All right. Here's what the problem is. At least 2 times a day, my fellow baby lawyers and I get calls from clients who are involved in various settlements who are trying to get settlement advances or loans. We tell them no, and then they go to the loan company anyway and ask them to send us some application paperwork.
This pisses me off.
First - We tell them no. There are good reasons why we tell clients we don't work with settlement advance companies. First and foremost, most of our settlements are written with non-disclosure clauses - in other words, the client can't discuss the settlement with third parties, lest they lose their settlement altogether, which renders the attempt to get a settlement advance rather moot. Second, these loan companies are skirting the usury line. They get these clients loans on their settlement, then charge them up to 25% interest on the maturity. That in itself isn't great, but then there are penalties for not paying the loan back on time. Clients are trying to get these loans because they don't have money - they're certainly not going to have MORE money later.
But that doesn't matter to the loan shark - I mean, agent. They refer clients to other clients who got loans, and they argue with us and them, and they try to play it off that we're the bad guys in this situation. Now, as an attorney, I owe several responsibilities to my client. One of those is fiduciary in nature - I'm supposed to help the client get the best possible settlement AND protect that settlement. I can't do that if I'm helping that client enter into a loan that could cost him up to or even more than twice the settlement he's entitled to.
Settlement advances are like payday advances - they're things that should never be used. And those who take advantage of these people are despicable in my mind. They are taking advantage of people in a period when these people need to be looked out for.
1 comment:
Well, I sort of agree and I sort of don't. I used to be a mortgage loan officer & hearing about all the mortgage sub-prime loan mess, I know exactly how these things have worked. I could THOROUGHLY explain these loans to people all day long and all they cared about was "get me in the house." Then, just a few days ago I see a news story about how someone else was "being taken advantage of" by payday loan companies that charged an APR of 421%. Agreed, that is borderline criminal but these people need to take responsibility for their actions also. Read the damn fine print people! Hello, the print is not even fine print, it's right there in big numbers on the form!! I'm sick of people who just want what they want when they want it and get it and then want to scream "Help, I've been taken advantage of!" Give me a break...
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