Lawsuit Loan “Vultures” are Predators of Your Cash

Looks like the latest form of lawsuit abuse comes at the hands of lenders—who all too frequently resemble large, dirty, birds of prey.  

Last week, the American Tort Reform Association issued a paper on the problem of lawsuit lenders, who charge outrageously high interest rates to plaintiffs. On its new website, the group explains many different aspects of this problem, along with the trends it may cause such as increased litigation in already packed courts and financial abuse to those who can’t afford a proper lawyer in the first place. States are beginning to notice too. The website writes that ten bills were introduced at the state level to solve this, but all of them failed to pass.

How does it work? According to the Americans Tort Reform Association, “lawsuit lenders advance money to potential plaintiffs, allowing them to pursue legal action against alleged wrongdoers.” All too frequently, the lenders charge extremely high interest rates after the trial.    

Today, the New York Post featured the same problem in an article on a Brooklyn firm LawBuck$ that charged a victim Joseph Gill a preposterous 70 percent interest rate. LawBucks$ is billing victim Gill $116,000 for a $4,000 loan he took to cover legal costs when he was inaccurately arrested for robbery and injured in the process. Besides the obvious financial fraud, this method creates two lawsuits when there should have only been one.

While it may be happening more frequently, this abuse of lawsuit loans, or lawsuit loan sharking as we call it, is nothing new. Lawsuit lending is about winning fast money by abusing the legal system-- not transparency and justice.  Around here, we call that abuse. Our courts should be a place where justice reigns, and participants are not prey to outside abuses.