Helping the Community with Legal Settlements
Legal settlements can help credit.org further our mission of promoting financial literacy. Cy pres, class action awards or other legal restitution can be used for nonprofit purposes consistent with the intent of the legal judgment.
How it works
If an entity is order to pay restitution or other punitive financial damages, but some of the funds are not disbursed, the court must decide what to do. Giving the money back to the original entity would defeat the court’s purpose in awarding the judgment, so some other destination for those funds must be found. The funds can be directed to a nonprofit organization like credit.org, where they are put to use for the community.
Financial literacy and debt relief are core areas of interest for credit.org. If a debt collector, for example, loses a class-action lawsuit, money is awarded to distribute to members of the “class”, or consumers who were harmed by the illegal collection activity. However, it’s often impossible to find all of the affected consumers, or they decline to accept any award, leaving some of the settlement funds undisbursed.
After an appropriate amount of time and in keeping with court requirements, a court approved nonprofit becomes a recipient of these cy pres funds, putting them to use to help a like class in a way relevant to the original lawsuit, and wherever possible, in the local community affected by the debt collector.
Beside credit and debt collection, we work in areas related to housing, student loans, credit reporting, identity theft, military and veterans, and bankruptcy. We stand ready to serve as the trustee for any outstanding funds related to legal action in these areas. We’ve been trusted by the court in several cases, providing stewardship and oversight of funds, reporting as required, and following any relevant usage restrictions.
If you are looking for a way to award cy pres funds that furthers the intent of the original judgment, contact us today; we have experience in this area and are ready to serve.
Melinda Opperman, Chief Relationship Officer
(800) 449-9818 ext 7888 | Direct: (951) 779-7711