Thinking About A Settlement Advance



by Barbara Nevins Taylor


A settlement advance for an accident or lawsuit may sound like a good idea. But you might want to think twice. Deals to get money upfront may seem attractive, but high fees can take a big chunk out of your payout and leave you with far less money than you deserve.

The latest cautionary tale about a settlement advance involves 9/11 first responders and former NFL football players. A lawsuit claims they were scammed while they waited to get settlement money for serious illnesses. The Consumer Financial Protection Bureau (CFPB) and the New York State Attorney General say RD Legal Funding, and owner Roni Derscovitz, preyed on these people and “. . . swooped in with a “deal,” offering the victims an upfront payment” for some of the money they had not yet received.”

CFPB Director Richard Cordray said, “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.” 

Many of the first responders, police officers, firefighters, emergency medical technicians and others suffer from cancer, memory loss, post traumatic stress disorder and other debilitating illnesses. The former NFL players struggle with Parkinson’s disease and Alzheimers. They all need the money they were awarded and expected to receive under the settlement advance concept.

But the New Jersey-based RD Funding’s confusing contracts allegedly masked the amounts of money they would have to repay on the advances. The victims often had to pay back twice what the company advanced within a matter of months, according to the lawsuit.  It claims the scheme cost people with long-term serious illnesses millions of dollars.

They offer the example of a 9/11 first responder awarded $65,000 from the Zadroga Fund. That’s the pool of money Congress allocated for first responders injured during the aftermath of the World Trade Center attack. RD advanced her $18,000 while she waited for payment from the fund. But six months later, she had to repay $33,000 to RD Legal. That means she paid $15,000 to RD beyond the money the company advanced to her. 

The CFPB and the Attorney General allege RD Funding:

  • Lied about the terms of deals.
  • Lied about speeding up victims’ claims for faster payouts.
  • Deceived victims about when they would get the money.
  • Illegally collected money from victims. 

The CFPB and the New York Attorney General aim to get money back for victims. New York A.G. Eric Schneiderman called the practices “shameful.” He said, “My office will do everything it can to end the fraudulent practices employed by RD Legal, and recoup the illegal amounts charged by this company.”

The lawsuit asks the court to shut down RD Funding and return money to the victims.

We’ll stay on top of this to find out how it plays out.


In the meantime, you should know that the lawsuit was brought under Dodd-Frank laws and regulations put into effect to curb the worst Wall Street practices including predatory lending.

Republicans in Congress and President Trump want to dismantle Dodd-Frank and the Consumer Financial Protection Bureau.  If you want to maintain consumer protections, call your representative and senators in Washington. 

Here’s where to find your representative:

Here’s where to find your senators:








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Barbara Nevins Taylor

As the winner of 22 Emmy Awards and a slew of journalism honors and awards, I created to give you the straight story about complicated stuff. Tell us what you want to know and we'll get you the answers.