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November 17, 2015

Colorado Supreme Court Ruling Will Curb Lawsuit Lending Abuses

The Colorado State Supreme Court issued a unanimous decision in Oasis v. Coffman holding that lawsuit lending is subject to the state’s existing interest rate caps.

“It’s a loss for lawsuit lenders and supporters who say the industry helps equalize the bargaining power between injured consumers and insurance companies, who can use delays and other tactics to pressure plaintiffs into settling for less,” writes Forbes‘ Daniel Fisher. “But it’s a victory for the U.S. Chamber, which opposes lawsuit lending because it believes the loans both stimulate more litigation and inspire consumers to hold out for more money in order to repay loans that frequently have interest rates above 40% a year.”

The ruling “establishes important legal precedent that lawsuit lenders must play by the same rules as other lenders in the state, and will protect consumers from having to pay sky-high interest rates,” said ILR President Lisa A. Rickard in a statement released yesterday.

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