Earlier this month the Louisiana House Commerce Committee rejected a bill that would have protected vulnerable consumers from predatory lawsuit loans. The vote was 11-6 to kill this common sense bill.

If you’ve watched late-night television anytime in the last decade, chances are you have seen these ads from lawsuit lenders promising unsuspecting consumers access to fast cash. “Involved in a lawsuit and need money now? Give us a call.” “No credit, no problem. Get cash now, before your case settles.”

They claim the money is quick and easy, but there is a reason they don’t advertise prices. That’s because it is not cheap. In fact, lawsuit loans are very expensive—perhaps the most expensive kind of loan available to consumers in Louisiana.

Because they are currently unregulated by laws that cap interest rates, lawsuit lenders often charge hidden fees and exorbitant interest rates that can exceed 150 percent annually. To put that number in perspective, the average annual interest rate on a home loan is about 3.5 percent. What’s worse is these lenders are not currently required to provide clear and transparent pricing information, so it is difficult for consumers to get a handle on the costs.

For example, take the case of Ernesto Kho, who borrowed $10,500 from a lawsuit lender following a car accident. Two years later, he got a $75,000 settlement, but he owed the lender almost $36,000. That’s nearly half of his recovery and more than three times what he originally borrowed. And Mr. Kho was one of the lucky ones. Sometimes, borrowers can end up up-side-down, actually owing the lender once their case has settled, creating a vicious cycle of debt.

Lenders claim they fill a void in the marketplace by providing out-of-luck plaintiffs with the cash they need to live while they are waiting for their lawsuits to settle. But in reality, they are preying upon vulnerable people who can least afford to be taken advantage of and leveraging our courts for profit.

It is unconscionable that we allow these questionable practices to continue without establishing some reasonable, common sense rules about how lawsuit lenders can operate in Louisiana. That’s exactly what Senate Bill 166 aimed to do—and it is disheartening that some members of the House Commerce Committee failed to take the time to understand the issue and ultimately rejected these reforms. By capping the interest rates lawsuit lenders can charge and subjecting these companies to licensing requirements under the Louisiana Consumer Credit Law, we could have provided some measure of relief to vulnerable people who can least afford to be taken advantage of, as well as prevented some unnecessary lawsuits in Louisiana.

Since the inception of this dubious industry, lawsuit lenders have worked to avoid state regulations, caps on interest rates and licensing requirements by describing their loans as “investments.” But, as the old saying goes, “If it looks like a duck and acts like a duck, it’s a duck.” Simply put, these are loans and they should be regulated accordingly. Every other type of loan is regulated and capped in Louisiana—from bank loans, to car loans, credit cards, pawnshop loans and payday loans. These should be, too.

In fact, our current laws support this position because we already have regulations in place for bricks-and-mortar lawsuit lenders in our state. SB 166 sought to apply the law evenly to out-of-state lenders so that all companies operating in Louisiana would have to play by the same rules and all consumers would have been protected from predatory lawsuit loans, whether they walked into a building down the street or initiated a loan over the Internet.

SB 166 garnered support from every end of the political spectrum. From plaintiffs’ attorneys to leading business groups, the list of supporters was broad and diverse. That’s because it makes sense to protect vulnerable consumers from being re-victimized by lawsuit lenders.

It is truly disappointing that some members of the House failed to appreciate these facts. I hope the Legislature will reconsider the issue. Until then—consumers beware. There is an unregulated lawsuit loan shark near you.