The largely unregulated companies have operated with less public scrutiny than the rest of the litigation finance industry, which provides money to law firms to fund commercial lawsuits.
Historically, settlement-advance businesses have targeted personal injury and medical malpractice plaintiffs, many of them referred by their lawyers. But in recent months, lawyers say, more pitches are directed at women with sexual harassment claims.
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, but most people doesn’t like to work with this companies as they don’t see it as honest and prefer to get loans from a bad credit money center, in case they don’t have the best credit record, and use this money for the lawsuit.