Refund checks issued to New York retirees decieved by pension advance companyStaff Writer |
Empire State The consent order resolved the investigation
Refund checks totaling $541,835, as well as loan forgiveness information, were issued to 115 retirees in New York.
FIP was not licensed to make loans in New York, nor was it licensed as a money transmitter.
An investigation by DFS found that the company solicited and made loans to retired consumers at high interest rates in exchange for retirees assigning away several years of their pension benefits to pay for the unlawful loans.
The consent order resolved the investigation by DFS, which found that FIP made loans in New York State without a lending license, charged a usurious rate of interest on loans to New York pensioners, transmitted money to and from New York State without a money transmitter license, misrepresented to New York pensioners the legal status of the transactions by characterizing the loans as sales of an asset, and omitted the annual percentage rate of the loans.
The refunds were mailed Friday to 108 New York residents and seven former residents.
In addition to mandating the refunds, the consent order required FIP to pay a $500,000 fine and stop engaging in all consumer-related transactions within New York State and with any New York resident.
FIP was also required to reduce the total amount owed by pensioners to the actual value of the lump sum that was advanced and forgive amounts due above that amount, resulting in forgiveness of more than $6.3 million across 292 transactions. ■
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