Stop letting the skeevy legal lending industry make bank off New Yorkers
NY Post
It’s time to crack down on the skeevy lending practice that’s draining New Yorkers’ wallets.
It’s good news that a coalition of business, labor and government groups are calling on state Comptroller Tom DiNapoli and city Comptroller Brad Lander to look into whether state pension funds may be supporting third-party litigation funding (TPLF) — and urging divestment if they do.
But more needs to be done: The shady, unregulated industry needs to be reined in hard.
Even in cases where a plaintiff has a legitimate complaint, this racket isn’t much better than loan-sharking: Investors offer cash advances to cover living expenses and other costs while a lawsuit settlement is pending — and then charge sky-high interest rates of up to 200% if the plaintiff wins.
The most vulnerable plaintiffs, who can’t cover bills while they wait for a payout, are the most likely to take this raw deal.
And there’s plenty of evidence that such lending also encourages frivolous lawsuits by offering plaintiffs who don’t have a strong case (and the law firms that go out of their way to find people willing to sign onto bogus lawsuits) a win-win situation: If the lawsuit fails, plaintiffs pay nothing.
