Over at the New York Times, there’s a depressing look at how the cash settlement-advance industry is capitalizing on victims of sexual harassment by providing cash advances to women awaiting payouts from sexual harassment claims.
The cash settlement-advance industry has usually been closely associated with medical malpractice lawsuits and personal injury lawyers—the kind of lawyers you’d see advertised on bus stop seats and billboards. Recently, though, these settlement-advance companies have trained their focus on victims of sexual assault and harassment, the Times reports, treating this newly-public issue with a callousness it doesn’t deserve.
For example, days after news broke of the Hollywood mogul Harvey Weinstein’s history of sexual harassment, LawCash, a settlement-advance company, was trying to cash in. “Sexual abuse is a crime #HarveyWeinstein,” read a LawCash tweet. The Brooklyn company offered cash upfront to sexual abuse plaintiffs “if you or someone you know is in need of financial help.”
The settlement-advance firms get paid back only if a plaintiff collects money from a lawsuit. They make money by charging interest rates as high as 100 percent, which they are able to do because technically the money is considered an advance—not a loan—and therefore is not subject to state usury laws.
The tactics used by settlement-advance firms are simple and, according to some consumer watchdog groups, predatory in nature. Often times people who are filing sexual harassment lawsuits don’t have the option to say no. They’re not famous and don’t have the capital that comes with it; they need the money to live.
Oasis, which spends millions of dollars each year on TV advertising, said it had provided funds to 200,000 customers since it opened in 2003.
Michael Gibson, a former case manager at Oasis, said he had worked on up to 70 cases a day. The typical customer, he said, borrowed less than $2,000 but paid a fee that was the equivalent of an 80 percent annual interest rate.
“My personal opinion is that legal financings are predatory loans,” Mr. Gibson said.
What’s most distressing about this new development is how settlement-advance companies and the shadier side of the legal industry have already written off sexual harassment lawsuits as yet another “litgation trend.” In their eyes, victims of sexual assault or harassment are now joining the ranks of “victims of surgical vaginal mesh products; those suffering from ailments related to the Sept. 11, 2001, terror attacks; and former National Football League players with brain injuries.” It’s fair to say that any of the aforementioned victims don’t deserve to be preyed upon by predatory lenders looking to capitalize on their pain, but targeting the #MeToo movement feels like a scuzzy new low. For some women the Times spoke to, it was a necessary evil—the only way they could keep their homes and survive while waiting for some small form of justice.
Read the story at the New York Times here.