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Can you get money before your settlement? Yes, you can with a settlement loan. But you are on the fence whether you should apply for a lawsuit settlement advance or not. If you’re not sure what pre-settlement funding is, pre-settlement funding is simply a cash advance on your case. Nonetheless, you know you have to make a decision soon on your pre-settlement cash advance. With a stack of medical and utility bills piling up and little to no revenue trickling in, you are on the brink of foreclosure and eviction.

While friends and family would love to contribute, they don’t have the available funds to help out. Even with these types of conditions, you still are not sure whether you should pull the plug and take out an advance on your lawsuit settlement. Should you consider lawsuit loan funding, or shouldn’t you?

You see, having started in the 1990s, the lawsuit loan funding industry is a relatively new field in which state and federal regulations still have not caught up to. What we have said time and again in our articles—and that is worth being said here—is that no lawsuit loan company is the same. In other words, some are more and less reputable (and ethical) than others when it comes to pre-settlement loans.

Even in states that have more standards for lawsuit loan funding companies, plaintiffs have to be their own regulators when it comes to getting a lawsuit cash advance from a legal funding company, assessing what smells suspicious and what doesn’t when it comes to advances on your lawsuit settlements.

To help you with your potential class-action lawsuit settlement advance, here are several shady pre settlement lawsuit loan funding scenarios that range from slightly shady to outright scam. Plus, what you can do to decrease the chances of falling for one of these. These are not scenarios that the best lawsuit loan companies will put their customers in.

 

#1. Repaying Money You Never Borrowed in the First Place For Your Pre-Settlement Cash Advance

Sue’s trial was pending and, due to the major car accident she was victim to, she couldn’t go back to work. At the time, she thought it couldn’t hurt to fill out an application or two for a lawsuit settlement advance.

A month later, to her surprise, a family member was able to lend Sue the money she needed for her medical bills. She contacted the lawsuit loan funding companies to tell them she wasn’t interested in moving forward in the application process.

To her surprise, months later, she received a call from one of the lawsuit loan funding companies telling her she needed to pay back the money she had borrowed. Sue was confused; she had never accepted a cash advance, much less was she offered one.

A few weeks later, she received a second call, notifying her that if she didn’t “pay back the loan,” she would be sued and would be at risk of asset seizure and yes, even arrest.

Afraid she would face legal repercussions—even though she had never borrowed money from the company nor signed a contract stating she would—she gave them the money.

What Happened?

Sue did nothing wrong. No matter where you are in the lawsuit settlement advance application process, you can always back out. This scenario is none other than a shining example of a loan collection scam.

The agency, which could have just been a front, got Sue’s contact information from the application she had filled out. And, using intimidation, bullied her into giving them money.

What stood out was that, despite the many threats the “collection agents” were delivering, they never provided Sue with any physical proof that she had borrowed money from them—that’s because she didn’t.

What Can You Do?

If you find yourself in this situation for a pre-settlement loan on an auto accident, hang up the phone and contact your attorney to see what your legal options are. What you don’t want to do is hand over the money for one of two reasons:

  1. You don’t owe the lawsuit loan funding company any money. And
  2. It could encourage the lawsuit loan funding company to call you again, insisting that you still owe more.

 

 

#2. Sneaking Details into the Fine Print

Ronaldo needed some cash fast, as it wasn’t looking like he’d see his day in court for that class-action suit anytime soon. His credit score was low and he had already pulled from his home equity loan and 401(k).

Having been repeatedly denied for a traditional loan, Ronaldo decided to apply for a lawsuit settlement advance. In a couple of days, Ronaldo received a call back from the lawsuit loan funding company telling him the good news: his application was accepted and they would give him a lawsuit settlement advance. Ronaldo went down to the lawsuit loan funding company’s office and, having read the contract, signed it.

Luckily for Ronald (and the lawsuit loan funding company), he was awarded an advance on his lawsuit settlement. It was only after being given the settlement when Ronaldo was instructed that he needed to pay back the loan—and the interest, which had accrued to over 100% annually.

Ronaldo couldn’t believe the high-interest rate (which was over the capped interest rate for traditional loans). Unfortunately, the details about the high-interest rate was in the fine print.

What Happened?

