Section 436.560

Title XXVIII CONTRACTS AND CONTRACTUAL RELATIONS

Chapter 436

Effective - 28 Aug 2023   

  436.560.  Disclosures, requirements. — All consumer legal funding contracts shall contain the disclosures specified in this section, which shall constitute material terms of the contract.  Unless otherwise specified, the disclosures shall be typed in at least twelve-point bold-type font and be placed clearly and conspicuously within the contract, as follows:

  (1)  On the front page under appropriate headings, language specifying:

  (a)  The funded amount to be paid to the consumer by the consumer legal funding company;

  (b)  An itemization of one-time charges;

  (c)  The total amount to be assigned by the consumer to the company, including the funded amount and all charges; and

  (d)  A payment schedule to include the funded amount and charges, listing all dates and the amount due at the end of each six-month period from the funding date until the date the maximum amount due to the company by the consumer to satisfy the amount due pursuant to the contract;

  (2)  Within the body of the contract, in accordance with the provisions under subdivision (2) of subsection 1 of section 436.554:  "Consumer's Right to Cancellation:  You may cancel this contract without penalty or further obligation within ten business days after the funding date if you either:

  (a)  Return the full amount of the disbursed funds to the consumer legal funding company by delivering the company's uncashed check to the company's office in person; or

  (b)  Mail a notice of cancellation by insured, certified, or registered United States mail to the company at the address specified in the contract and include a return of the full amount of disbursed funds in such mailing in the form of the company's uncashed check or a registered or certified check or money order.";

  (3)  Within the body of the contract, a statement that the company has no influence over any aspect of the consumer's legal claim or any settlement or resolution of the consumer's legal claim and that all decisions related to the consumer's legal claim remain solely with the consumer and the consumer's attorney;

  (4)  Within the body of the contract, in all capital letters and in at least twelve-point bold-type font contained within a box:  "THE FUNDED AMOUNT AND AGREED-UPON CHARGES SHALL BE PAID ONLY FROM THE PROCEEDS OF YOUR LEGAL CLAIM AND SHALL BE PAID ONLY TO THE EXTENT THAT THERE ARE AVAILABLE PROCEEDS FROM YOUR LEGAL CLAIM.  IF THERE IS NO RECOVERY OF ANY DAMAGES FROM YOUR LEGAL CLAIM OR IF THERE IS NOT ENOUGH MONEY TO PAY BACK THE CONSUMER LEGAL FUNDING COMPANY IN FULL, YOU WILL NOT BE OBLIGATED TO PAY THE CONSUMER LEGAL FUNDING COMPANY ANYTHING IN EXCESS OF YOUR RECOVERY UNLESS YOU HAVE VIOLATED THIS CONTRACT.  YOU WILL NOT OWE (INSERT NAME OF THE CONSUMER LEGAL FUNDING COMPANY) ANYTHING IF THERE ARE NO PROCEEDS FROM YOUR LEGAL CLAIM UNLESS YOU OR YOUR ATTORNEY HAVE VIOLATED ANY MATERIAL TERM OF THIS CONTRACT OR UNLESS YOU HAVE COMMITTED FRAUD AGAINST THE CONSUMER LEGAL FUNDING COMPANY."; and

  (5)  Located immediately above the place on the contract where the consumer's signature is required, in twelve-point font: "Do not sign this contract before you read it completely or if it contains any blank spaces.  You are entitled to a completely filled-in copy of the contract.  Before you sign this contract, you should obtain the advice of an attorney.  Depending on the circumstances, you may want to consult a tax, public or private benefits planning, or financial professional.  You acknowledge that your attorney in the legal claim has provided no tax, public or private benefit planning, or financial advice regarding this transaction.".

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(L. 2023 S.B. 103)