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Press Release

October 20, 2016

Contact: Richard Loconte, 212-709-1691


Investigation Finds California Company Intentionally Misrepresented Loans Offered to Retirees and Charged Illegally High Interest Rates

Financial Services Superintendent Maria T. Vullo today announced that the Department of Financial Services (DFS) has entered into a consent order with Future Income Payments, LLC (FIP), and its owner Scott Kohn, requiring them to return ill-gotten funds to consumers, pay a $500,000 fine, and ban them from engaging in all consumer-related transactions within New York State and with any New York resident. The action was taken after a DFS investigation found the company intentionally misrepresented the transactions which involved pensioners borrowing lump sum payments in exchange for some or all of their monthly pension benefits.  Under the consent order, FIP will be required to forgive certain debts, make refunds to other pensioners and install a DFS-selected third-party administrator to oversee consumer refunds and loan forgiveness.

“Rather than assisting consumers with their financial needs, the sky-high interest rates that Future Income Payments charged saddled retirees with even more debt after they entered these contracts,” Superintendent Vullo said. “FIP loaned 282 New Yorkers $2.3 million and projected that it would earn $8.8 million under the terms of these agreements, a more than 250 percent profit. Consumers in need of emergency cash should consider conventional bank loans or home equity loans rather than turning to on-line lending schemes marketed with too-good-to-be-true promises.”

FIP marketed its product as a way for pensioners to get cash quickly. Consumers signed agreements with FIP to get one-time lump sum payments and in exchange, made monthly payments of their pensions to FIP for periods of up to 10 years. DFS’s investigation found that FIP made loans to 282 New York pensioners between March 2012 and April 2015. The loans ranged in amounts from $2,500 to $58,500.

The DFS investigation found that FIP improperly described transactions as “sales of assets,” rather than loans. FIP is not licensed to make loans in New York, nor is the company licensed as a money transmitter. In addition, the investigation found the company portrayed interest charges as “discounts” and failed to tell pensioners of annual percentage rates. FIP also violated New York’s interest usury laws which cap interest rates at 16 percent. Some pensioners were charged annual interest rates of more than 130 percent.

Although the agreements were between FIP and pensioners, the terms of the contracts enabled FIP to sell its rights to pension payments to third-party investors, who provided funding to make the original loans. The investors then received proceeds under the pensioners’ repayment obligations after they were received by FIP.

The consent order requires FIP to adjust the total amount owed by pensioners to the actual value of the lump sum that was advanced and to forgive amounts due over that amount. In addition, the company will be required to make refunds to pensioners who paid more than the lump sums they originally borrowed.

DFS will select a third-party administrator to oversee and report to DFS the company’s debt reform, forgiveness, and refund obligations to New York pensioners.  FIP will also be required to revise its advertising to clearly disclose that its pension advance operations may not be conducted in New York State. The company markets its loans nationally through its website and online marketing entities, as well as paid internet search traffic, purchasing consumer leads, and referrals from other pension lenders.

Based in Irvine and Corona del Mar, California, FIP was formerly known as Pensions, Annuities & Settlements, LLC. It uses marketing affiliates operating under the names Cash Flow Investment Partners, LLC, Pension Advance, LLC, and BuySellAnnuity, LLC.

DFS urges anyone who suspects that they have been the victim of a pension advance scheme to contact DFS's Consumer Help Line at (800) 342-3736 or log onto for assistance.

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