Oasis Legal finance and LawCash made loans when the two companies advanced 2,400 Coloradans sums of money ranging from $500 to $5,000 in anticipation of legal settlements or judgments from lawsuit, according to a Denver District Judge.
That ruling makes both companies subject to Colorado’s consumer protection laws, said Attorney General John Suthers. The state is continuing to investigate to see if the company’s have any liability under state law.
Lawsuit-advance companies typically expect their customers to pay a multiple of the fronted funds, depending on the length of time between the loan being made and the payment of settlement funds.
In the case of Oasis Legal Finance, consumers paid interest rates ranging from 60 percent to 125 percent; in the case of LawCash, the rates ranged from 65 percent to 215 percent.
Colorado law requires licensure when a business is making loans with a rate greater than 12 percent. Neither Oasis Legal Finance nor LawCash are licensed with the state as required by Colorado’s Uniform Consumer Credit Code.