The CFPB penalized a man $1 this week, for illegally exchanging veterans’ pensions for high-interest “cash advances.” Mark Corbett claimed in sworn statements to the bureau that he had an inability to pay any fine of greater value, and the bureau accepted $1 as payment for making illegal, high-cost loans to former members of the armed forces.
Corbett was the agent for websites that offered to trade veterans’ pensions and disability benefits for cash advances; veterans would redirect their pension direct-deposits to the companies’ bank accounts and get a lump-sum in return. This is illegal. What’s more, the companies insisted that they didn’t have comply with the legal obligation on lenders to inform borrowers of the effective interest rates, because this wasn’t a loan, “you are selling a product for a set price.” This is also illegal.
Here is the CFPB announcement:
The Bureau found that Corbett violated the Consumer Financial Protection Act of 2010 by misrepresenting to consumers that the contracts he facilitates are valid and enforceable when, in fact, the contracts are void because veterans’ pension payments are unassignable under federal law; misrepresenting to consumers that the offered product is a purchase of payments and not a high-interest credit offer; misrepresenting to consumers when they will receive their funds; and failing to disclose to consumers the applicable interest rate on the credit offer.
Corbett is permanently banned from brokering, offering, or arranging agreements between veterans and third parties under which the veteran purports to sell a future right to an income stream from the veteran’s pension. Corbett must also pay a civil money penalty of $1, an amount that accounts for Corbett’s inability to pay more based on sworn financial statements that he provided to the Bureau and Corbett’s ongoing cooperation with the Bureau’s investigation.
Blindly and willingly rip off Veterans and get a laughable fine. Accidentally repossess a vehicle wrongly, watch the hell out.