Attorney General Eric T. Schneiderman and the Consumer Financial Protection Bureau (CFPB) announced last month a lawsuit against RD Legal Funding, LLC, two related entities, and Roni Dersovitz, the companies’ founder and owner, for allegedly scamming National Football League (NFL) concussion victims.
The Attorney General’s office and the CFPB alleged that the illegal scheme deceived football players with brain injuries out of millions of dollars by luring them into costly advances on compensation fund and settlement payouts by lying about the terms of the deals. In the suit filed in federal court, the lawsuit seeks to “put an end to the company’s illegal practices, obtain relief for the victims, and impose penalties.
“The alleged actions by RD Legal—scamming … former NFL players struggling with severe injuries—are simply shameful. RD Legal used deceptive tactics to charge unlawfully high interest rates for advances on settlement and compensation funds, allowing them to profit off the backs of these unsuspecting individuals,” said Attorney General Schneiderman. “My office will do all it can to end the fraudulent practices employed by RD Legal, recoup the illegal amounts charged by this company — and make these victims whole again.”
CFPB Director Richard Cordray added that “it is unconscionable that RD Legal scammed … NFL concussion victims out of millions of dollars. We allege that this company and its owner lined their pockets with funds intended to cover medical care and other critical expenses for people who are sick and sidelined. Our lawsuit seeks to end this illegal scheme and get money back to those entitled to receive it.”
RD Legal, based in Cresskill, N.J., is a company that offers advances to consumers entitled to payouts from victim compensation funds or lawsuit settlements. It allegedly targeted former NFL players who have been diagnosed with neurodegenerative diseases such as Alzheimer’s and Parkinson’s disease and were entitled to payments from the settlement in a class action lawsuit.
The CFPB and the New York Attorney General alleged that RD Legal contacted these consumers after they were awarded their money, but before they received most of it. RD Legal then swooped in with a “deal,” offering the victims an upfront payment of some of the money they had not yet received, which would be paid back when they received the balance of the payout. “Through confusing contracts, RD Legal misrepresented to consumers their obligation to repay these expensive transactions, often collecting from the consumer more than twice what RD Legal had advanced only months earlier,” according to the AG’s office. “The lawsuit alleges that RD Legal’s illegal actions cost victims, many of whom suffered long‐term physical or cognitive harm, millions of dollars.”
The CFPB and the New York Attorney General alleged that the defendants violated several laws, including the Dodd‐Frank Wall Street Reform and Consumer Protection Act’s prohibition on deceptive and abusive acts and practices.