By: Linda L. Goodman
The Consumer Financial Protection Bureau (“CFPB”) and the Office of the Arkansas Attorney General yesterday filed a proposed stipulated judgment and settlement with Andrew Gamber; Voyager Financial Group, LLC; BAIC, Inc.; and SoBell Corp. The companies, owned and operated by Gamber, were brokers of contracts offering high-interest credit to veterans, many of whom are disabled, as well as other consumers. Essentially the Defendants set up contracts between consumers and investors where consumers receive a lump-sum payment, ranging from a few thousand to tens of thousands of dollars, and were thereafter obligated to repay a much larger amount by assigning to investors part of consumers’ monthly pension or disability payments. The consumers’ obligations typically last five to ten years. 13.
The majority of the high-interest credit offers Defendants brokered were for veterans who have Department of Veterans Affairs (“VA”) disability pensions or pensions administered by the Defense Finance and Accounting Service (“DF AS”). The VA establishes a veteran’s level of disability compensation and administers disability pensions. DF AS is a federal 3 Case 4:19-cv-00565-BSM Document 1 Filed 08/14/19 Page 3 of 13 agency within the Department of Defense; it includes an office that issues monthly pension payments to military retirees. From at least 2011 through 2016, Defendants’ contracts required veterans to go into their VA or DF AS online portal and change their entire pension direct-deposits or their monthly allotments to be routed directly into a bank account controlled by Defendants or Defendants’ agents.
If veterans contracted to sell only part of their pensions through Defendants, Defendants would receive the veterans’ entire pension direct-deposits or monthly allotments and then remit portions of them to the veterans’ bank accounts.
The Bureau and the Arkansas Attorney General alleged that Gamber and his companies misrepresented to consumers that the contracts the companies facilitate are valid and enforceable when, in fact, the contracts are void under federal and state law; misrepresented to consumers that the product is a sale of payments and not a high-interest credit offer; misrepresented to consumers when they will receive their funds; and failed to inform consumers of the applicable interest rate on the credit offer.
Under the proposed settlement, Gamber and the companies are permanently banned from brokering, offering, or arranging agreements between pension recipients and third parties under which the consumer purports to sell a future right to an income stream from the consumer’s pension. The proposed settlement would also impose a judgment for redress of $2.7 million, a civil money penalty of $1 to the Bureau, and a payment of $75,000 to the Arkansas Attorney General’s Consumer Education and Enforcement Fund in lieu of a civil money penalty to the State of Arkansas. As explained in the proposed order, full payment of the judgment for redress would be suspended upon Gamber paying $200,000 for consumer redress, the civil money penalty to the Bureau, and the $75,000 to the State of Arkansas. The suspension of the full payment for redress, as well as the $1 civil penalty, is based on Gamber’s inability to pay more based on sworn financial statements. Harmed consumers may be eligible for additional relief from the Bureau’s Civil Penalty Fund.
The complaint is available at: https://www.consumerfinance.gov/documents/7891/cfpb_complaint_andrew-gamber-voyager-financial-group-baic-sobell_2019-08.pdf
The proposed stipulated final judgment and order is available at: https://www.consumerfinance.gov/documents/7895/cfpb_andrew-gamber-voyager-baic-sobell_proposed-final-judgement_2019-08.pdf
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This article was originally posted on Cliclaw.com as part of my ongoing efforts to share valuable legal insights. I regularly contribute guest blogs to leading websites in the field of internet compliance. In these posts, I cover a range of topics to help businesses stay compliant in the ever-evolving digital world. You can read my latest guest contributions on Cliclaw.com.
This article is a publication of The Goodman Law Firm and is intended to provide information on recent legal developments. This article does not create an attorney-client relationship, nor should it be construed as legal advice or an opinion on specific situations. This may constitute “Attorney Advertising” under the Rules of Professional Conduct and under the law of other jurisdictions.
Linda L. Goodman is the founder of The Goodman Law Firm, concentrating its practice in internet business and law. Her firm’s clients include Advertisers, Affiliates, Affiliate Networks, and ISP’s.
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