In some states, lawsuit loan funding companies can dodge the usury and fair-lending laws traditional banking institutions have to abide by. For some, this may mean that the lawsuit loan funding industry isn’t required to cap their interest rates at a certain marker. Yes, some lawsuit loan funding firms may argue that their reason for charging such a high rate comes down to a lessened guarantee of being paid back.

Unlike traditional banking institutions, lawsuit loan funding companies normally don’t run a candidate’s credit history report or check for employment—which increases risk.

Also, depending on the lawsuit loan funding company’s policies, this could be a non-recourse loan in which plaintiffs don’t have to pay the lender back if they lose their case.

Nonetheless, it is suspicious for a lawsuit loan funding company to hide the interest rate (and any other fees) in the fine print.

What Can You Do?

Before you sign the lawsuit settlement advance contract, talk with your lawyer and make sure he or she reviews and gives you his or her professional legal advice. You need to know what you are getting into and what legal options you have should there be a contract dispute. Your lawyer cannot deny you from getting a settlement loan, but they can make sure to give you the best advice on what actions to take.

If you have already signed the contract without the presence and feedback from your lawyer and are stuck in a situation like Ronaldo’s, you still need to make that call. From there, your attorney can instruct what legal avenues you can take.

Also, as a word of caution: always, always, always ask questions about your advance on lawsuit settlements contract. The truth is, some lawsuit loan funding companies are vague about interest rates and any other fees, and only are up front about them if you ask.

 

#3. Encouraging You to Not Have an Attorney Present

Akeno made the decision to go forward and sign the contract for the lawsuit settlement advance. Unlike Ronaldo, Akeno knew about the interest rate (and other fees) he would have to pay should he win a settlement.

However, the lawsuit loan funding company Akeno was dealing with told him he didn’t need to contact or bring his attorney to their meetings. This made Akeno suspicious, especially since having his attorney present could legally benefit the lawsuit loan company as well.

What Happened?

Not encouraging or recommending Akeno to have his lawyer present is a questionable move on the lawsuit loan funding company’s part.

Worst case scenario, the lawsuit loan funding company is hiding something in the contract that gives them a better deal. Best case scenario, they could be inexperienced and not think having a lawyer present is necessary.

What Can You Do?

Take note of this red flag and decide if you want to proceed with your lawsuit settlement advance. You may want to talk to your attorney about this to see what he or she thinks.

If you do go forward, be adamant that your attorney is present at all of the meetings and that he or she must review the contract before you consider signing it.

 

#4. Encouraging to Consult with THEIR Attorney

Olivia had some legal questions about her lawsuit settlement advance. She was on the fence whether she should go ahead and sign the contract. Yes, she needed the advance on her lawsuit settlement to pay for everyday necessities like food, gas, clothes, utilities, and her mortgage.

Without having any other financial options left, she was considering taking out a loan. Still, one thing made her suspicious. The lawsuit loan funding company mentioned that their attorney would be happy to sit down and discuss any legal questions she may have not only about the contract but about the lawsuit loan funding industry.

At first, Olivia considered taking the loan company up on its offer but then decided to go to her own attorney instead; something didn’t seem right.

What Happened?

In this scenario, Olivia chose the safer option to consult with her attorney instead of the company’s. Remember, the attorney who works for the lawsuit loan funding company represents just that: the lawsuit loan funding company. This means it is not a shoe-in that Olivia’s best interest will be taken into consideration.

What Can You Do?

It is because of this, plaintiffs should look to THEIR attorney for legal advice before they accept the lawsuit settlement advance. In doing so, since you are the client, you know you will receive advice that is in your best interest, and no other party.

 

#5. Advertising “Fast and Easy Cash” But Not Mentioning What Comes with It

Aaron saw an advertisement on TV, telling plaintiffs who have pending lawsuits and are awaiting judgment to contact this particular lawsuit loan funding company to get a “fast and easy” cash advance on lawsuit settlements.

He had seen these advertisements before but had ignored them. Now that he was just such a plaintiff involved in a personal injury suit, he was all ears. He needed the fast cash.

He had slipped and fallen on the job, and was now out of work because of his injury. With no income, he had defaulted on his car and mortgage payments. With the promise of being given “fast and easy cash,” Aaron made the call.

What Happened?

It is not uncommon to see advertisements on TV, billboards, and benches promoting lawsuit loan funding companies. Promising plaintiffs “fast and easy cash,” such advertisements can lure plaintiffs to call these companies, apply for the lawsuit settlement advance, and sign the contract without knowing more about the strings that are attached to the claims.

