They're not, but they're a solution to a basic structural problem in the law. In countries like the US that depend on private suits to accomplish what in some other countries would be done through government enforcement actions, it becomes possible to profit by screwing over a large number of people for a small amount each. If that amount is less than a threshold, it becomes unprofitable to litigate, and only a few such claims will be brought, far less than the actual damages caused by the company.
http://ndy.gd/JJgB
edit: added trust quote.