Understanding "The Low-Value Claim Problem" That We Designed Veeto To Solve

Here is the story behind it.

We like big ideas, even if they hurt. Jack Kerouac knew what that meant. Contrary to whatever positive connotations we assign to the phrase "big idea," big ideas are not always solutions--just as, for Kerouac, a person's smile does not tell you what he is really thinking.

Jack did not think too highly of being nice for the sake of social grace, and neither do we.

It is not a smiley line of work. We do not have the luxury of always being able to form our words with friendly faces, because they are most often fighting words. For us and our faces, the only smiles cracked happen when we win. And when we win, the company we beat does not smile.

So there is that.

And there is this. Someone has to stand up to the bad guys, and we decided three years ago to fight that fight, for everyone. To fight this fight--and to win--it is more important that our words be honest and precise than inoffensive and vague.

That being the case, we just really like the double entendre of teeth, which can both conceal what people really think and, in the heat of battle, become our most primal weapon. We, of course, lean toward the weapon sense of the word (if you want to know what we really think, just read this blog).

But the teeth idea is not big. In fact, at best, it might just be clever or cute, which is not really what entrepreneurs like us see as the proper purpose of our lives. We assure you that we did not take to the trenches and found Veeto to fight for some merely clever idea.

Veeto is about something much bigger than teeth.

Sometimes, big ideas--the kind that hurt, I mean--happen when you realize you have a huge problem. You stumble upon them like an accidental witness to something you wish you had not seen. You almost wish that you had not deviated from your normal routine of thought, that you had "kept the blinders on.". Anyone who has ever happened upon this kind of big idea knows exactly what is meant by the saying "ignorance is bliss."

These inconvenient ideas slap you across the face with the realization that you are living your life every day under the weight of some massive problem that you have never even noticed before, much less know how to easily solve.

But once noticed, you cannot go back. Even if the odds are against you, you cannot walk away.

You can either roll up your sleeves and resolve to solve the problem, or you can do what most people do and just fake a smile, just grin, bear it, and pretend like it does not exist. We have already given you our views on fake smiles...

For us, that is exactly how we felt when we realized the enormity of what we call "the low-value claim problem." We will describe the problem like this:

1. Below a certain dollar value, a given claim might not be worth pursuing;
2. But not because you do not care about the claim or because it does not have value;
3. It is not worth pursuing because the cost of accessing the legal system exceeds the value of the claim.
4. This threshold is usually around $2,500.
5. When the money at stake in a given claim is $2,500 or less, most people cannot justify the cost or pursuing that claim.
6. So the opponent--usually a bad company--wins by default: they get to keep your money because you cannot afford to demand its return.

It sounds like a theme in a Charles Dickens novel, which makes for good literature (so long as the story is not about us), but most people do not think in these terms, and we understand why.

It would be terribly frustrating if you began tracking all of the money that you were otherwise entitled to but could not afford to claim. So instead of thinking of it as a legal event when something mundane happens, you choose to simply walk away and forget about it. That is not justice. That is what rationality dictates, given the economics of low-value claims, and when you realize this is true in your own life, it should hurt.

The thing about rationality, though, is that it is a two-sided equation: there is what you get and what you must give get it. Our mission is as simple as math (the 2 +2 kind): make it cheap and easy enough for people to pursue and win claims they are entitled to. By lowering the cost of what you must give to get what you are entitled to, the rationality equation spit out an entirely different dictate, a green light instead of a red one.

A metaphor we like is that of a spear. When we happened upon this problem, the spear was almost always pointing at the little guy. The bad company, the person holding the spear, would say, "yea sure, you might be entitled to this money--because we made you promises, advertised a guarantee, or otherwise duped you--but what are you going to do about it?"

We think of Veeto's job as reversing the direction of the spear. Indeed, in three years since we began working on this problem, we have absolutely seen this metaphor hold true. We know that if we can help a Veeto member craft and send a formal demand to the bad company, then we have reversed the equation. Now the bad company has to make a decision: "do I put up a fight or do I concede what I acknowledge to be intuitively fair anyway?"

We have been surprised to learn from looking at about 15,000 cases to date that, the human intuition is remarkably spot-on at determining what is fair. In practice, that means that, unless you yourself are trying to pull some fast one, if you feel you are legitimately entitled to something, not only are you probably right, but most other people--in particular, the people that really matter for the outcome of your claim, like the media and the courts--probably also agree with you.

You just need a way to afford to be heard.

Low-value claims are a kind of economic injustice, and the problem that we are chipping away at every day is this. The outcome of a claim should have more to do with its merits than with its economics. Yet 200 million US consumers today have grown up accustomed to letting economics decide what should or should not be done.

Any system in which justice is subordinate to economics is a broken one.

Famous legal jurist Richard Posner wrote "only a lunatic or a fanatic sues for $30,” and his point was that there absolutely exists a low-value claim problem that the legal system has yet to figure out how to solve.

To get Veeto off of the ground, we had to be that lunatic, because we did not yet know how to reverse the equation. It was a gamble back then. But not anymore. Three years later, with 42% market share of all US consumer arbitrations with $2,500 or less at stake and a 100% win rate, we know exactly what we are doing. We know exactly how to win low-value claims.

Since we have never lost a case, and since we have completely upended the economics of the low-value-claim problem, it is hard to make the argument that Veeto members are lunatics.

But still, being a lunatic was fun for us in the early days, and if you are only just now joining us, we do not want to deprive you of that same fun. So while we will probably continue, in the official lexicon, to refer to Veeto members as such, we are happy to knight anyone who prefers it, "honorary Veeto lunatic."

Have a low-value claim problem now? See for yourself how Veeto can solve it.