The CFPB recently announced the terms of a stipulated judgment and order in its lawsuit filed in November 2016 against (1) Access Funding, LLC (Access), a limited liability company that purchases structured settlements from consumers and two related companies (Access); (3) three individual principals of Access; and (4) an attorney who purported to provide advisory services to consumers who sold structured settlements to Access. The stipulated judgment and order was entered by the court on December 17, 2021.
The Bureau’s complaint alleged that Access steered Maryland consumers to the attorney defendant so the attorney could satisfy a requirement of Maryland law that, for a court to approve a sale of a structured settlement, the consumer must submit a letter stating that he or she consulted with an independent financial advisor (IPA). Access allegedly paid the attorney $200 for each IPA letter. The complaint also alleged that, while consumers waited to finalize the sale of a settlement, Access provided advances to many consumers who had an immediate need for cash and then told consumers that they were liable to repay the advances if they did not complete the sale and, if they were unable to repay the advance, that they were obligated to complete the sale.
The CFPB claimed that the attorney’s conduct was unfair, abusive, and deceptive in violation of the CFPA because, among other things, he did not tell consumers about his relationship to Access and provided virtually no advice to such consumers. It also claimed that Access and its principals (1) provided substantial assistance to the attorney’s UDAAP violations, and (2) engaged in abusive conduct in connection with the advances because consumers did not understand the risks or conditions of the advances, including that the advances did not bind them to complete the transactions. In November 2021, the court entered a stipulated judgment and order against the attorney that required him to pay $40,000 in disgorgement and a $10,000 civil money penalty to the Bureau. The judgment and order prohibits the attorney from participating in or providing advice in connection with any structured settlement transactions.
The stipulated judgment and order require Access and two of the principals named as defendants to pay $40,000 in disgorgement and a $10,000 civil penalty to the Bureau. It would also permanently ban them from misrepresenting the relationship between Access and any provider of independent financial referring consumers to a specific individual or for-profit entity for advice concerning the sale of structured settlements.