How the Finance Industry Is Trying to Cash In on #MeToo

In the wake of the many sexual misconduct allegations that have recently surfaced, many settlement advance companies have been looking to cash in. Settlement advance companies are similar to payday loan providers and have been met with similar allegations of predatory lending. These companies are always trying to ride the wave of the news cycle to acquire as many customers as they can to take out loans. They have provided funding for ex-NFL players to pursue settlements for the brain damage they suffered during their playing careers and provide continual services for workman's comp claims and other on the job settlements. 

These firms have always faced criticism for their practices but their aggressive marketing into sexual misconduct cases has brought this conflict back into the spotlight for the time being. Since these companies are technically not giving loans, but rather "advances", they are allowed to charge exorbitantly high interest rates. These rate vary from case to case but can reach as high as 100%. While this may seem unreasonable, they only collect payments for cases that are won. Consumer advocacy groups argue that these rates are unfair and many customers do not truly understand the terms of the advance when they take it but the companies argue that they provide funding to these plaintiffs that would otherwise have to hire much less experienced attorneys that may not be able to get ideal settlement results.

The CEOs of these companies have different views of what is morally acceptable in situations like these. For example, Legal Bay's CEO Christopher R. Janish says that his marketing campaign  "... really is more of a public awareness and branding thing" but others like T. Thomas Colwell of Trimark Legal Funding believe that companies that ride these new cycle waves are just being "opportunistic". I personally believe that when taking out a loan of any kind a borrower should fully understand the terms before they enter into an agreement and that those in need of legal funding will probably come out ahead by utilizing the funds. I believe that we need to pursue as many of these cases of misconduct as we can and if finances are getting in the way of women coming forward, I support these organizations because of the opportunities that they give to the people who may not have them otherwise.


Link to NYT Article