Pension Income, LLC

Agency: Consumer Financial Protection Bureau
Description:

 On August 20, 2015, the Consumer Financial Protection Bureau ("CFPB") and the New York Department of Financial Services ("NYDFS") filed a Complaint against Pension Funding, LLC, Pension Income, LLC Steven Covey, Edwin Lichtig, and Rex Hofelter, collectively, the Defendants, for violations of the Consumer Financial Protection Act ("CFPA") and New York Banking and Financial Service Laws ("NYSBFSL"). The Complaint charges the Defendants deceived consumers about the costs and risks of their pension advance loans. The CFPB and NYDFS allege the Defendants fooled consumers into borrowing against their pensions by deceptively marketing the product as a sales lead instead of a loan and failing to disclose high interest rates and fees. In some cases, the Defendants advised consumers that the product was better than a home equity line of credit or a credit card because of lower rates and fees. In reality, the effective interest rate typically was greater than 28 percent, higher than many comparable products available to consumers. Charges for life insurance and other fees also applied. Further the CFPB and NYDFS allege the companies' misrepresentations deceived consumers, and interfered with consumers' ability to understand the risks, costs, and conditions of the transactions. The Complaint charges the Defendants took advantage of consumers' lack of understanding of the product and inability to protect their interests. The NYDFS further alleges claims against the Defendants under New York state law, including the Defendants charged interest rates that violated New York usury laws, they illegally transmitted money without a license, and violated state laws prohibiting deception. 

The CFPB and NYDFS Complaint seeks to permanently prevent Defendants from committing future violations of the CFPA and NYBFSL laws, and pay redress and other monetary relief to consumers. The Complaint has been filed with the U.S. District Court of California.