In the Matter of Plaintiff Support Services, Inc.Pre-Settlement Finance, LLCQuickCash, Inc.Magnolia Funding, LLCBridgeFunds LimitedPlaintiff Funding Corporation d/b/a LawCashOasis Legal Finance Co., LLCThe Whitehaven Group, LLCNew Amsterdam Capital Partners LLC d/b/a Law Max
a. With respect to disclosure regarding the financial aspects of the transaction (i) not all contracts provide the annualized percentage rate of return; (ii) consumers may not fully appreciate the considerable degree to which their total cost may vary depending on the length of time that passes before any repayment is made; and (iii) none of the contracts state the actual dollar amount fob be repaid by the consumer if repayment is made at specified intervals, brooked out by six month intervals, carried forward to 36 months, and including all fees as well as any minimum required payment amount.
b. Certain contracts are multi-page documents and include legal terminology that may be difficult for consumers to understand
c. Not all of the Companies currently provide, for those consumers who do not speak, read or write English, adequate written translations in the consumer’s native language.
d. The Companies’ contracts do not routinely provide the consumer with an opportunity to cancel the transaction without penalty within a reasonable time after execution of the contract.
e. Not all of the Companies’ contracts require that the consumer’s attorney confirm in writing that he or she in fact has explained these terms to the consumer.
IT NOW APPEARS that the Companies are willing to enter into this Agreement and settle and resolve the Attorney General’s Concerns, without admitting that the Companies have violated any law or otherwise committed any wrongful or improper act, and the Attorney General is willing to accept this agreement to resolve his concerns.
IT IS HEREBY AGREED by each of the Companies, and their employees, agents, subsidiaries, successors and assigns, with respect to all transactions wit New York consumers who enter into cash advance transactions with any of the Companies on or after 90 days of the date of this agreement:
1. All contracts shall be in compliance with General Obligations Law §5-702 (Plain Language law).
2. All contracts shall be completely filled in and contain the following disclosures (“Disclosure Statement”), on the front page in at least 12-point bold type, appropriately headed (sample “Disclosure Statement”) is attached hereto as Attachment A):
a. the total amount to be advanced to the consumer;
b. itemization of one-time fees, broken out item by item (e.g. application, processing, attorney review, broker, etc.);
c. percentage fee or rate of return, stated on an annualized basis, including frequency of compounding;
d. total amount to be repaid by the consumer, broken out by six month intervals, carried forward to 36 months, and including all fees as well as any minimum required payment amount.
3. All contracts shall provide that the consumer may cancel the contract within five business days following the consumer’s receipt of funds, without penalty or further obligation. The contract shall contain the following notice written in a clear and conspicuous manner: “NEW YORK CONSUMER’S RIGHT TO CANCELLATION: YOU MAY CANCEL THIS CONTRACT WITHOUT PENALTY OR FURTHER OBLIGATION WITHIN FIVE BUSINESS DAYS FROM THE DATE YOU RECEIVE FUNDING FROM [insert name of company (“COMPANY”)].” The contract shall also specify that in order for the cancellation to be effective, the consumer must either: (i) return the full amount of disbursed funds to the COMPANY by delivering the COMPANY’S un cashed check to the COMPANY’S offices in person, within 5 business days of the disbursement of funds, or (ii) mail a notice of cancellation and include in that mailing a return of the full amount of disbursed funds (in the form of the COMPANY’S check, or a registered or certified check or money order), by insured, registered or certified United States mail, postmarked within five business days of receiving funds from the COMPANY, at the address specified for such cancellation in the contract.
4. The consumer shall initial each page of the contract.
5. All contracts shall contain a legend, immediately above the consumer’s signature, in at least 12-point boldface type, to read:
6. DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT COMPLETELY OR IF IT CONTAINS ANY BLACK SPACE. BEFORE YOU SIGN THIS CONTRACT YOU SHOULD OBTAIN THE ADVICE OF YOUR ATTORNEY. YOU ARE ENTITLED TO A COMPLETELY FILLED IN COPY OF THIS CONTRACT
7. All contracts shall contain a written certification by the consumer’s attorney of record that (s)he has reviewed the contract and explained to the to the consumer its terms, including the annualized rate of return applied to calculate the amount to be paid by the consumer.
