This morning, the Indiana State General Assembly’s Senate Civil Law committee sent a bill to the Senate floor that would bring smart regulation to consumer legal funding providers and strong consumer protections to the people of Indiana. Senate Bill 353, sponsored by Sen. Randall Head, is aligned with our ARC best practices and met with no opposition. The committee vote was 7 to 0. If the bill is passed in its current form and signed into law, Indiana would join with states like Oklahoma, Ohio, Nebraska, and Maine that have established strong consumer protections for constituents and promoted a pro-business environment to help the economy grow.
ARC best practices:
- Require plain English and transparent contracts that clearly shows the consumer’s rights and obligations.
- Require consumers to know the first day of the contract how much they may have to repay every six (6) months and the MAXIMUM amount the purchaser may ever receive out of a recovery.
- Require that the consumer has the Right of Rescission for five (5) days after receiving proceeds from the sale.
- Require consumers to inform attorney of the funding providers contract and requires attorney to acknowledge having been informed.
- Prohibits the sale proceeds provided to consumers from being used to fund any part the litigation process. Can only be used for household needs.
- Prohibits providers from interference or decision making with respect to the pursuit of the legal claim.
- Prohibits the payments of commissions, referral fees, rebates, etc., to attorneys, law firms, medical providers, chiropractors, or physical therapist or any of their employees.
- Requires funding providers to include registration fees, the posting of bonds to ensure solvency, and the filing of all forms and contracts with the state authorities.
- Prohibits false and misleading advertising by funding providers.
- Prohibits attorney’s from having any financial interest in a funding provider that transacts with their clients.