Investors and companies offer cash advances to wrongly convicted Americans

In the United States, state and local governments have paid a total of $2.9 billion to Americans who were wrongly convicted of crimes. Thanks to media coverage of these payouts and improvements in DNA technology, investors and companies are offering cash advances to exonerees with the hope of substantial payback if they win their case.

The high cost of wrongful convictions

According to the National Registry of Exoneration, there have been 2,795 exonerations in the US since 1989, and over 25,000 years have been lost behind bars due to wrongful convictions. Although 38 states, the federal government, and the District of Columbia offer some form of wrongful-conviction compensation, these amounts are typically capped per year served. To get a higher payout usually requires a lawsuit against the government, which can be lengthy and costly.

The risk for firms offering advances

Companies that offer advances for wrongful conviction cases face a costly risk. There are no credit checks, collaterals, guarantees, or assets that they can use as security. The only way they can collect their investment is if the claim actually succeeds. Proving one’s innocence in civil court is a long and complicated process. Private firms can be an attractive lifeline for many exonerees, especially due to the financial burden a legal battle with the government can cause.

The problems with litigation loans

Jon Eldan, founder of After Innocence, an organization that helps those wrongfully convicted with post-release assistance, highlights several problems with litigation loans. There are companies that are too aggressive with clients and don’t offer what is the market rate for this kind of loan. Exonerees who take these loans face the risk of being charged exorbitant fees that can create additional financial challenges. Nevertheless, exonerees are often left with little choice but to accept these loans to pursue justice.

In summary, the wrongful conviction of innocent Americans has resulted in significant payouts from the government, which has attracted the attention of investors and companies offering cash advances. These advances are a high-risk investment as they are dependent on the success of the case, and firms offering them face significant challenges. Exonerees who choose to take litigation loans face additional financial burdens, yet are often forced to accept them to pursue justice.