What’s the difference between opting in and opting out?

Class actions don’t normally require members to “opt in” (give their consent to be a part of the class) but they do give members the choice to “opt out” (decline to be a part of the class).

When a judge gives an order allowing a class action to proceed, this is known as “certifying” the class action. A certification order is then submitted that defines the class, its claims, and its issues.

Reasonable notice must be issued for a certified class action. Class action notice—usually issued through email, mail, or (less common these days) a newspaper ad—informs eligible class members of the lawsuit and explains their options.

Most of the time, if you receive notice of a class action, it means that you are automatically a class member; you do not need to opt into the lawsuit. You should, however, have the choice to opt out of the lawsuit.

Choosing to opt out means that you will have no stake in any awards the class might win. On the other hand, not being part of the class gives you the option to file a private lawsuit against the defendant, something you may want to do if your damages are significantly greater than those of other class members.

In rare instances, you do have to formally opt into the class. Both opting in and opting out require the submission of a form.

Read the class action notice carefully to find out what your options are and what actions, if any, you need to take.