MAC Cosmetics, Inc. (MAC) has settled a proposed class action suit filed in Massachusetts federal court, which alleged that it illegally obtained customers’ zip codes at the point of sale. MAC has agreed to set up a fund totaling $365,000 to issue gift cards to approximately 86,000 former MAC customers who purchased MAC products starting in the fall of 2009. The case alleged that the customers were asked for their zip codes to complete the transaction of purchasing MAC products in stores in Massachusetts, and after the zip codes were given, MAC used the zip codes to cross reference customer names with the zip code to obtain the customers’ full address. Thereafter, MAC allegedly sent the customers unwanted advertisements. MAC disputes the allegations.

The kicker is that the proposed attorneys’ fees agreed to will be $107,000 and the lead plaintiff will also receive $2500. The settlement has to be approved by the judge before it becomes final. The named plaintiff and her attorneys are making the rounds and already settled similar suits with Urban Outfitters Inc. and Free People LLC earlier this year.