Classmates users to split $2.5M in suit over phantom friends

See who’s signed your guestbook!

Classmates.com users will be splitting $2.5 million among themselves in the latest proposed legal settlement over those email marketing tactics used by the Seattle-based social network to get people to pony up for premium subscriptions.

Under the deal, Classmates users will be eligible for part of the money if they registered with the service between October 2004 and February 2011. The case was originally brought by Classmates users who received emails suggesting that old friends were trying to connect with them — persuading them to pay for the service when, in reality, no one was actually looking for them.

The settlement received preliminary approval from a federal judge last month, and Classmates users have now started receiving notice of the settlement via email. The notice cites a possible payout of $10 per person, but that’s purely an estimate.

Here’s the interesting part: Under the agreement, the total payout of $2.5 million is fixed. So if you file a claim, and the settlement wins final approval, the amount you get will depend on how many other people file claims, as well. For example, if 250,000 people file claims, the payout will be $10 each. If it’s fewer than that, the payout will be more for each person.

In other words, in an ironic twist, the size of the payout will depend on the number of people still paying attention to emails about Classmates.com these days.

Which means the odds are working in your favor if you file a claim.

Classmates, a unit of United Online Inc., has been struggling to keep pace as Facebook has emerged as the preferred — and free — destination for many people seeking to reconnect with high school and college classmates. Earlier this year, United Online launched a new, overarching brand for the site, Memory Lane, as part of a new focus on nostalgic content.

Under a previous settlement agreement, Classmates.com had agreed to pay up $9.5 million to resolve the case, but U.S. District Judge Richard Jones in Seattle nixed that deal after only 17,000 of an eligible 3 million paying Classmates subscribers filed claims for a $3 cash payment — which would have required the company to pay a mere $51,000.

That’s why the revised settlement instead sets a fixed amount that will be split among the people who file claims. It also eliminates the previous distinction between people who paid for the service and those who registered as free users.

See the settlement website for more information. Claims are due by Nov. 18, and a final approval hearing is set for Dec. 15.

The settlement requires Classmates to put a disclaimer at the bottom of the email that reads, in part, “Any member can leave their name in any other member’s Classmates Guestbook simply by visiting that member’s profile, so you might not know everyone who signed yours.”

The agreement also keeps Classmates from using the term “guestbook” as a standalone term in the email subject lines. Instead, it calls it the “Classmates® Guestbook.”

Really, the effect is much the same. For example, one recent email I received came with the subject line, “Someone signed your Classmates® Guestbook this month. Take a look!” Clicking through, it prompted me to pay for an all-access pass to find out who signed it.

The disclaimer at the bottom of the messages wasn’t included in the first proposed settlement. But Judge Jones himself is still skeptical about the practical impact of the restrictions. Despite giving the latest settlement preliminary approval, he wrote in a footnote to his ruling, “The court continues to question whether the injunction provides meaningful relief, despite the change.”

Perhaps more notable, at least as a sign of the times, was the recent email from Classmates with this subject line: “Like us on Facebook and enter to win an iPad 2.”

  • Anonymous

    I wasn’t that impressed with classmates.com.  I graduated from Juniperro Serra High School, Class of `92, but I was shown a Class of `78 yearbook.  Jeez, at least they could have gotten the decade that I graduated from right.  It was beyond ridiculous. 

  • olga

    how can we know how many people filed a claim. I got less in the settlement than what I originally paid to become a member of classmates…..rip off.