What are the red flags of a predatory funder?
The clearest warning signs are a refusal to put total payoff figures in writing before you sign, a rate that compounds, no cap on total repayment, a fee schedule that is not itemized, pressure to decide immediately, and an offer to fund without your attorney's involvement.
Compounding is the single most damaging term. A monthly compounding rate that sounds small produces a balance that can exceed the case value on a file that runs two or three years.
Unitemized fees are the quietest one. If a company describes its pricing as a rate and will not give you the fee list as a list, assume there are fees — closing fees, per-advance filing fees and recurring servicing charges are all common here, and they are frequently disclosed in the contract rather than on the website. Ask the question directly: what is every fee, when is each charged, and does anything get charged again if my case runs long?
"Starting at" pricing is the second. If the advertised rate is a floor rather than a rate, the number you were shown is probably not the number you will get, and you find that out at signing.
Anyone offering to fund you without your attorney knowing about it is either not a real funder or is structuring something that will cause you a problem later.
Ask for the contract before you commit to anything, and read the payoff table. If there is not one, that is the answer.
People who asked this also asked
Still not sure? Ask us directly.
Call 813-798-5528 and talk to a person, or apply in two minutes. There is no cost to apply, no credit check, and no cost if we say no.