Social media companies are no strangers to data privacy lawsuits, with the latest Facebook settlement amounting to $725 million.
While this isn’t a form of passive income, claiming your share of the settlement can enable you to overcome the perils of inflation and provide yourself with some breathing room.
But time is already against you. Here’s what you need to know about this settlement and what it means for you.
What is the Facebook Settlement?
The Facebook settlement stems from accusations that from 2007 until 2022, Facebook’s parent company, Meta, improperly shared user data with third parties.
Initially, these class-action lawsuits arose from the Cambridge Analytica scandal. During this scandal, the British consulting firm worked on Donald Trump’s 2016 presidential campaign and allegedly acquired personal Facebook data from up to 87 million users (mainly in the U.S.) illicitly.
Meta has always denied that it had shared data improperly, but it agreed to a settlement to avoid trial costs. As part of the settlement, Meta isn’t required to admit any guilt relating to the accusations against it.
So, whether you consider Facebook one of the websites to make money online or just like to keep up with your friends, millions were eligible to claim a piece of this settlement.
Who is Eligible for the Facebook Settlement?
Facebook settlement eligibility can be confusing. The last thing you want to do is invest money and time into becoming a part of a class-action settlement. So, here’s a rundown of who qualified:
- It applies to nearly all U.S. Facebook users who had accounts between May 24, 2007, and December 22, 2022.
- You are still eligible even if you have since deleted your account during this 15-year period.
There is nothing more to it than that. You don’t need to spend any money to claim or consult your personal budget. It’s as easy as filling in an online form.
Note that many black financial influencers have done an incredible job raising awareness of potential eligibility during the claims period. Even if you find out you weren’t eligible, you have nothing to lose.
What is the Facebook Settlement Deadline?
Unfortunately, if you’re learning about this settlement for the first time, you have already missed out. The exact deadline was August 25th, 2023, at midnight.
Although claims still need to be approved, your time to file has long passed, meaning that if you were eligible, you would no longer be able to claim your settlement. No contingencies exist that will allow you to apply now.
How Much Money Will I Get from this Settlement?
It depends. As a type of class-action claim, the amount you can expect depends on how many people have lodged claims successfully. Until the settlement has been approved in September 2023, it’s impossible to predict how much you can add to your budget with this settlement.
However, here’s a rundown of the three primary factors:
- According to the Pew Research Center, 69% of Americans use Facebook. So, if everyone made a claim, each person would receive less than $5.
- Only a fraction of people are expected to apply, meaning each claimant will receive more.
- Long-term Facebook users will receive more money. Each claimant will receive one point for every month they had an account during the 15-year period, whether active or not. It’s this point that makes predicting the exact payout impossible until everybody’s claims have been validated.
In short, you can expect a payout to increase your income, but it won’t pay off your student credit cards or allow you to retire into a jetsetter’s lifestyle.
When Will I Receive My Money?
Since the final approval hearing has passed, you can expect to receive your money as soon as possible.
No exact dates have been provided other than payments will be distributed as quickly as possible pending final court approval, alongside any appeals that may crop up.
In particular, appeals are the biggest problem to be wary of. Appeals could come from individual claimants or Meta itself. Due to how complicated this settlement is, a broad set of appeals could delay your payment by months or even years.
Do I Have to Pay Taxes on My Facebook Settlement Money?
Yes, you do. These types of settlements aren’t eligible for a tax break, meaning you need to know how to do your taxes to account for any extra income you may have this year.
Any money you receive must be factored into your personal finance tools and counted as conventional income. So, depending on how much you earn, you may or may not lose a significant chunk to Uncle Sam.
Remember, due to the impacts of inflation, new IRS tax brackets have already been released to help hard-working Americans, so the difference in your tax bill could be negligible.
If you’re concerned about how the Facebook settlement may impact your tax situation, don’t hesitate to get advice from Hispanic financial influencers or a professional accountant.
What Can I Do With My Settlement Money from Facebook?
Don’t get your hopes up about fixing your credit score with credit repair companies or investing big money into your retirement account. Most people can expect to receive a few dollars and little else.
On the other hand, even tiny acorns can grow into massive trees, so using your money wisely can improve your prospects further down the line. Here are some ideas for how to use your pending payment:
- Use it to start freelancing and launch your own business.
- Pay down your credit cards.
- Sock it in your retirement account.
- Add it to your emergency savings fund.
Whatever you do with your money, ensure you think it through and use it intelligently.
This Facebook settlement has been years in the making. As of July, 15 million claimants had already filed for their piece of the pie. So, you can expect to receive a relatively small amount, but every little helps when it comes to growing your wealth.
At Urban Income, we support minorities in increasing their income through helpful guides, advice, and tips. To learn more about changing your family’s future, contact us now.