The recent Altria class action settlement over Juul products highlights another side effect of AI: fraudulent claims in class actions.

As discussed in Legaltech^® News (The Altria Class Action: A Case Study in AI-Fueled Fraud and Mitigation Strategies, written by Bryan Heller and available here), the recent Altria class action settlement over Juul products highlights a growing concern in mass litigation: the exponential increase in fraudulent claims in class actions facilitated by generative AI.

What happened in that case? Initially expecting a manageable number of submissions, the settlement administrators were inundated with a staggering 14.4 million claims—nearly five times the anticipated volume. Lawyers attributed this surge to AI-powered programs, designed to automatically generate and submit fraudulent claims.

The ease with which AI can fabricate identities, purchase histories, and manipulate data allows these programs to exploit vulnerabilities in the claims filing process. This tactic not only strains the resources of the settlement but also complicates the process for legitimate claimants, delaying payouts and potentially diminishing their share of the settlement fund.

Unfortunately, the Altria case isn’t unique. The sheer volume of claims in a class action creates an environment ripe for fraudsters who constantly adapt their tactics. As traditional methods of detection become more sophisticated, fraudsters turn to AI-powered tools that can circumvent established safeguards. This “moving target” nature of claim fraud necessitates a proactive approach to mitigation strategies.

The article goes on to discuss mitigation strategies. While the author is the co-founder of a company that provides AI-based claim validation software, his article refrains from talking about his product and discusses the issue and strategies for addressing it.

So, what do you think? Besides fraudulent claims in class actions, what other misuses of AI have you seen in litigation? Please share any comments you might have or if you’d like to know more about a particular topic.

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