There's one born every minute, and my minute took place after the phone rang in the fall of 1984.
On the line: a Prudential salesman who told me about a great "investment" opportunity.
We met, and I agreed to pay $300 or so every three months for a whole life insurance policy. After all, I was told, I could retire comfortably by signing on the dotted line. At the time, I was fresh out of college. (What was I thinking?)
About a year later, I woke up and realized that someone age 22 and just starting out on a career path does not need life insurance.
I let the policy lapse. End of story? Not yet. A few years later my name was added to a class-action suit against Prudential related to deceptive sales practices. I was $1,200 in the hole, and hoped to recoup some of that money.
Finally, in 1997, the company agreed to pay $2.6 billion to settle the suit. I never saw a dime.
My benefit from all this legal work was the opportunity to buy securities through Prudential at a discount. Own another piece of the rock? I wanted to throw one.
Plenty of people have reaped such "rewards" from a class-action suit. A co-worker received $1.48 from Providian after a class-action case involving high-interest credit cards. She also got $6 from Carnival, after the cruise line settled a lawsuit over inflated port fees.
No doubt class-action suits punish naughty firms and may lead them to treat customers better. But many customers who were burned may still be steaming.
Now, as our lead story explains, a whole new round of class-action suits related to securities fraud has begun. Will investors recoup their losses? Perhaps some will.
But don't hold your breath.