Lieff Cabraser is investigating allegations of fraud and other deceptive practices by taxi medallion lenders in connection with loans provided to New York City taxicab drivers to finance the purchase of taxi medallions.
As reported by the New York Times in May of 2019, various taxi medallion lenders and related financial institutions in their network provided loans to New York City taxicab drivers to help those drivers purchase taxi medallions. In the Times’ reporting, allegations surfaced of artificial inflation of medallion prices, and the issuance of reckless loans to low-income buyers.
Many of the drivers reported signing interest-only loans that included exorbitant fees, including cases where lenders required borrowers to split loans to charge higher interest on one portion of the loan. In some cases, lenders submitted applications indicating that the borrower had an income nearly five times that which was stated on the borrower’s tax return; such a practice would potentially allow the lender to issue a much larger loan to a prospective borrower, and thereby allow the lender to charge higher interest, and more fees. Many of the loan agreements reported on by The Times included so-called ‘balloon provisions’ that allowed a lender to dramatically increase interest rates, to as high as 24%, if the loan was not fully repaid in three years.
When the price of taxi medallions suddenly dropped, hundreds of drivers were left unable to pay the minimum payments, the interest, or the fees associated with their loans. Several drivers have declared bankruptcy; some committed suicide.
If you are or were a New York City taxicab driver, who relied on a taxi medallion lender, broker, or bank for a loan to purchase a taxi medallion, we invite you to complete the contact form below or call us toll-free at 1-800-541-7358.
Contact a Consumer Protection Lawyer at Lieff Cabraser
Lieff Cabraser is a national law firm that represents consumers and small businesses throughout the United States in fraud and deceptive practices lawsuits. The information you provide will assist our investigation. We will review and evaluate your complaint for free and without any obligation on your part.