With some former NFL players in financial duress and diminished health, predatory lenders are taking advantage of their situation.
The New York Times reports that lenders have been targeting former NFL players involved in the NFL concussion lawsuit by offering them thousands of dollars in loans. According to the article by Ken Belson, there’s no time limit for repayment. But as you might expect, there is a significant catch. The loans come with interest rates of “40 percent or higher.”
Lenders are targeting NFL players because of their financial needs, but especially have eyes on a potential settlement with the NFL that could pay millions of dollars.
“Yet the recipients are a very specific and, some worry, vulnerable group: short-of-cash former N.F.L. players with cognitive impairment from years of collisions on the field.
The lenders are targeting this group because the former players stand to receive as much as $5 million each in a landmark legal settlement with the N.F.L. that an appeals court affirmed last month.”
The NYT reports that multiple players have borrowed “thousands” of dollars from lenders, banking on the payouts they’re set to receive from the NFL. It’s a dirty, yet legal tactic. Belson spoke with experts who explained that the high-interest rates act as a “trap door” which can significantly impact the settlement number.
“It’s predatory, it’s one-sided and it preys on people with brain injuries,” said Richard H. Adler, a lawyer in Seattle who is not affiliated with the players but specializes in representing clients with traumatic brain injuries. “You’re lending to someone who may not have the full legal capacity to understand what they are signing.”
Taking advantage of players who have debilitating brain injuries and suffering from cognitive impairment, and also in poor financial shape is about as low as it gets. The lenders know a payout is coming to them and trying to pounce on the opportunity. The players who take loans will be hampered by the insane interest rates, which will cut from their settlement and could wipe out some rewards entirely. Yet word is circling among retired players about the loans, and are either willing to look past or unaware of the hazard presented by those interest rates. They see a chance to get money that can help pay off bills and debts.
There is some risk for the lenders, as some of the players won’t qualify for cash settlements from the NFL. And if that’s the case, they won’t have to repay the loan. But these companies have their eyes on the big potential payday and if the reward is large enough, the losses will be viewed as negligible.
Lenders are swimming like piranhas hoping that a former player in financial need signs a loan, so they can cut them down even further and make a bunch of money. It’s despicable. Unfortunately, the NFL has left its players in poor enough shape where some may see it as necessary.
