They come in the mail like sweepstakes offers, promising cash, new products, or stock warrants to anyone harmed by, say, tainted spinach, securities fraud, or a spontaneously combusting laptop.

Though most people toss such notices in the trash, they are emblematic of a lucrative, if little-known, adjunct to the business of class-action lawsuits: the $1 billion industry of class-action administration.

Class-action administrators not only identify and notify potential beneficiaries of class-action litigation; they also send out mass mailings, process claims, and ultimately determine who receives compensation. But with little or no oversight from the courts, or even from the lawyers who hire them, administrators may not be giving class members their due.

"These firms are operating completely below the radar," said Lester Brickman, a class-action expert and a professor at the Benjamin N. Cardozo School of Law at Yeshiva University, in New York.

At most, an administrator might be required to file an affidavit with the court, stating how much of the settlement money was ultimately distributed and the number of claimants receiving it.

"There are never any specifics, who exactly is getting what," says Brickman. Nor is it usually known how diligent the administrator was in contacting potential class members.

Since defendants often keep unclaimed funds, they have no particular investment in the scrupulous administration of settlements. Also, "the judge just wants to get the case off the docket," said Michael Perino, a professor at St. John's School of Law, in Jamaica, New York, who has authored several articles on class-action litigation.

Then there are plaintiffs lawyers: Having already pocketed their fee, they have little incentive and perhaps few resources to check up on administrators, especially when there are millions of people in a class.

"There's a certain amount of good faith that administrators will do what they say they will do," said John Nadolenco, a partner in the class-action group at Mayer, Brown, Rowe & Maw in San Diego.

Plaintiffs and defense lawyers typically select settlement administrators by mutual consent. "There aren't that many to choose from, so it's pretty easy to agree on who you're going to use," said Lewis Kahn, managing partner at Kahn Gauthier Swick, in New Orleans, which specializes in product liability and stock-fraud class-actions.

The most popular administrators include Garden City Group, of Melville, New York; Poorman-Douglas, of Beaverton, Oregon; Gilardi & Co., of San Rafael, California; Analytics Inc., of Chanhassen, Minnesota; and Rust Consulting, of Minneapolis.

Though administrators occasionally submit bids for large contracts, many times lawyers choose firms based on past experience. "It'd be really hard to break into the field, since no one wants to use someone they don't have any experience with," says Nadolenco. Administrators are paid a flat fee out of the settlement fund. Compensation can range from thousands to millions of dollars, depending on the size and complexity of the job.

"With a cap on their fee, there's only so much an administrator can do to get in touch with class members and still make a profit," said Francis E. McGovern, a professor at Duke Law School, in Durham, North Carolina, and an expert in mass-claim litigation. "I'm not sure there's abuse going on, but there are obviously inherent problems with the system."

Administrators said it would be against their interest not to be conscientious in executing settlements. "This is a very small market, and you live or die on residual good will," said Richard Simmons, president of Analytics. "You survive by not screwing up."

And that requires a technologically sophisticated operation capable of tracking tens of millions of pieces of mail, not to mention every call received by toll-free call centers.

"The amount of data you have to keep track of in this business is enormous," said James Blayney, president of Rust Consulting, which has a 1,200-line call center and 135,000-square-foot sorting and storage facility. "No one may ask to see all that data, but we have it should they ask for it."

Although the Justice Department has no reliable statistics, court watchers report that the volume of class-action suits filed each year has mushroomed in the last decade. To be sure, the number of lawyers specializing in class-action cases has grown significantly. There were 100 members of the National Association of Consumer Advocates 12 years ago; there are more than 1,000 today.

"I used to be the only one doing class-actions in the Seattle area in the '80s," said Steve Berman, managing partner of Hagens Berman Sobol Shapiro, a firm with headquarters in Seattle that has been involved in several large class-actions against the likes of Microsoft and Boeing. "Now there are at least six firms doing it."

Thousands of class-actions are currently pending in U.S. courts, including suits against Apple, Microsoft, Visa and Mastercard, Enron, MCI Worldcom, Ace Cash Express, eHarmony, Tenet Healthcare, and Martha Stewart Living Omnimedia, not to mention several spinach producers, peanut-butter makers, pet-food manufacturers, toy companies, cigarette makers, and drug companies.

The size of classes and the resulting settlements is growing too. "With better communication and the advent of the internet, the potential magnitude of fraud increases," said Simmons.

That may be bad news for society, but it's good news for administrators.

"They're the black box of class-action litigation," said Perino. "No one really knows what they're doing, but they're making a nice living doing it."