Binyamin Appelbaum of The New York Times looks into another lending industry that doesn’t play by the same rules as traditional lenders: those who lend money to lawsuit plaintiffs. He writes:
“Unrestrained by laws that cap interest rates, the rates charged by lawsuit lenders often exceed 100 percent a year, according to a review by The New York Times and the Center for Public Integrity. Furthermore, companies are not required to provide clear and complete pricing information — and the details they do give are often misleading.”
Today’s Tip: “Unabashed, persistent curiosity is the wellspring of great journalism,” Binyamin says. “Look for the things you don’t understand, and keep asking questions until you do.”
Binyamin says the story started when Brian Grow, a reporter then working for the Center for Public Integrity, contacted him about a Florida lawyer who’d been arrested for running a Ponzi scheme. Most of his investors bought into his plan to invest in lawsuits.
“Most coverage treated this sales pitch as a piece of color, a curiosity. Who had ever heard of investing in lawsuits?” Binyamin says. “But Brian recognized that scams only work if they sound plausible — and this one had attracted more than a billion dollars.”
Brian left for Reuters, but Binyamin continued working on the story with Ben Hallman at CPI, he says. The stories are part of a series “Betting on Justice,” looking into those who legitimately invest in lawsuits.