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A Final Settlement: Robinhood Admits to Sending Unsolicited Texts

A court in the state of Washington has finalised a $9 million settlement between Robinhood, a cryptographic and stock brokerage platform, and investors who claimed the company sent unwarranted text messages.

The Lawsuit

The lawsuit filed by Cooper Moore and Andrew Gillette claimed that Robinhood’s referral programme violated the Washington Commercial Electronic Mail Act and the Washington Consumer Protection Act, as it sent promotional text messages to thousands of residents without their permission.

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The Referral Programme

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Robinhood’s referral programme worked by allowing existing users to send referral links to their contacts, inviting them to join the platform. When the recipients clicked on the links, signed up, and became users as well, both the referrer and newcomer would receive a reward in the form of stocks.

Claiming Unfair Advantage?

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The programme enabled Robinhood to leverage its present user base to expand its reach and user interest. However, the plaintiffs argued that the lack of consent from the recipients meantRobinhood gained an unfair advantage, despite the rewards offered.

The court approved the settlement based on the terms being “reasonable” and “adequate in light of the complexity, expense, and duration of the lawsuit.”

A Win for Consumers

The settlement has a favorable outcome for the approximately 827,427 consumers who allegedly received the texts. “This is an excellent result for the claimants,” the motion stated.)

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Each participating claims member is expected to receive a cash return between $111 and $170, given the number of validated claims. Over51,000 claims were submitted as of the notice plan approved by the judiciary, with a 96% successrate.

Robinhood agreed to pay $9,000,000 to establish a non-reconversion settlement fund for the benefit of the selected class members who filed claims.( page-break-before: always )]

The counselors for Moore and Gillettealso received court approval for $2,250,000 in attorneys’ fees and $142,000 in litigation expenses from the settlement fund. the pairing, meanwhile, has been granted $15,000 each in service fees for acting in the case.

Conclusion

To summarize, the court has given validation to a $9 million settlement arrangement between Robinhood and its claimors. The settlement was brought from a lawsuit claiming that Robinhood sent the promotion text messages without the recipients’ proper consent. The settlement aims an excellent outcome for the over820,000 consumers who were reached by the messages.