You have to remember that lawsuit loan funding companies are businesses. They have to make money from these loans, which means plaintiffs most likely will be paying back the principal and interest (whether compounded or simple) and any other included fees.

What you probably don’t see on these ads is how much interest you will be paying and if there is an application fee. According to Fox Business, some lawsuit loan funding firms can charge as much as 2% to 4% in compounded interest on top of any extra fees.

What Can You Do?

That is not to say that every lawsuit loan funding company who runs an ad is shady. It just goes to show that plaintiffs can’t get lured into what is being advertised without knowing what strings come with it.

In short, don’t be afraid to ask questions about the company’s interest rates (or “finding fees”), and make sure you get their answers in writing.

 

#6. Just Abiding by Industry Standards

Sonya needed to get a cash advance fast. Even though she was able to go back to work after the car accident, she wasn’t bringing in enough to pay for her bills.

Besides, she thought the offer the insurance company had given her was too low. She needed more time at the negotiating table. However, she had no more financial options available other than taking out a lawsuit settlement advance.

After a few weeks of applications, Sonya received a call from one of the lawsuit loan funding firms telling her she had been approved. She was elated. Still, something didn’t sit right with her when one of the employees at the company assured her that they abided by industry standards.

What Happened?

Sonya has every right to be unsure about what the representative said. The truth is, you don’t know what “abide by industry standards” means.

In states such as Main, Ohio, and Nebraska, lawsuit loan funding regulations are very lenient, not having as many limitation as regular loans do.

It is also noteworthy to keep in mind that industry standards for the lawsuit loan field are not the same as with a more traditional loan.

What Can You Do?

The last thing you want to do is assume you know what the representative is saying when he or she mentions “industry standards.” Ask the hard question— “what are industry standards for an advance on lawsuit settlements?” —and have him or her put the answer in writing.

It also goes without saying that you need to have your attorney present so he or she can press the representative about this and clear up any obscure language regarding your lawsuit settlement advance.

 

#7. Harass Potential Borrower Until He or She Gives In

Similar to Sue in Scenario #1, Tony had applied for a lawsuit settlement advance only to later contact the company, telling them he didn’t end up needing it. Nonetheless, throughout the following weeks, the lawsuit loan funding firm called Tony, harassing him into “paying them back.”

The lawsuit firm went on to say that they would give away Tony’s personal information to third parties. Like with Sue, they, too, threatened Tony with lawsuits and arrest. Out of fear, Tony ended up paying the company.

What Happened?

This has scam written all over it. Blackmailing and harassment are sure signs that the lawsuit loan funding company Tony was dealing with wasn’t ethical; this wasn’t even close to being in the gray.

Unfortunately, the bullying tactics did work; Tony did end up giving the unscrupulous lawsuit loan funding company what they had wanted. Still, it is understandable why Tony would comply, given that the lawsuit loan funding company used his personal information as leverage.

What Can You Do?

Like with Scenario #1, hang up and contact your lawyer. From there, you and your attorney can determine what route is best for you. In most cases, this will probably mean getting the authorities involved.

At the end of the day, the last thing you want to do is give the (shady) lawsuit loan funding company what they want. In this scenario, the lawsuit firm already has Tony’s personal information. What would keep them from blackmailing him again?

 

#8. Receiving a “Final Legal Notice” in Your Email

It is a typical workday. Felicia is going through emails, clearing her inbox. She comes across an email with the heading “Final Legal Notice.” She opens it to find a notice from a lawsuit loan funding company telling her she owes them money.

It looks legitimate; there is a case number and the payment amount listed in the body of the email. She is confused; she did fill out an application for an advance on her lawsuit settlement several months ago but she was not approved. Felicia ignores the email and continues with her day.

A few days later, a second “Final Legal Notice” email is in her inbox. Something isn’t right.

What Happened?

Instead of the lawsuit loan funding company running a loan collection scam via phone like with Scenarios #1 and #7, the firm did so by email. The delivery method is the only difference, not the intentions.

However, given that this is a suspicious email to begin with, a link in the email could indicate a phishing scam.

(In a nutshell, phishing occurs when scammers impersonate reputable companies, trying to get user’s personal information; the link could take users to a fictitious login in which the victim inputs such information.)

What Can You Do?

