AT&T settlement could send payments of up to $5,000 to millions of Americans

Millions of Americans could receive a payment from AT&T in the coming months as part of a large class-action settlement.

The development follows recent price increases of as much as $20 for some customers.

A federal court in Texas gave final approval to a $177 million settlement involving AT&T, according to MySA.

The company agreed to the deal after plaintiffs filed lawsuits alleging it failed to put in place sufficient cybersecurity protections before two separate data breaches.

The breaches exposed personal information including Social Security numbers, phone numbers, addresses, and other data.

According to the lawsuit, more than 7.6 million active customers and 65.4 million former customers were affected.

AT&T has not admitted wrongdoing, but it agreed to pay the money to resolve the claims and compensate affected people.

Eligible class members who submitted claim forms should receive checks after the settlement becomes effective and the payment process begins.

A court memorandum says payments must be issued electronically or by paper check within 60 days of the effective date.

Under the settlement website, the effective date comes 10 days after the time to appeal the final approval order expires.

That gives AT&T a 30-day window to appeal, and if no appeal is filed, the settlement could move forward soon after that period ends.

If an appeal is filed, the effective date would be delayed until after the final appellate ruling or dismissal of the appeal.

Based on that timeline, settlement checks could begin going out as early as December, although many recipients may not see payment until early 2027.

Members of the AT&T 1 Settlement Class may receive up to $5,000 if they can show financial losses were fairly traceable to the first breach.

AT&T 2 Settlement Class members may receive up to $2,500 if they can prove losses were fairly traceable to the second breach.

Some plaintiffs said they lost substantial sums because of the breaches.

Others alleged that savings were fraudulently drained, unauthorized loans were opened in their names, or their credit scores were damaged by fraudulent account activity.

Americans also have one final chance to claim a $5,000 payment from a separate $2.8 million settlement if they act by the deadline mentioned in that case.

Selective iPhone owners may also qualify for up to $95 from a $250 million settlement.

What is a class action settlement?

Class-action lawsuits allow groups of people, or classes, to join together in court.

They are often filed by one person or a small group claiming that a company or other entity harmed many people in a similar way.

Once a case becomes a class action, it applies to all class members, meaning people with similar complaints to those who filed the suit.

Companies frequently settle these cases by agreeing to pay class members, who usually give up the right to bring further legal action by accepting the money.

Settlement deals often include a denial of wrongdoing from the defendant, and businesses may choose to settle to avoid the cost of continued litigation.

Examples that can lead to class actions include pollution, discrimination, and false advertising.