WASHINGTON — D.C.'s Attorney General Brian Schwalb announced Wednesday that Communion, Inc., operating as ClaimClam, will reform its business practices following an investigation by the Office of Attorney General.
ClaimClam is a company that files class action lawsuits and other large lawsuits on behalf of customers. According to the OAG, ClaimClam was preying on District residents by using predatory marketing tactics to get people to sign up for their services.
ClaimClam would create social media posts urging DC residents to take immediate actions in large lawsuits with the promise of entitled compensation. One of the lawsuits includes the OAG's ongoing litigation against RealPage, Inc and District landlords for inflating rent prices.
However, ClaimClam failed to tell residents:
- It is not affiliated with any of the cases it has been promoting.
- There are free alternative methods residents can seek to files class actions claims.
- Many of the cases they're advertising have not reached a settlement and may never will.
During the OAG's investigation, they found that ClaimClam:
- Misled customers about its lack of affiliation with the settlements.
- Failed to disclose that clients are charged 15% and in some cases 40% of their claim recovery.
- Misrepresented the status of cases, leading consumers to believe settlements are guaranteed.
- Deceived consumers about the risks of filing their own class action claim for free.
- Used predatory contact terms with consumers, requiring that they waive all rights to directly collect settlement funds and agree that ClaimClam reserves the "right to change its price and institute new charges at any time."
Under the terms of the settlement, ClaimClam will:
- Disclose that it is not affiliated with the settlement/case promoted in its advertisements and that it charges a fee for its services.
- No longer advertise that submitting a claim oneself is riskier than submitting a claim with Claim Clam.
- Release all consumers who signed up for ClaimClam's services for any private case or OAG lawsuit and notify consumers they are not affiliated with the cases.
- Pay the District $55,000 in civil penalties.
