The Consumer Financial Protection Bureau and the state of New York have accused a New Jersey company of defrauding customers — including Sept. 11 first responders and former NFL players suffering from long-term brain injuries — into signing away millions of dollars in settlement payouts.

A lawsuit [PDF] filed this morning by the CFPB and New York Attorney General Eric Schneiderman alleges that RD Legal Funding and its owner, Roni Dersovitz, targeted recipients of funds set up to pay out settlements from NFL concussion class-action lawsuits, or victim-compensation programs like the Zadroga Fund, which was set up by Congress and allocated billions of dollars to assist first responders of the 9/11 attacks who now suffer from a slew of illnesses including cancer, post traumatic stress disorder, depression, and memory loss.

According to the complaint, RD approached people who were eligible for payouts from one of these funds — sometimes tens of thousands of dollars — but had not yet received money. The customer would then repay that money when they received the payout they were due.

However, the lawsuit alleges that RD used confusing contracts to misrepresent customers’ obligation to repay these advances. In many cases, claims the complaint, victims were often required to repay RD Legal twice the amount of the advanced funds.

While RD Legal claimed that deals were simply advances, the government alleges that in reality the company offered victims loans or lines of credit with fees and interest rates reaching as high as 250%.

In one specific case, the lawsuit alleges that a severely disabled 9/11 first responder received his compensation-fund check three months after he borrowed $35,000 from RD. Under his advance agreement, the man was required to repay $63,636. As a result, the transaction carried an interest rate of over 250%.

Although RD Legal successfully collected payments from consumers after they received payouts, the lawsuit claims the company had no legal authority to do so, as the transactions were not valid under New York, which caps interest rates at 25%.

The complaint alleges that in addition to deceiving consumers on how much they would have to repay after an advance, RD Legal also falsely claimed that it could expedite funding and “cut through red tape” related to when victims would receive their settlement or fund payouts.

In a post on the company’s website from Jan. 2017, RD Legal claims it can fast-track payment of NFL concussion plaintiff’s attorney fees. The company claims that “a possible delay in payment might continue to ensue,” but that the company “is ready to advance a portion of the fees plaintiffs’ attorneys are expecting to receive.”

RD Legal also allegedly misrepresented to consumers when they would receive money from the company. On its website, the company promised potential customers they would receive money within several days, but some customers often didn’t receive the advances for months.

The lawsuit seeks to put an end to RD Legal’s advance practices and to return millions of dollars to victims.

Consumerist has reached out to RD Legal for comment on the lawsuit. We’ll update this post when we hear back.

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