Consumer Bureau Action Tracker

CFPB v. Pension-Funding-LLC and-Pension Income LLC


State

Nationwide

target

Pension Funding, LLC, Pension Income, LLC, Steven Covey, Edwin Lichtig, and Rex Hofelter

Topics

Enforcement, Loans

In 2015, the CFPB, along with the New York Department of Financial Services, sued Pension_Funding_LLC and_Pension Income LLC, alleging they had “deceived consumers about the high rates of [their] loans” and “tricked consumers into borrowing against their pensions.” The case is still open as of February 28, 2017.

  • This case, 8:15-cv-01329, was filed in the U.S. District Court Central District of California Southern Division._ “Pension_Funding_is based in Huntington Beach, California” and “Pension Income was based in Huntington Beach but relocated to Lafayette, California, according to the suit.” The companies engaged in the scheme “from 2011 until about December 2014.” The loans “on average had an effective annual interest rate of 28.56%” [Marcy Gordon, “Regulators sue 2 companies making loans against pensions,” Associated Press, 08/20/15; Kevin McCoy, “Pension ‘advance’ firms sued over deceptive practices,” USA Today, 08/20/15]
  • The companies “used deceptive marketing tactics to target the pensions of seniors and military personnel” and “tricked consumers into borrowing against their pensions by portraying the deals as sales instead of loans, and failing to disclose high interest rates and fees.” These loans are referred to as “pension advance loans.” [Marcy Gordon, “Regulators sue 2 companies making loans against pensions,” Associated Press, 08/20/15]
  • The lawsuit alleged “that the companies violated the 2010 law overhauling financial regulation after the financial crisis by misrepresenting the products as sales rather than loans, and failing to disclose high rates and fees for the loans. In some cases, the promoters implied to consumers that they could face criminal prosecution if they stopped making payments, the suit said.” Both companies “paid to steer Internet search traffic to their websites by targeting consumers who conducted Google browser searches for such phrases as ‘pension loan’ or ‘sell my pension,’ the lawsuit charged.” Their websites “described ‘tailored financing programs’ in which the firms purported to make lump-sum payments for eight years of future income from consumers’ pension payments.” [Marcy Gordon, “Regulators sue 2 companies making loans against pensions,” Associated Press, 08/20/15; Kevin McCoy, “Pension ‘advance’ firms sued over deceptive practices,” USA Today, 08/20/15]

Status

Open


8:15-cv-01329 8/20/2015 8/20/2015

CFPB and New York Department of Financial Services Sue Pension Advance Companies for Deceiving Customers About Loan Costs
http://www.consumerfinance.gov/policy-compliance/enforcement/actions/pension-advance-companies/

  • Consumer Financial Protection Bureau (CFPB)
  • Federal district court case
  • U.S. District Court Central District of California Southern Division
  • Nonbank
  • Pending
  • Not Available

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