Companies Are Cold-Calling Abuse Survivors to Steal Their Settlement Checks

L.A. County’s $4 billion abuse settlement has drawn sharks looking to cash in on survivors’ suffering. Through cold calling and social media messaging, private companies are pitching a deal to abuse victims: give us your right to a future payout, and we'll give you a discounted lump sum today.

In recent months, more than 180 victims have moved to sell their payouts to around a dozen companies, according to the Los Angeles Times reports.

This is what happens when litigation finance operates in the shadows. PACT has been following this issue closely across the country.

These solicitations alone should trouble every policymaker. One victim, who asked to remain anonymous, received a call from a Florida company that appeared to know details of his case, even though nearly all the lawsuits are filed under pseudonyms. "I'm really curious, like, how you got my number?" he asked, according to a recording reviewed by the Times. He never got an answer. Instead, the salesperson offered him a $200 referral fee if he could find others willing to sell.

The terms have been disputed, and the financial consequences can be severe. Most victims will receive about 80% of what they sell, according to court filings, but some fare far worse. One Gardena man alleges he signed a contract to sell $90,400 of his payout for $25,000. One settlement funding company says their deals are "priced as tightly as possible to provide the maximum benefit to the sellers," with discount rates of 9% to 11%. Boris Treyzon of ACTS Law, which represents about 1,700 plaintiffs, disagrees: "The interest rates are insane." Plaintiffs’ lawyers also say the contracts leave key questions unanswered, including who pays attorney fees, “which typically gobble up about 40% of the payouts in these cases.”

Survivors should not have to navigate opaque, high-pressure financial arrangements without it being made what they stand to lose.