Colorado Lawsuit Settlement Lenders To Pay $2M

ACROSS COLORADO -- A years-long suit as to whether legal settlement advance companies could be considered "lenders" under Colorado law was settled Monday. Attorney General Cynthia H. Coffman announced her office settled a lawsuit against two companies that lent money to plaintiffs with pending personal injury claims.

The two companies, Oasis Legal Finance, LLC and Plaintiff Funding Holding, Inc. d/b/a LawCash, advanced money to plaintiffs (typically in amounts less than $1,500) with pending claims such as automobile accidents, slip and falls, construction site injuries, and medical malpractice incidents, according to a Colorado Supreme Court decision. Oasis Legal Finance and LawCash had been in business in Colorado since 2001 and 2004 respectively.

Consumers who settled their litigation were obligated to pay back an increased amount in the event that they recovered money in their lawsuits, a statement from Coffman's office said.

The Colorado Supreme Court ruled in 2015 that these transactions are “loans” subject to Colorado's Uniform Consumer Credit Code. The amounts consumers paid back were considered "predatory" under Colorado state lending law.

The settlement will bring over $2M in funds back to Colorado consumers, Coffman's office said in a statement. The AG's office will send out restitution checks to Colorado borrowers who were charged excessive interest on loans they received from the two companies.

“Consumer loans come in many forms. My office works to stop unscrupulous lenders who try and evade Colorado’s consumer protections by disguising their loans as other transactions,” said Coffman in a press release. “This settlement helps ensure that Colorado’s consumer lending laws will continue to provide protection to those in need.”

"The settlement is in the form of a consent judgment entered by the Denver District Court and requires the lenders to collectively pay a total of $2,328,511 in redress. It also contains injunctive relief against future violations of the law."

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