Last week we discussed the growing phenomenon of lawsuit lenders and their potentially harmful effects on unaware personal injury plaintiffs who find themselves owing lenders a significant part of their eventual settlement check. Because lenders designate themselves as investors or financers, they remain out of the realm of state or federal regulation of lenders, which is how they are able to charge exorbitantly high interest rates (up to 100 percent) and withhold information from plaintiffs.
When Larry Long suffered a stroke due to his consumption of prescription pain medication Vioxx, it resulted in significant harm, both physical and financial. He became dangerously close to foreclosure while waiting for a settlement from a class-action lawsuit, and had to explore his diminishing options until he could receive the money he knew was coming. He decided to take out a loan from lawsuit lender Oasis Legal Finance in the amount of $9,150 to tide him over until his settlement came through. When he finally received his settlement of $27,000 a mere 18 months later, Long found himself owing Oasis over $23,000.