Following the lead of a number of state attorneys general, the Bureau of Consumer Financial Protection yesterday filed suit against Future Income Payments, a pension advance company, for allegedly engaging in deceptive marketing tactics.
This marked the first suit that has been filed against a company since Mick Mulvaney was named acting director of the BCFP last November.
The suit names 15 defendants, including Future Income Payments LLC, Scott Kohn, and the following related entities: FIP LLC; BuySellAnnuity Inc.; Cash Flow Investment Partners LLC; Pension Advance LLC; Cash Flow Investment Partners East LLC; Cash Flow Investment Partners MidEast LLC; Lumpsum Pension Advance Atlantic LLC; Lumpsum Pension Advance Southeast LLC; Lumpsum Settlement West LLC; PAS California, LLC; PAS Great Lakes, LLC; PAS Northeast LLC; PAS Southwest LLC; Pension Advance Carolinas LLC; Pension Advance Midwest LLC, and Pension Loans South LLC.
The defendants offer lump sum payments in exchange for payments taken from future income streams, such as pensions.
In the suit, which was filed in the District Court of the Central District of California, the defendants are accused of representing that their products are not loans, that there is no applicable interest rate, and that the cost of the lump sum payment is less than alternative funding sources, like credit cards. The defendants are accused of violating the Consumer Financial Protection Act.
A copy of the complaint can be accessed by clicking here.
The defendants have originated more than $150 million in completed transactions, according to the company’s website. Despite saying there is no interest rate, individuals pay as much as 183% when conducting a transaction with the defendants, according to the complaint.
In March, the attorney general of Virginia filed suit against Kohn and FIP, for offering illegal loans in the state.