8. For English and Spanish speaking consumers, contracts shall be written in the same language in which the oral negotiations are conducted between the COMPANY and the consumer. For consumers whose primary language is neither English nor Spanish: (i) the “principal terms” of the contract shall be translated in writing into the consumer’s native language; (ii) the consumer shall sign the translated document containing the “principal terms” and initial each page; and (iii) the translator shall sign a notarized affirmation confirming that the “principal terms” have been presented to the consumer in his native language and acknowledged by the consumer, in writing. For purposes of this agreement, “principal terms” shall include all of the items required to be disclosed by paragraph 2 above (see Attachment A below) as well as the legend in paragraph 5 above.
9. To the extent the contract provides for attorneys fees and costs (in addition to the amount due and owing under the contract) in cases of breach of the contract by either party, the contract shall provide that attorneys fees and costs may be recoverable by the prevailing party and must be reasonable. Any contractual cap on such attorneys fees and costs shall apply to both parties.
10. No contract may require mandatory arbitration to resolve disputes under the contract.
IT IS FURTHER AGREED that nothing contained herein shall be construed so as t deprive any individual of any private right of action under the law.
IT IS FURTHER AGREED that nothing contained herein shall be construed as relieving the Companies of their obligations to comply with all state and federal statutes, regulations or rules, to the extent such statutes, regulations or rules are applicable to and govern any particular contract, nor shall any of the provisions of this agreement be deemed permission to engage in any act or practice prohibited by such statute, regulation or rule, to the extent such statue, regulation or rule is applicable to and governs any particular contract.
IT IS FURTHER AGREED that the Companies shall not represent or imply that any business acts or practices hereafter used or engaged in by the Companies have been approved, in whole or in part, by the Attorney General of the State of New York.
IT IS FURTHER AGREED by the Companies that each of the Companies will file a report, individually or through ALFA, with the Attorney General indicating the manner and extent of its compliance with this agreement within 120 days of the date of this agreement.
IT IS FURTHER AGREED by the Companies that in the event the Attorney General enter into an agreement with another company engaged in the same or similar practices that are the subject of this agreement and the terms of such agreement are inconsistent with any provisions of this agreement, the Companies may request the Attorney General’s office in writing to modify any affected provisions of this agreement to bring them into conformity with such other agreement.
IT IS FURTHER AGREED that each of the Companies will pay to the Attorney General the sum of $5,000 as costs.
WHEREFORE, the following signatures are affixed hereto this 17th day of February, 2005:
State of New York
Bureau of Consumer Frauds & Protection By:
Thomas ConwayAssistant Attorney General in Charge
Stephen MindellSpecial Assistant Attorney General
Herbert IsraleAssistant Attorney General
PLAINTIFF SUPPORT SERVICES, INC.
Joseph DiNardo, President
PRE-SETTLEMENT FINANCE, LLC
Carmine DeSantis, President
MANGOLIA FUNDING, LLC
Jason Bass, President
Mark Berlin, President
PLAINTIFF FUNDING CORPORATIONd/b/a LAWCASH
Harvey Hirschfield, Executive Vice President
OASIS LEGAL FINANCE CO., LLC
Gary Chodes, CEO
THE WHITEHAVEN GROUP LLC
AMERICAN LEGAL FINANCE ASSOCIATION
Kramer, Levin, Naftalis & Frankel LLP
Eric A. Tirschwell,
attorney review $__________
other (__________) $__________
Total fees: $__________
if at 6 months $__________
if at 12 months $__________
if at 18 months $__________
if at 24months $__________
if at 30 months $__________
if at 36 months $__________
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