A group of companies making high-interest credit offers to veterans that are marketed as purchases of the individuals’ future pension or disability payments are being sued in federal district court in the District of South Carolina by the Consumer Financial Protection Bureau and South Carolina Department of Consumer Affairs, the bureau announced Wednesday.
The suit was filed Tuesday against Katharine Snyder, Performance Arbitrage Company, Inc., and Life Funding Options, Inc. CFPB says that the companies, owned and operated by Snyder, brokered contracts offering high-interest credit to veterans, many of whom are disabled, and to other consumers. The bureau alleges that the companies and their owner violated the Consumer Financial Protection Act’s prohibition against deceptive acts or practices.
The Bureau and South Carolina specifically allege that Snyder and her companies misrepresented to consumers that the contracts the companies broker are valid and enforceable when, in fact, the contracts are void under federal and state law; misrepresented to consumers that the product is a sale of payments and not a high-interest credit offer; and failed to inform consumers of the products’ interest rates. The complaint seeks an injunction against Snyder and her companies, redress to consumers, and the imposition of a civil money penalty.
The Bureau’s investigation was conducted in partnership with South Carolina, the bureau noted.
The bureau noted similar past cases it has pursued. In January 2019, the bureau noted, it settled with Mark Corbett, a broker of contracts offering high-interest credit to veterans. In August 2019 in partnership with the Office of Arkansas Attorney General Leslie Rutledge, the bureau settled with Andrew Gamber; Voyager Financial Group, LLC; BAIC, Inc.; and SoBell Corp. The CFPB notes that Corbett worked with both Gamber and Snyder, and their respective companies, to broker contracts offering high-interest credit. “All of these entities used similar contracts and engaged in similar marketing tactics,” it said.
The CFPB also said it recently announced that the Civil Penalty Fund has allocated about $9 million to consumers harmed by Corbett’s actions.
Consumer Financial Protection Bureau and South Carolina File Suit against brokers of High-Interest Credit Offers