In a case reminiscent of one reported in January, the Consumer Financial Protection Bureau (CFPB) and the Office of the Arkansas Attorney General on Tuesday filed a proposed settlement that bans a broker – Andrew Gamber – and his companies from ever again arranging agreements in which pension recipients, mostly veterans, purport to sell to a third party future rights to the income stream from their pensions.
The proposed settlement provides for $2.7 million in consumer redress, with $2.5 million of that suspended if, under a proposed timeline, Gamber and his companies (Voyager Financial Group, LLC; BAIC, Inc.; and SoBell Corp.) pay $200,000 of the redress; Gamber pays $75,000 to the Arkansas Attorney General’s Consumer Education and Enforcement Fund (in lieu of a civil money penalty to the state); and Gamber pays a $1 civil money penalty (CMP) to the CFPB within 10 days.
The suspension of the full payment for redress, as well as the $1 CMP, “is based on Gamber’s inability to pay more based on sworn financial statements,” the bureau said in a release Wednesday. “Harmed consumers may be eligible for additional relief from the Bureau’s Civil Penalty Fund,” it said.
The CFPB said Gamber and his companies were brokers of contracts offering high-interest credit to veterans, many of whom are disabled, and to other consumers who entered into contracts related to their pension income streams. These contracts, according to the proposed settlement and order, were brokered between Jan. 1, 2011, and Dec. 31, 2017.
The bureau and the Arkansas AG alleged that Gamber and his companies misrepresented to consumers that the contracts the companies facilitated are valid and enforceable when, in fact, the contracts are void under federal and state law (federal law prohibits agreements under which another person acquires the right to receive a veteran’s pension payments); misrepresented to consumers that the product is a sale of payments and not a high-interest credit offer; misrepresented to consumers when they will receive their funds; and failed to inform consumers of the applicable interest rate on the credit offer.
The complaint calls the alleged activities deceptive acts or practices under the Consumer Financial Protection Act.
Another high-interest credit broker who is charged with similar activities was also banned in January and assessed a $1 CMP.