The Consumer Financial Protection Bureau (CFPB) and New York Attorney General Eric Schneiderman have sued RD Legal Funding, LLC and related entities (“RD Legal”) in the U.S. District Court for the Southern District of New York for violations of federal and New York consumer protection laws. RD Legal engages in settlement funding, where it advances funds to consumers that anticipate receiving funds from legal settlements in exchange for an assignment of a right to receive a portion of the settlement payout.
The complaint alleges that RD Legal’s advances, although structured as a purchase and assignment, were in fact loans and, therefore, in violation of state lending and usury laws. As a result, according to the complaint, RD Legal unlawfully collected on contracts that are void or unenforceable under state law.
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Thanks to Ric Thom www.securityescrow.com for alerting us to this.