.
Typically, you do not need your own proof of damages to join a class action lawsuit. Class actions specifically include large groups of people who suffered the same type of harm, whether or not they kept meticulous records. However, proof may become crucially important when it’s time to determine how much compensation you receive.
How Class Actions Work: The “Strength in Numbers” Principle
Class actions help to balance the scales between defendants, often a large corporation, and a group of individuals who have each suffered a relatively small loss.
It’s not economically feasible for a single person who, for example, was overcharged by $30 to hire a lawyer and sue a multinational corporation. But if 10 million people were each overcharged $30, that represents a $300 million error. A class action brings all these small claims together in a single lawsuit. In this way, the class action is a strong deterrent against corporate misconduct.
Automatic inclusion is key to how class actions function. Rather than require every single potential class member to appear before the court, the vast majority of class actions automatically include every eligible individual in the class.
The Two-Stage Process: Class Membership to Claiming Compensation
Being included as a member of the class is not the same as receiving or being selected to receive compensation. In most cases, class members must submit claims to receive compensation.
While some class action settlements offer some form of compensation to every class member (such as credit monitoring and identity protection services in a data breach settlement), you might not be eligible to receive additional relief without submitting proof of how you were affected by the conduct and events at the heart of the lawsuit.
Stage 1: Becoming a Class Member (The “No Proof” Phase)
For the vast majority of consumer class actions, you are automatically included as a class member if you meet the objective criteria approved by the court. You can think of your inclusion in a class as an invitation to submit a claim for compensation.
How it works:
The Court Defines the Class: The judge approves a clear definition, such as: “All persons in the United States who were customers of Company X between January 1, 2020, and December 31, 2022.” Or, more specifically, for example, “All individuals whose personally identifiable information was compromised in the Lessing’s Hospitality Group Data Breach of August 2025.”
The Company Has the Records: The defendant company – not you – is responsible for identifying who falls into this class. They use their own internal records: sales databases, customer lists, mailing lists, or breach logs.
You Receive Notice: If the company has your address, you will receive a formal notice in the mail or via email informing you of your inclusion. Your name is essentially on the guest list.
Key Takeaway: You do not need to dig up an old receipt or find a product box to “prove” you belong. The company’s data is the primary evidence used to define the class. Once you have been identified, you’re in!
Stage 2: Claiming Your Compensation( The “Proof May be Needed” Phase)
Even after becoming a member of the class, you must file a claim to receive monetary compensation. The court approves the settlement agreement, which outlines different tiers or types of compensation, usually based on how the lawsuit affected you—for example, whether you suffered fraudulent charges (and for how much) after your data was exposed.
The need for proof depends on which tier you fall into, and its associated instructions on the class action notice and claim form..
The Three Common Tiers of Compensation:
1. No-Proof / Automatic Benefits: These are often offered to every single class member regardless of individual harm. While in some settlements, it is possible to receive such compensation without filing a claim form, you should read your notice and claim forms carefully to see what is required in your case.
Example: In many data breach settlements, all class members are offered several years of free credit monitoring and identity theft protection services. You only need to file a claim to activate this service; no proof of actual harm is required.
Other Examples: Small, flat-rate cash payments (e.g., $25) sometimes only require you to sign a claim form under penalty of perjury, attesting that you are a class member.
2. Proof-Based Reimbursement: This tier is for class members who suffered specific, out-of-pocket financial losses.
What kind of proof?
- Bank or Credit Card Statements: Showing fraudulent charges or fees incurred due to the incident.
- Receipts: For costs like purchasing credit-freeze services, identity theft protection, or even postage spent mailing documents.
- Bills: For accounting services, legal fees, or other professional help required to deal with the fallout.
Example: If your data was breached and you can show a statement with $500 in fraudulent wire transfers, you could be reimbursed for that full amount upon submission of the statement.
3. Compensation for Lost Time: Some harmful events, including data breaches, force class members to spend hours dealing with the aftermath. Settlements may offer compensation for time spent.
Proof Required: This usually requires you to submit a detailed, sworn statement (an affidavit) describing the tasks you performed and the time you spent. While you don’t need a receipt for your time, the court requires you to be truthful and specific. Payments are often capped at a certain number of hours and an hourly rate (e.g., $25/hour for up to 5 hours).
A Real-World Case Study: The Equifax Data Breach Settlement
The Equifax settlement is a perfect example of this tiered system in action. After the personal data of nearly 150 million people was exposed, victims joined together in a massive class action.
- Who was a class member? Anyone whose data was in the systems Equifax identified as compromised. No proof required for membership.
- What was offered?
- Free Credit Monitoring: For everyone. No proof required.
- Flat-Fee Cash Payment: Alternatively, you could choose a small cash payment (initially $125) instead of monitoring. This required a simple claim form.
- Reimbursement for Losses: Full reimbursement for any money lost due to the breach or money spent on preventative measures (like freezing your credit). This required documentation like bills, account statements, or receipts.
- Payment for Time: Up to 20 hours of time at $25 per hour if you spent time dealing with the breach aftermath. This required a detailed description of your efforts.
This structure ensured that every victim received something, while those who could document greater harm were made more whole.
