Monday, January 17, 2011

Loans for Lawsuits: High Price, Little Regulation

The New York Times and the Center for Public Integrity (a nonprofit for investigative journalism in DC) took a look at the industry that lends money to plaintiffs until their settlements or awards come in. The interest rates are very high -- a $10,000 loan can become a $30,000 debt very quickly -- but the industry says they are justified because of the risk that the plaintiffs lose their cases. Others say the practice is abusive. See Benjamin Appelbaum, Lawsuit Loans Add New Risk for the Injured, Jan. 16, 2011.

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