Future Income PaymentsFuture Income Payments, a Delaware LLC, previously known as Pensions, Annuities and Settlements, has recently come under scrutiny during a series of regulatory actions and a civil lawsuit the company filed against the Consumer Finance Protection Bureau. It lost that lawsuit, leading the CFPB to publicly allege the company was issuing loans without a license. It was also the subject of a 2016 action by the State of New York, which alleged it was “operating illegally” and ordered it to cease operations in the state, to pay back interest charged, and to pay a penalty of $500,000. One year before that, the State of California issued a Desist and Refrain order charging that the company, which had been based in Irvine, “engaged in the business of a finance lender or broker without a license from the Commissioner.” Fitapelli Kurta is interested in hearing from individuals who have complaints regarding Future Income Payments and/or its owner and President/CEO, Scott Kohn.

Future Income Payments describes itself as a pension advance company: it provides a payday loan-like product in which customers can obtain a lump sum in return for part or all of the future pension payments. According to the LA Times, those repayments often come with interest payments that some have argued are effectively usurious. Los Angeles City Attorney Mike Feuer, who filed a lawsuit against Future Income Payments in 2017, said that it “charged interest rates as high as 96%, far above California’s 10% usury limit, and threatened borrowers, falsely, that defaulting on the loans could subject them to criminal liability.” As the California Department of Business Overstate noted in its 2015 desist-and-refrain order against the company, Futura Income Payments was not licensed to act as a finance lender or broker.

Feuer, the Los Angeles City Attorney, argued that Future Income Payments engaged in predatory lending, targeting vulnerable customers like senior citizens and veterans. “They prey on the elderly and pensioners, including military pensioners, who are in a tough financial spot,” he told the LA Times. When the CFPB asked the company to produce documents demonstrating its legitimacy, the company countered with its lawsuit alleging the CFPB was unconstitutional.

As described in Forbes, pension advance companies like Future Income Payments argue that they are not, in fact, lenders, but that they purchase an asset from the customer, that asset being the future income stream in the form of pension payments (generally with interest). “Most legal scholars,” however, argue “they are really making unsecured loans backed by unenforceable contracts.” In its 2016 action against the company, the New York Department of Financial Services said that Future Income Payments “lent out $2.3 million to pensioners with the expectation it would reap $8.8 million over time. The Henderson, NV firm lent to 282 pensioners between March 2012 and April 2015, in amounts from $2,500 to $58,500. The interest rates reached as high as 130% a year.” The company was ordered to decrease its customers’ debts to the amounts it originally loaned them—that is, to eliminate the interest charges—and to repay any funds the customers “already paid in excess of the original loan,” per Forbes.

Future Income Payments was also the subject of a 2015 cease-and-desist order by the Washington Department of Financial Institutions, which conducted an investigation that found that Future Income Payments—and its owner and CEO/President, Scott Kohn—had conducted business as a consumer loan company without being licensed to do so by the state. As that order states: “Between at least December 2011 and the date of this Amended Statement of Charges, Respondents conducted the business of a consumer loan company in at least 98 loan transactions when it was not exempt from licensing and did not possess a valid license. Respondents offered consumer loans to at least 83 Washington residents and collected a fee for those services.”

The Washington order includes a list of customers who took advances from Future Income Payments, including: a customer who took a loan of $4,400 and made total payments of $46,568.40 over a 120-month term; a customer who took a loan of $9,700 and made total payments of $60,600 over a 60-month term; a customer who took a loan of $36,600 and made total payments of $109,360.80 over a 120-month term; and a customer who took a loan of $30,000 and made total payments of $89,827.20 over a 120-month term. In that action, Future Income Payments and Scott Kohn were ordered to cease and desist from making consumer loans until they were licensed; they were prohibited from participating in consumer loan business subject to licensure by the state for five years; they were jointly and severally fined $250,000; and they were ordered to jointly and severally refund all fees and interest to affected customers.

The company’s website, which is still operational, lists a mailing address in Henderson, Nevada, and invites new or existing customers to call the company. The Los Angeles lawsuit against the company seeks an injunction prohibiting the company from collecting on loans to California investors and from selling unlawful loans to California investors; it also seeks restitution and civil penalties. A 2017 announcement of the action alleges that in addition to engaging in predatory loan practices, “Kohn also subjects pensioners in default to illegal and harassing debt collection practices, such as repeated telephone calls starting as early as 5:30 a.m.” It alleges further that when he solicits customers to invest in pension loans, he “fails to disclose material information and makes material misrepresentations,” including an allegedly false assurance that the loans are in compliance with relevant laws.

If you or someone you know has lost money investing with Future Income Payments and/or Scott Kohn, call Fitapelli Kurta at 877-238-4175 for a free consultation. You may be eligible to recoup your losses. Fitapelli Kurta accepts all cases on a contingency basis: we only get paid if and when you collect money. Time to file your claim may be limited, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.