Do not click on the link if there is one. You don’t know if it is infected and could be inviting a virus to take over your computer. Like the other scenarios that dealt with harassment, if you keep on getting this email, you may want to consider contacting your attorney and/or the authorities. From there, you can then determine your next course of action.

Advances on lawsuit settlements: Final Thoughts

Know that you won’t run into these scenarios with every pre settlement lawsuit loan funding company. Still, it is worth keeping your radar up, keeping check of any yellow or red flags.

If you are in a dire financial predicament and have no other financial options, applying for a lawsuit settlement advance may be for you. If you are considering this, first and foremost consult with your attorney to see what he or she thinks before jumping to any rushed conclusions.

Always, always, always, do your research; make sure the lawsuit loan funding company is up front with everything, and discloses all terms and conditions of the contract.

You also need to completely understand what you are signing when you sign, and that your lawyer is in the loop and has complete knowledge about the transaction. You’re lawyer cannot deny you from getting a pre-settlement loan, but they should be aware of your pre-settlement loan should you get one, and make sure that you are choosing the best pre-settlement loan company for your interests.

Summary

  • One of the potential lawsuit settlement advance collection scams is when (illegitimate) lawsuit loan funding companies call or email you, telling you need to repay back the money you borrowed—when you know you never borrowed any to begin with.
  • Always have your attorney present for all meetings with the lawsuit loan funding company, and have him or her read the contract and give his or her legal advice before you sign (or don’t sign) it.
  • Don’t accidentally skip over important information in the fine print.
  • If the lawsuit loan funding company discourages you from having an attorney present or—better yet—encourages you to use theirs, don’t comply.
  • Remember, their attorney is not your attorney; your attorney will keep your best interest in mind.
  • In general, consult your attorney before applying for a lawsuit settlement advance.
  • Do your research and only work with a lawsuit loan funding company that is up front about everything.
  • If you do sign a contract, make sure the firm discloses everything about the contract and that you fully know what you are about to sign before you sign it.
  • When it comes to settlement advance loans, your attorney should also read and give feedback before you make your decision; he or she should have complete knowledge of the lawsuit loan funding transaction.

 

As Legal-Bay is one of the best pre-settlement funding companies in the industry, we have over twenty years’ worth of knowledge to share with you, and some of the lowest cost pre-settlement funding rates in the business. We’ve been doing this a long time, and we know what our customers need and expect from us.

 

We’d love to speak with you and answer any questions you may have. Please feel free to contact us for more information on how you can obtain legal funding.

 

This article has been updated from an earlier version. The original version posted February 2018 is below. 

 

You are on the fence whether you should apply for a lawsuit loan or not. Nonetheless, you know you have to make a decision soon. With a stack of medical and utility bills piling up, and little to no revenue trickling in, you are on the brink of foreclosure and eviction.

While friends and family would love to contribute, they don’t have the available funds to help out. Even with these types of conditions, you still are not sure whether you should pull the plug and contact pre settlement loan companies. Should you consider settlement loans, or shouldn’t you?

You see, having started in the 90s, the lawsuit loan industry is a relatively new field[1] in which state and federal regulations still have not caught up to. What we have said time and again in our articles—and that is worth being said here—is that no lawsuit loan company is the same. In other words, some are more and less reputable (and ethical) than others.

Even in states that have more standards for lawsuit loan companies, plaintiffs have to be their own regulators, assessing what smells suspicious and what doesn’t when it comes to pre-settlement funding.

To help you with this, here are several shady pre settlement lawsuit funding scenarios that range from slightly shady to outright scam. Plus, what you can do to decrease the chances of falling for one of these.

#1. Repaying Money You Never Borrowed in the First Place On Pre-Settlement Funding Loans

Sue’s trial was pending and, due to the major car accident she was victim to, she couldn’t go back to work. At the time, she thought it couldn’t hurt filling out an application or two for a lawsuit loan.

A month later, to her surprise, a family member was able to lend Sue the money she needed for her medical bills. She contacted the lawsuit loan companies to tell them she wasn’t interested in moving forward in the application process.

To her surprise, months later, she received a call from one of the lawsuit loan companies telling her she needed to pay back the money she had borrowed. Sue was confused: she had never accepted a cash advance, much less had been offered one.

A few weeks later, she received a second call, notifying her that if she didn’t “pay back the loan,” she would be sued and would be at risk of asset seizure and yes, even arrest.[2]

Afraid she would face legal repercussions even though she had never borrowed money from the company nor signed a contract stating she would, she gave them the money.

