The Consumer Financial Protection Bureau and the South Carolina Department of Consumer Affairs filed a lawsuit in federal district court in the District of South Carolina against Katharine Snyder, Performance Arbitrage Company, Inc., and Life Funding Options, Inc.
The companies, owned and operated by Snyder, brokered contracts offering high-interest credit to veterans, many of whom are disabled, and to other consumers. The bureau alleges that the companies and their owner violated the Consumer Financial Protection Act’s prohibition against deceptive acts or practices.
The two agencies specifically allege that Snyder and her companies misrepresented to consumers that the contracts the companies broker are valid and enforceable when, in fact, the contracts are void under federal and state law. They also allegedly misrepresented to consumer what the product was, claiming it was a sale of payments and not a high-interest credit offer, and failed to inform consumers of the products’ interest rates.
The complaint seeks an injunction against Snyder and her companies, redress to consumers, and the imposition of a civil money penalty. The bureau’s investigation was conducted in partnership with South Carolina.
This is the latest in a series of actions taken by the CFPB against other brokers to address illegal practices in the marketing or administration of high-interest credit to veterans. In January 2019, the bureau settled with Mark Corbett, a broker of contracts offering high-interest credit to veterans. In August 2019 in partnership with the Office of Arkansas Attorney General Leslie Rutledge, the bureau settled with Andrew Gamber; Voyager Financial Group, LLC; BAIC, Inc.; and SoBell Corp. Corbett worked with both Gamber and Snyder, and their respective companies, to broker contracts offering high-interest credit.
These entities used similar contracts and engaged in similar marketing tactics, the bureau said, alleging that these contracts violate laws and are void and render them void, contrary to the representations made by Corbett, Gamber, Snyder, and their companies. Additionally, the bureau alleged that both Gamber and Snyder made similar misrepresentations to veterans including failure to disclose the interest rates for the products they broker.
The bureau recently announced that the Civil Penalty Fund has allocated about $9 million to consumers harmed by Corbett’s actions.