Settlement scam
A settlement scam is a fake email, text, call, website or check that uses a real or invented class action to steal your money or personal information.
Also called: class action scam, fake settlement, settlement payout scam
A settlement scam is a fake email, text, call, website or check that uses a real or invented class action to steal your money or personal information.
What it means
A settlement scam is a fraud that borrows the look of a class action settlement. The scammer may send a fake notice by email, text or mail, set up a copycat claim website, call to "help" you collect, or mail a check that is not real. The goal is to get your money or your personal information.
Real settlements work differently. The notice names the case and the court, points to an official settlement website and a settlement administrator, and does not ask you to pay anything to receive money. The FTC's advice on refunds applies here: do not pay anything in advance to get a refund or help getting one.
Common warning signs include a fee, a "tax" or a "processing charge" to release your payout. Others are a request for your online banking password or full Social Security number, pressure to act right now, and a web address that did not come from the official notice.
What it means for you
Before you click, find the case on your own. Search the case name with the word "settlement" and compare the web address with the one in the court-approved notice or on the administrator's site. A real administrator can email or mail you, but will not ask you to pay to be paid. If something feels off, do not reply or call the number it gives. Owed finds settlements you may qualify for and opens the official claim form, and you submit it yourself. Filing directly with a settlement administrator is free.
Example
Say a text says you won a share of a settlement and must pay a $9 "release fee" at a link. You never filed a claim. You search for the settlement name, find the official website listed in the court notice and see no such fee. You delete the text, forward it to 7726 and report it at ReportFraud.ftc.gov.
FAQ
Check that the notice names a real case and court, then find the settlement website on your own and compare it with the notice. A real administrator never asks you to pay a fee to receive a payout, and you can usually look the case up on the court's docket.
Stop all contact, change any passwords you shared, tell your bank or card issuer right away and report the scam at ReportFraud.ftc.gov. If you shared your Social Security number, IdentityTheft.gov has recovery steps based on what you gave out.
Related terms
- FTC, Refund and recovery scams
- FTC, Equifax data breach: beware of fake settlement websites (consumer alert)
- FTC, How to recognize and report spam text messages
Updated Oct 18, 2026. Plain-English definitions for general information — not legal or tax advice.