 

What Happened?

Sue did nothing wrong. No matter where you are in the application process, you can always back out. This scenario is none other than a shining example of a loan collection scam.

The agency, which could have just been a front, got Sue’s contact information from the application she had filled out. And, using intimidation, bullied her into giving them money.

What stood out was that, despite the many threats the “collection agents” were saying, they never provided Sue with any physical proof that she had borrowed money from them—that’s because she didn’t.

 

What Can You Do?

If you find yourself in this situation, hang up the phone and contact your attorney to see what your legal options are. What you don’t want to do is hand over the money for one of two reasons.

One, you don’t owe the lawsuit loan company any money. And two, it could encourages the lawsuit loan company to call you again, insisting that you still owe more.

 

#2. Sneaking Details in the Boilerplate

Ronaldo needed some cash fast, as it wasn’t looking like he’d see his day in court for that class-action suit any time soon. His credit score was low and he had already pulled from his home equity loan and 401(k).

Having been repeatedly denied for a traditional loan, Ronaldo decided to apply for pre settlement lawsuit funding. In a couple of days, Ronaldo received a call back from the loan company telling him the good news: his application was accepted and they would give him the loan. Ronaldo went down to the lawsuit loan company’s office and, having read the contract, signed it.

Luckily for Ronald (and the lawsuit loan company), he was awarded a settlement. It was only after being given the settlement, Ronaldo was instructed that he needed to pay back the loan—and the interest, which had accrued to over 100% annually.

Ronaldo couldn’t believe the high interest rate (which was over the capped interest rate for traditional loans). Unfortunately, the details about the high interest rate was in the fine print.

 

What Happened?

In some states, pre settlement lawsuit funding companies can dodge the usury and fair-lending laws traditional banking institutions have to abide by. For some, this may mean that the lawsuit loan industry isn’t required to cap their interest rates at a certain marker.[3] Yes, some lawsuit loan firms may argue that their reason for charging such a high rate comes down to less guarantee of being paid back.

Unlike traditional banking institutions, lawsuit loan companies normally don’t run a candidate’s credit history report or check for employment—which increases risk.

Also, depending on the lawsuit loan company’s policies, this could be a non-recourse loan in which plaintiffs don’t have to pay the lender back if they lose their case.[4]

Nonetheless, it is suspicious for a lawsuit loan company to hide the interest rate (and any other fees) in the boilerplate.

 

What Can You Do?

Before you sign the contract, talk with your lawyer and make sure he or she reviews and gives you his or her professional legal advice. You need to know what you are getting into and what legal options you have should there be a contract dispute.

If you have already signed the contract without the presence and feedback from your lawyer and are stuck in a situation like Ronaldo’s, you still need to make that call. From there, your attorney can instruct what legal avenues you can take.

Also, as a word of caution: always, always, always ask about the lawsuit loan. The truth is, some settlement loan companies are vague about interest rates and any other fees, and only are up front about them if you ask.

 

#3. Encouraging to Not Have an Attorney Present

Akeno made the decision to go forward and sign the contract for the lawsuit loan. Unlike Ronaldo, Akeno knew about the interest rate (and other fees) he would have to pay should he win a settlement.

However, the pre settlement lawsuit funding company Akeno was dealing with told him he didn’t need to contact or bring his attorney to their meetings. This made Akeno suspicious, especially since having his attorney present could legally benefit the lawsuit loan company as well.

What Happened?

Not encouraging or recommending Akeno to have his lawyer present is a questionable move on the lawsuit loan company’s part.

Worst case scenario, the lawsuit loan company is hiding something in the contract that gives them a better deal, and that is why they are encouraging pre-settlement funding without your attorney’s consent. Best case scenario, they could be inexperienced and not think having a lawyer present is necessary.

What Can You Do?

Take note of companies recommending lawsuit loans without your attorney’s signature. This is a red flag. You may want to talk to your attorney about this to see what he or she thinks.

If you do go forward, be adamant that your attorney is present at all of the meetings and that he or she must review the contract before you consider signing it. (To learn more about such red flags read “Red Flags to Watch Out for When Considering Settlement Loan” Parts 1 and 2.)

