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Prepared Remarks of CFPB Director Richard Cordray on the RD Legal Funding Enforcement Action Press Call

Washington, D.C.

Thank you for joining today’s call. It is my honor to be working alongside Attorney General Eric Schneiderman on this matter. He is one of the toughest and most effective advocates for consumers in the country and we thank him for that.

Today the Consumer Financial Protection Bureau is joining forces with New York to sue RD Legal Funding, two related entities, and their owner. We allege that they scammed 9/11 heroes with cancer and other illnesses out of millions of dollars intended to cover their medical costs, lost income, and other critical needs. We also allege that RD Legal targeted National Football League concussion victims with brain injuries in the same manner. In both instances, the company lured vulnerable consumers into surrendering money due to them with lies about the terms of costly financial advances on settlement fund payouts.

Many of the police, firefighters, paramedics, and others who were first responders to the World Trade Center attack on September 11, 2001 suffer from cancers and other respiratory illnesses related to their exposure to dust and debris at the attack site. Many others suffer post-traumatic stress disorder, depression, and memory loss. Through the James Zadroga 9/11 Health and Compensation Act of 2010, Congress allocated billions of dollars to help these heroes with their needs, including mounting medical costs and lost income because of their inability to work.

The other victims named in our lawsuit are former NFL players who have been diagnosed with brain injuries and neurodegenerative diseases, such as Alzheimer’s and Parkinson’s disease, who were entitled to payments from a settlement in a class action lawsuit.

In today’s lawsuit, we allege that RD Legal, based in New Jersey, contacted these consumers after they were awarded their money but before they received it. It swooped in during that gap to offer a purported “deal” – an upfront payment of some of the money, to be paid back later when the consumer received the actual settlement.

We believe that through convoluted contracts, RD Legal misrepresented to consumers what they were being offered. It deceived consumers; interfered with their understanding of the terms, costs, and conditions of the transactions; and prevented them from meaningfully evaluating the offering. And what was offered was expensive. For example, one 9/11 first responder was awarded $65,000 from the Zadroga Fund. While she waited for her full payment, RD Legal advanced her $18,000. When her payment from the fund arrived six months later, she had to repay $33,000 to RD Legal, $15,000 more than she was advanced.

Another victim was duped out of even more money. He was a severely disabled 9/11 first responder who received $35,000 from RD Legal. When he received his check from the Zadroga Fund three months later, he owed RD Legal $63,633 – almost $30,000 more than the company had advanced to him.

We allege that one way RD Legal was able to trick consumers into its scam was by lying about the timelines involving the money. It claimed to consumers that it could “cut through red tape” to obtain their anticipated payments from claims administrators faster than would otherwise be possible. In fact, RD Legal had no authority or ability to change the timing of when any victim compensation or settlement payouts occurred.

The company also misrepresented to consumers when they would receive money from RD Legal. On its website, the company promised that consumers would receive the money within several days of entering into the contract, but some consumers did not receive money until several months after it was promised.

Finally, because we believe that RD Legal’s costly transactions were based on void contracts or that they violated interest rate caps in at least one key state – the State of New York – we allege that it was illegal for RD Legal to attempt to recover its money from the victims.

We look forward to proving all of this in court.

Along with RD Legal Funding, in our lawsuit we named two related entities – RD Legal Finance and RD Legal Funding Partners. We also named Roni Dersovitz, who is the founder and owner of all the entities; we allege that he substantially assisted RD Legal’s violations. Through this lawsuit, the CFPB and the New York Attorney General are seeking to end the defendants’ illegal practices, obtain relief for the victims, and impose penalties.

As we regularly emphasize, the Consumer Financial Protection Bureau is the nation’s first federal agency whose sole focus is to protect consumers in the financial marketplace nationwide. The premise at the heart of our mission is that consumers deserve to be treated fairly and they should have someone who will stand on their side when that does not happen. Through fair rules, consistent oversight, appropriate law enforcement, and broad-based consumer engagement, we are working to restore people’s trust in consumer financial markets and protect them against the kind of illegal conduct described in today’s suit. We are always pleased to partner in our efforts with law enforcement officials from around the country, and are glad to do so again here today. Thank you.

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit