CFPB Resolves Alleged UDAAP Claims Against Maryland-Based Structured Settlement Buyer

CFPB sign

On December 17, 2021, the Consumer Financial Protection Bureau (CFPB) announced that it entered into a proposed settlement with a Maryland company that offers lump sum payouts to consumers with structured settlements. The settlement resolves a 2016 complaint filed by the CFPB in the U.S. District Court for the District of Maryland alleging that the company and two of its executives violated the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531, 5536, in connection with unfair, abusive, and deceptive practices related to the transfer of consumers’ future structured-settlement payments in exchange for payments. Specifically, the CFPB alleged that the company and the two executives would direct consumers considering a buyout to a specific attorney for “independent advice,” failing to disclose that the attorney was compensated by the company.

Under the terms of the proposed order the company and the executives must pay $40,000 in disgorgement and a $10,000 civil penalty, and would be permanently banned from referring consumers to certain individuals for advice on structured settlement transactions.

The Bureau noted that many of the individuals targeted by the company had received structured settlements as a result of lead paint exposure and suffered from cognitive impairments.​