 

#4. Encouraging to Consult with THEIR Attorney

Olivia had some legal questions about the pre settlement lawsuit funding. She was on the fence whether she should go ahead and sign the contract. Yes, she needed the lawsuit loan to pay for everyday necessities like food, gas, clothes, utilities, and her mortgage.

Without having any other financial options left, she was considering on taking the loan. Still, one thing made her suspicious. The lawsuit loan company mentioned that their attorney would be happy to sit down and discuss any legal questions she may have not only about the contract but about the lawsuit loan industry.

At first, Olivia considered taking up the loan company’s offer but then decided to go to her own attorney instead; something didn’t seem right.

What Happened?

In this scenario, Olivia chose the safer option to consult with her attorney instead of the company’s. Remember, the attorney who works for the lawsuit loan company represents just that: the lawsuit loan company. Which means it is not a shoe-in that Olivia’s best interest will be taken into consideration.

What Can You Do?

It is because of this, plaintiffs should look to THEIR attorney for legal advice before they accept the lawsuit settlement loans. In doing so, since you are the client, you know you will receive advice that is in your best interest, and no other party.

 

#5. Advertising “Fast and Easy Cash” But Not Mentioning What Comes with It

Aryan saw an advertisement on TV, telling plaintiffs who have pending lawsuits and are awaiting judgement to contact said pre settlement lawsuit funding company to get “fast and easy cash.”

He had seen these advertisements before but had ignored them. Now that he was that plaintiff involved in a personal injury suit, he was all ears. He needed the fast cash.

He had slipped and fallen on the job, and now was out of work and had defaulted on his car and mortgage. With the promise of being given “fast and easy cash,” Aryan made the call.

What Happened?

It is not uncommon to see advertisements on TV, billboards, and benches promoting lawsuit loan companies. Promising plaintiffs “fast and easy cash,” such advertisements can lure plaintiffs to call these companies, apply for the loan, and sign the contract without knowing more about the strings that are attached to the claims.

You have to remember that lawsuit loan companies are businesses. They have to make money from these loans, which means plaintiffs most likely will be paying back the principal and interest (whether compounded or simple) and any other included fees.

What you probably don’t see on these ads is how much in interest you will be paying and if there is an application fee. According to Fox Business, some lawsuit firms can charge as much as 2% to 4% in compounded interest on top of any extra fees.[5]

What Can You Do?

That is not to say that every pre settlement lawsuit funding company who runs an ad is shady. It just goes to show that plaintiffs can’t get lured into what is being advertised without knowing what strings come with it.

In short, don’t be afraid to ask questions about the company’s interest rates (or “finding fees”), and make sure you get their answers in writing.

 

#6. Just Abiding by Industry Standards

Sonya needed to get a cash advance fast. Even though she was able to go back to work after the car accident, she wasn’t bringing in enough to pay for her bills.

Besides, she thought the offer the insurance company had given her was too low. She needed more time at the negotiating table. However, she had no more financial options available other than taking out a lawsuit loan.

After a few weeks of applications, Sonya received a call from one of the lawsuit firms telling her she had been approved. She was elated. Still, something didn’t sit right with her when one of the employees at the company assured her that they abided by industry standards.

What Happened?

Sonya has every right to be unsure about what the representative said. The truth is, you don’t know what “abide by industry standards” means.

In states, such as Main, Ohio, and Nebraska, lawsuit funding regulations are very lenient, not having as many limitation as regular loans do.[6]

It is also noteworthy to keep in mind that industry standards for the lawsuit loan field and the banking and traditional loan industry are not one and the same.

What Can You Do?

The last thing you want to do is assume you know what the representative is saying when he or she mentions “industry standards.” Ask the hard question— “what are industry standards?” —and have him or her put he or she is referencing in writing.

It also goes without saying, you need to have your attorney present so he or she can press the representative about this and clear up any obscure language.

 

#7. Harass Potential Borrower Until He or She Gives In

Similar to Sue in Scenario #1, Tony had applied for a lawsuit loan only to later contact the company, telling them he didn’t end up needing it. Nonetheless, throughout the following weeks, the lawsuit firm called Tony, harassing him into “paying them back.”

The lawsuit firm went on to say that they would give away Tony’s personal information to third parties. Like with Sue, they too threatened Tony with lawsuits and arrest. Out of fear, Tony ended up paying the company.

What Happened?