The Critical Difference: “Opt-Out” vs. “Opt-In” Class Actions
Another factor that influences the proof requirement is the type of class action.
- Opt-Out Class Actions (The Standard): This is the model for nearly all consumer cases. You are automatically included unless you take the affirmative step to exclude yourself (opt out). This model maximizes participation and strength-in-numbers. You do not need to provide proof to be included.
- Opt-In Class Actions (The Exception): Used in some employment lawsuits under specific laws like the Fair Labor Standards Act (FLSA), this model requires you to actively notify the court that you wish to join the lawsuit (opt in). This sometimes requires you to state your intention and may involve providing basic proof of employment. These are less common for general consumers.
Your Action Plan: What to Do When You Get a Notice
- Don’t Ignore It: The notice is not junk mail. It is a court-authorized document informing you of your rights.
- Read for Key Details: Identify the class definition, the deadline to file a claim, the deadline to opt-out, and the types of compensation available.
- Visit the Official Settlement Website: The notice will provide a website address (e.g., XYZSettlement.com). This is the ONLY place you should get information and file a claim. Avoid look-alike sites run by scammers.
- File a Claim – Always: Even if you think you have no proof, always file a claim. You could be eligible for the no-proof tier of benefits (like credit monitoring or a small cash payment). By not filing, you are leaving money on the table and reducing the defendant’s penalty.
- Gather What You Can: If you remember spending time or money dealing with the issue, try to find any documentation. Even if you don’t have a perfect paper trail, a well-documented sworn statement can sometimes be sufficient for time compensation.
- Understand the Deadlines: The claim deadline is absolute. Courts almost never accept late claims. Mark it on your calendar.
The class action system is deliberately designed to be accessible. The barriers to entry are low because the goal is to achieve collective justice, not to reward only the most organized record-keepers.
If you receive a notice, your takeaway is simple: Your inclusion is automatic, and your participation is valuable. Even if you aren’t sure you can provide receipts, you may still be entitled to the base-level compensation that your participation helps secure for the entire group.
For those who can document their losses, the system provides a pathway to fuller recovery. Sometimes, the greatest harms are the invasion of privacy, the loss of time, and the erosion of trust—things that are real and worthy of compensation, even if they don’t come with a paper trail.
If you believe someone compromised your information but you never received a notice, visit our blog to learn your rights and check whether you qualify for a data breach lawsuit.
FAQS
Usually, no. You typically don’t need to provide proof to join the class. In most cases, you automatically become a member if you fit the definition (e.g., your data was exposed in a specific incident like the NPK International Inc. data breach). Proof will likely be relevant later when you file a claim to determine the level of compensation you may receive.
Proof typically includes documents that substantiate financial losses or time spent. This can mean, for example, bank or credit card statements showing fraudulent charges, receipts for credit-freeze services, bills for accounting help, or a detailed log of hours spent recovering from identity theft.
Often, yes. Many data breach settlements automatically include everyone whose information was exposed. You may even be eligible for benefits like free credit monitoring or a flat-rate cash payment without having to prove any financial loss.
It is unlikely that you would be removed from the class for lacking documentation. Your inclusion is based on whether you meet the class criteria set by the court. Proof is not typically a factor in membership, but it does typically affect the type and amount of compensation you can claim later.
Class action attorneys investigate the defendant’s conduct to prove the case for the entire class. However, they do not investigate or submit proof of individual losses for each member. It is the class member’s responsibility to submit their own documentation for reimbursement claims.
If you cannot provide documents, you might still be able to file a claim for the “no-proof” tier of benefits if the settlement includes one. This often includes a small cash payment or free services like credit monitoring. You will not be eligible for higher reimbursement tiers that require documentation, but you will not walk away empty-handed.
Often, yes. Without documentation, you will typically only qualify for the base-level awards. Proof is often required to receive larger reimbursements for specific financial losses. Settlements are often tiered to ensure those with greater documented harm receive greater compensation.
You will usually receive a formal notice via mail or email. The notice will define the class and confirm your inclusion. If you believe you were affected but didn’t get a notice, you can check the official settlement website or our page to investigate.
In many cases, yes. A signed claim form under penalty of perjury is sometimes sufficient to receive a standard, flat-rate payment. For compensation for lost time, a detailed sworn statement (affidavit) describing the hours you spent is usually required and accepted as proof.
You should still file a claim. Always submit a claim for the benefits that do not require documentation. By filing, you secure the base compensation offered. If you don’t file, you get nothing, even if the class automatically includes you.
Ed Korsinsky is a nationally recognized consumer protection attorney and the Co-Founder of Levi & Korsinsky LLP. For over 20 years, he has fought for consumers in data breach, privacy, and consumer fraud cases, recovering hundreds of millions of dollars nationwide.
A pioneer in mass arbitration, Ed has been featured in Law360 and other national publications for his thought leadership on ensuring fairness and access to justice in consumer claims. His groundbreaking work not only delivers results in the courtroom but also forces corporations to adopt stronger protections for people’s personal information and rights.
Whether protecting victims of data breaches, challenging deceptive advertising, or leading mass consumer filings, Ed’s mission is clear: to level the playing field between consumers and corporations.
