Lawsuit Loans Target the Injured
For many who have suffered injury and are waiting on an eventual settlement, some significant risks to their finances come in the form of lending proposals from companies looking to profit from victims’ crises. These “lawsuit loans” are becoming a popular way to hold cash-strapped families to extremely high interest rates.
A January 16 New York Times story elaborates on lending companies such as Oasis and LawCash that have obtained huge sums of money from injured plaintiffs in states like New York and Colorado. In some cases, according to the article, an initial loan of less than half of the settlement amount ate up the entire settlement within less than a year and a half.
How does this happen? Industry media sources show that lawsuit loans are relatively unregulated, and they allow unscrupulous and predatory lenders to charge more than 100 percent annual interest. This is something that most finance professionals agree is an egregious cost for any kind of loan. Although lawsuit loans are not subject to a lot of interest rate limitations in the majority of states, state governments are already looking at curbing these lending practices in the same way as they are targeting similar payday loan and auto title loan companies. Consumer advocates point out that lawsuit loan companies tend to use some of the same predatory tactics that the payday loan and auto title loan companies do, including deceptive advertising on daytime television, tricky rate hikes or other things hidden in loan agreement documents.
The last thing that injury victims need is a dishonest lender trying to take advantage of their misfortune. If someone in your family is waiting on a potential settlement, talk to our California personal injury lawyer, Samer Habbas. Mr. Habbas is experienced in helping injured clients through all of the steps involved in pursuing a personal injury claim. Call 888-848-5084 to find out what The Law Offices of Samer Habbas can do for you. Contact us today to schedule a free consultation.