CFPB Complaint v Reliance Funding et al | Important Take Aways

by Structured Settlement Watchdog

Sham Independent Professional Advice by Rockville MD lawyer Charles E Smith

37. Smith’s phone calls with consumers lasted just a few minutes, during which time he recited the terms of the contract offered by Access Funding and asked whether the consumers understood them. In some instances, Access Funding salespeople were on these calls along with Smith and a consumer.
38. Smith provided to Access Funding a substantially similar letter for every consumer to whom he purported to provide IPA services stating that the consumer had received “independent professional advice.” Access Funding then submitted the IPA letters to the court for approval of the transfer.
39. Access Funding paid Smith $200 for each IPA letter he provided.
40. Access Funding often had consumers sign statements indicating that they had received IPA services before the consumers had spoken to Smith.

55. Smith misrepresented his independence from Access Funding. He had personal and professional ties to the Access Funding Defendants and was paid directly by Access Funding. Smith’s lack of independence was material to consumers, who, had they known Smith was not independent, likely would have known that his advice was insufficient to move forward with the transaction

CFPB Clearly Has Its Eyes on the Advances provided by Structured Settlement Factoring and views them as Predatory

41. Access Funding provided advances to many consumers, both in Maryland and elsewhere, while the consumers waited to complete their paperwork and finalize their transfers. These advances often consisted of $500 for signing a contract, $1000 when a court date was set, and another $1000 when a judge approved the sale.
42. Jundanian, Boghosian, and Borkowski each participated in establishing Access Funding’s policies related to advances, including the terms of the advances and how they were presented to consumers, and dictated when Access Funding would issue advances to consumers.

43. Access Funding’s advance agreements stated that consumers were required to cooperate fully with the company in obtaining court approval for the contemplated transfer and that consumers would be liable for the advance if the transaction was not completed

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Such advances are commonplace when structured settlement buyers engage prospective customers  

Terrence Taylor,  the black amputee burn victim, whose transfer petitions were presided over in Virginia, by the judicial equivalent of a negligent bartender,  that collectively approved 11 transactions in 2 years,   was plied with over $200,000 in "cash advance cocktails" in an epic systemic failure.  Taylor's case, which was the subject of a front page story in the Washington Post in December 2015 and a Wall Street Journal story in March  2015

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CFPB sought the following relief from the Court against Access Funding Defendants:

a. permanently enjoin Defendants from participating in the structured-settlement industry in any way;
b. award damages or other monetary relief against Defendants;
c. order Defendants to pay redress to consumers;
d. order disgorgement of ill-gotten revenues by Defendants;
e. impose civil money penalties on Defendants under the CFPA;
f. order Defendants to pay the Bureau’s costs incurred in connection with prosecuting this action; and
g. award additional relief as the Court may determine to be just and proper.

The CFPB seeking to ban Access Funding, Reliance Funding, Jundanian, Boghosian et al. from the industry is an important step in regulation of the structured settlement secondary market.  The contemplation of consequences and possible loss of livelihood is an effective deterrent.

CFPB complaint v Access Funding et al. Download 201611_cfpb_Access_Funding_Complaint_filed

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
BALTIMORE DIVISION
CONSUMER FINANCIAL
PROTECTION BUREAU
1700 G Street, NW
Washington, DC 20552
Plaintiff,
v.
ACCESS FUNDING, LLC
6900 Wisconsin Avenue, Suite 700
Chevy Chase, Maryland 20815
Montgomery County
ACCESS HOLDING, LLC
6900 Wisconsin Avenue, Suite 700
Chevy Chase, Maryland 20815
Montgomery County
RELIANCE FUNDING, LLC
6900 Wisconsin Avenue, Suite 700
Chevy Chase, Maryland 20815
Montgomery County
LEE JUNDANIAN
6900 Wisconsin Avenue, Suite 700
Chevy Chase, Maryland 20815
Montgomery County
RAFFI BOGHOSIAN
6900 Wisconsin Avenue, Suite 700
Chevy Chase, Maryland 20815
Montgomery County
MICHAEL BORKOWSKI
7105 Ridgewood Avenue
Chevy Chase, Maryland 20815
Montgomery County