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Consumer Finance Insights
February 9, 2017

CFPB and New York Attorney General File Suit Against Settlement Company For Allegedly Defrauding 9/11 Responders and NFL Players with Illegal Loans

On February 7, the Consumer Financial Protection Bureau (CFPB) and the New York Attorney General (NY AG) jointly announced they filed suit in the U.S. District Court for the Southern District of New York against a settlement advance company and its founder.  The Complaint alleges that the company violated section 1054 of the Consumer Financial Protection Act (CFPA), 12 U.S.C. § 5564, New York Executive Law § 63(12), and New York General Business Law (GBL) Article 22-A, §§ 349 and 350 by defrauding 9/11 Responders and NFL players.

According to the complaint, the company provided cash advances to 9/11 first responders who had been awarded settlements as a result of health issues caused by their service after the September 11, 2001 World Trade Center attacks.  The company offered similar advances to NFL players awarded settlements as a result of concussions or other head injuries. According to the complaint, the repayment terms on the cash advances required recipients to repay amounts that were significantly more than the advances provided, often by a factor of two or more. The CFPB and NY AG further allege that these advances represented illegal loans because they charged interest rates that exceeded state usury laws. The company also allegedly misrepresented the contract repayment terms, falsely claimed that it could expedite settlement award funding, and misrepresented when recipients would receive funds.

The CFPB and NY AG have requested that the Court declare all the repayment contracts void, award damages, civil penalties and other monetary relief, order disgorgement of all ill-gotten revenue, and enjoin the defendants from committing further violations of the CFPA or New York state law.

The post CFPB and New York Attorney General File Suit Against Settlement Company For Allegedly Defrauding 9/11 Responders and NFL Players with Illegal Loans appeared first on Consumer Finance Insights (CFI).