Landmark consumer protection bills that passed out of Vermont and Indiana this spring are set for implementation on July 1, 2016. These new statutes will create regulatory frameworks for consumer legal funding that provide comprehensive consumer protections crafted specifically for the product, and also preserve consumer access, largely adopting industry best practices.
The new statutes provide for notice and disclosure standardization of contracts, attorney sign off, protection of attorney-client privilege, and the banning of attorney referral fees. The legislation also makes the important distinction that consumer legal funding is not a loan. Because it’s a sale and purchase of an asset, not a loan, if a person loses their case, they owe nothing. It also can’t affect a person’s credit, put them into collections, or cause other collateral damage.
The legislation will also lead to consumer choice—especially in Vermont, where Attorney General William H. Sorrell’s Office and the Vermont Department of Financial Regulation (DFR) took over six months investigating the issue of consumer legal funding, issuing recommendations to the General Assembly. This is some of the most thoughtful legislation on consumer legal funding to be passed in the United States.
Both states saw the need for consumer legal funding, and validated its place as a necessary option for consumers. This is a really important step, and one that truly protects consumers.
Read more in our press release.
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