New York City, NY

Consumer Bureau Takes Action to Protect 9/11 Victims

Advocate Andy

CFPB moves to protect victims of lawsuit funding scam

The Consumer Financial Protection Bureau (CFPB) joined with the New York Attorney General's office to take action against a lawsuit funding company that defrauded victims of 9/11.

The action was taken against RD Legal Funding for its use of deceptive practices in offering loans of up to $600,000 in anticipation of lawsuit settlement funds.

The harmed consumers are entitled to payments from the James Zadroga 9/11 Victims Compensation Fund. The fund provides compensation for any individual (or a personal representative of a deceased individual) who suffered physical harm or was killed as a result of the September 11, 2001, terrorist attacks or related construction, clean-up, and debris removal efforts. Compensation is also available for people who lived, worked, or went to school in the exposure zone. If entered by the court, the proposed settlement will provide more than $600,000 in debt relief for consumers, bar the defendants from doing business with any potential recipients of governmentally created 9/11 victim-compensation funds and impose a $1 civil money penalty.

The CFPB and NY Attorney General outlined the following claims against RD Legal:

  • Misrepresented the terms of the transaction: Defendants misrepresented to consumers that RD Legal’s contracts created valid and enforceable assignments of their payment proceeds when, in fact, the assignments were not valid and enforceable. In doing so, they deceived consumers, interfering with their understanding of the terms, costs, and conditions of the transactions, and preventing them from meaningfully evaluating the cost of RD Legal’s transactions or comparing them to other alternatives.
  • Lied about RD Legal’s services: Defendants misrepresented to consumers that RD Legal could “cut through red tape” to obtain their anticipated payments from claims administrators faster than would otherwise be possible. In fact, RD Legal had no authority or ability to affect the administration of payments by claims administrators.
  • Deceived consumers as to when they would be paid: Defendants mispresented to consumers when they would receive funds from RD Legal. In many instances, RD Legal told consumers they would receive promised funds from RD Legal shortly after entering into a contract but failed to deliver the funds when promised.
  • Collected money not owed: RD Legal collected on contracts that were void, or where no payment was due, because the assignment in RD Legal’s contract was in fact not valid and enforceable, or because RD Legal’s product was in fact a loan with an interest rate that violated state usury law.

The enforcement action against RD Legal requires the company to:

  • Provide debt relief to consumers: Defendants must provide over $600,000 in debt relief to harmed consumers.
  • Stop doing business with recipients of 9/11 victim compensation funds: Defendants are permanently barred from doing business with the Zadroga Fund recipients or any other potential recipients of governmentally created 9/11 victim compensation funds.
  • Pay a $1 penalty: Defendants must pay a penalty to the CFPB, which will be deposited into the CFPB’s victims relief fund. Imposition of the $1 civil money penalty allows consumers in the case to potentially obtain compensation from the victims relief fund. The CFPB will work promptly to provide full redress to eligible harmed consumers from this fund, assuming continued availability of money in the fund.

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Andy Spears is a middle Tennessee writer and policy advocate. He reports on news around public policy issues - education, health care, consumer protection, and more.

Nashville, TN

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