By Nick Kinnish, 3L
Our increasing use of technology to communicate has led to greater exposure to the many scams, cons, and fraudulent activities that unfortunately surround us every day. It is quite likely that almost everyone you know has been targeted by some kind of scam at some point. The most common forms include a job offer via a text message, a phishing email requesting urgent action, or the classic offer to share a large sum of money with faraway royalty. All of them ultimately involve the target (i.e., you) giving up something valuable in return for something more valuable. When that something never arrives, you are left out of pocket.
Sadly, these scams are so common that they make it difficult for many people to distinguish genuine from fraudulent communication.[1]
Something common we hear from our clients at the Class Action Clinic is that the litany of online and telephone scams makes them hesitant to respond to emails, answer the phone, or reply to letters, for fear of becoming a victim of a scammer. Of course, it is always better to be safe than sorry, but an overabundance of caution can result in class members missing important information and deadlines.
With this problem in mind, we wanted to highlight some genuine communications that class members should expect to receive, along with practical tips on how to check that they are not being drawn into a common online or telephone scam. But first, let’s explain how most scams work so that class members can be on the lookout for common tactics scammers use.
How Scams Work: Exploiting “System 1 Reasoning”
Online and text message scams frequently exploit a common way people reason when they must make a quick decision, known as “System 1 Reasoning.”[2] This is the kind of reasoning we use when making snap decisions about what to believe or trust, especially when under pressure. It is an important evolutionary trait that humans have developed for survival, but it isn’t perfect.
For example, you overhear a man talking about politics with a nice accent and polished language, and you think: “They know what they’re talking about.” Or you’re walking down a street looking for a place to eat. One restaurant has a long line outside; another, right next door, is nearly empty. You immediately think: “The busy one must be better.” When we do this, we’re making a kind of mental shortcut that saves us lots of time but is also prone to mistakes.
Thankfully, we also can reason more carefully and think things through to avoid making too many mistakes. This is “System 2 Reasoning,” and most of the time we have the chance to apply this to avoid making the mistakes System 1 Reasoning is prone to.
Most scams work by making it difficult for the target to engage in System 2 Reasoning, leaving them stuck in this quick-thinking but error-prone decision-making mode. Scammers do this by presenting a need for urgent action, or by offering you a “rare opportunity” with high rewards and low effort, while using titles that make them sound official and reliable. If they have it, they might even use your own name to make it seem like a genuine communication from someone who knows about you. Before you know it, if you’ve handed over your social insurance number or other personal details, the scammer’s task is complete.
Genuine Communications Class Members Should Anticipate
A feature of class actions is that important developments during the litigation should be communicated to class members. Some of these communications may even request a response from class members. Most of the time, however, the request for information will not be so urgent that you must stop what you are doing and give anyone any information right there and then. The following are a few common communications class members should expect to receive if they are involved in a class action, along with how to verify their authenticity.
Court Approved Notices
The Class Proceedings Act has strict requirements about four main forms of notice: notice of certification, notice of settlement, notice of resolution at a common issues trial, and notice of a claim process.[3] These notices are often provided by the lawyers bringing the class action (called “class counsel”) or a court-approved notice and claims administration company. Common claims administrators in Ontario and Canada are companies like Deloitte, Verita, Epiq, or PriceWaterhouseCoopers. Such notices can be sent directly to class members via email or regular mail if the class is well understood, such as members of a particular website, or home owners in a particular region. Notices are also often posted on social media or in newspapers when the class members are not so easy to reach because records are incomplete, or absent. You also might receive these because you signed up online, or because the defendant has provided your information to class counsel or the claims administration company as a potential class member. It is unlikely that you will need to respond to these notices urgently, and they will rarely require you to provide sensitive information. However, there may be deadlines for things that affect your legal rights, such as opt-out deadlines. If you are ever unsure if a notice is genuine, it is worth doing an independent Google search. Genuine class action notices will almost always be available on the class counsel or the claims administrators’ websites. If you are unsure, there should be contact information provided on the notice for you to contact for general inquiries.
Claim Status Updates & Information Requests
If you have already filed a claim in a settled class action, you might receive communication from the claims administrator. For example, if you have filed an initial claim in the Indian Boarding Homes class action, you might receive a letter to say your claim has been received, assigned a claim ID, is missing important information, or is approved. You might receive these updates or requests by email or by regular mail, depending on the option you chose when originally filing a claim.
Again, these communications should provide a date that you need to respond by, which ought to be reasonable. If you are ever unsure what these letters mean or need help getting your response in order, the Clinic is happy to help.
Remember: Fast Demands Mean Fraud’s at Hand!
Hopefully, this post is useful to class members worried about scams in the class action process. If you take away one thing from this, remember that at no stage will you be required to hand over information in a hurry or need to act right away. Even if you receive a letter requesting information or notice of an opt-out deadline, there is always enough time to verify it is genuine and avoid the risk of getting roped into a scam.[4] If you ever need help with either of these steps, don’t hesitate to contact us.
[1] The good news? The fact that they are so prevalent proves that they are very difficult to actually pull off!
[2] “System 1 and System 2 Thinking, online: The Decision Lab – https://thedecisionlab.com/reference-guide/philosophy/system-1-and-system-2-thinking.
[3] Class Proceedings Act, 1992, SO 1992, c 6 at s 17-22.
[4] “Slow Down Your Thinking to Spot Fake Website” online: University of Southampton –https://www.southampton.ac.uk/news/2023/04/slow-down-your-thinking-to-spot-fake-websites.page