This has scam written all over it. Blackmailing and harassment are sure signs that the lawsuit company Tony was dealing with wasn’t ethical; this wasn’t even close to being in the grey.

Unfortunately, the bullying tactics did work; Tony did end up giving the “lawsuit company” what they had wanted. Still, it is understandable why Tony would comply, given that the lawsuit company used his personal information as leverage.

What Can You Do?

Like with Scenario #1, hang up and contact your lawyer. From there, you and your attorney can determine what route is best for you. In most cases, this will probably mean getting the authorities involved.

At the end of the day, the last thing you want to do is give the (shady) lawsuit loan company what they want. In this scenario, the lawsuit firm already has Tony’s personal information. What would keep them from blackmailing him again?

 

#8. Receiving a “Final Legal Notice” in Your Email

It is a typical workday. Felicia is going through emails, clearing her inbox. She comes across an email with the heading “Final Legal Notice.” She opens it to find a notice from a settlement loan company telling her she owes them money.

It looks legitimate; there is a case number and the payment amount listed in the body of the email. She is confused; she did fill out a lawsuit loan application several months ago but she was not approved. Felicia ignores the email and continues with her day.

A few days later, a second “Final Legal Notice” email is in her inbox. Something isn’t right.

What Happened?

Instead of the lawsuit loan company running a loan collection scam via phone, like with Scenarios #1 and #7, the firm did so by email. The delivery method is the only difference, not the intentions.

However, given that this is a suspicious email to begin with, a link in the email could indicate a phishing scam.

(In a nutshell, phishing occurs when scammers impersonate reputable companies, trying to get user’s personal information; the link could take users to a fictitious login in which the victim inputs such information.)

What Can You Do?

Do not click on the link, if there is one; you don’t know if it is infected. Like the other scenarios that dealt with harassment, if you keep on getting this email, you may want to consider contacting your attorney and/or the authorities. From there, you can then determine your next course of action.

Pre Settlement Lawsuit Funding: Final Thoughts

Know that you won’t run into these scenarios with every pre settlement lawsuit funding company. Still, it is worth keeping your radar up, keeping check of any yellow or red flags.

If you are in a dire financial predicament and have no other financial options, applying for a lawsuit loan may be for you. If you are considering this, first and foremost consult with your attorney to see what he or she thinks before jumping to any rushed conclusions.

Always, always, always, do your research; make sure the lawsuit loan company is up front with everything, and discloses all terms and conditions of the contract. The best pre-settlement funding companies always will be.[7]

You also need to completely understand what you are signing when you sign, and that your lawyer is in the loop and completely knows about the transaction.[8]

What has your experience been like with a pre settlement lawsuit funding company? What were the pros and cons? Share your thoughts by commenting in the comments section below.

Summary

  • One of the potential loan collection scams borrowers can come across is when (suspicious) lawsuit loan companies call or email you, telling you need to repay back the money you borrowed—only that you know you never borrowed any to begin with
  • Always have your attorney present for all meeting with the lawsuit loan company, and have him or her read the contract and give his or her legal advice before you sign (or don’t sign) it
  • That way, you don’t accidently skip over important information in the boilerplate
  • If the lawsuit loan company encourages you to not have an attorney present or—better yet—encourages you to use theirs, don’t comply
  • Remember, their attorney is not your attorney; your attorney has your best interest
  • In general, consult your attorney before applying for a lawsuit loan
  • Do your research and only work with a lawsuit loan company that is up front about everything
  • If you do sign a contract, make the firm discloses everything about the contract and that you fully know what you are about to sign before you sign it
  • Your attorney should also have read and given feedback before you have made your decision; he or she should know completely about the same day settlement loan transaction.

To learn more about pre settlement lawsuit funding, consider checking out our blog.

[1] Fox Business: Cash-now Promise of Lawsuit Loans Under Fire

[2] Washington State Department of Financial Institutions: Cash Advance Group – Possible Loan Collection Scam

[3] Fox Business: Cash-now Promise of Lawsuit Loans Under Fire

[4] Fox Business: Cash-now Promise of Lawsuit Loans Under Fire

[5] Fox Business: Cash-now Promise of Lawsuit Loans Under Fire

[6] Fox Business: Cash-now Promise of Lawsuit Loans Under Fire

[7] Fox Business: Cash-now Promise of Lawsuit Loans Under Fire

[8] Fox Business: Cash-now Promise of Lawsuit Loans Under Fire

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