CFPB, South Carolina, and Arkansas File Suit Against Brokers of High-Interest Credit Offers to Veterans

The Consumer Financial Protection Bureau — along with the South Carolina Department of Consumer Affairs and Arkansas Attorney General — recently filed a lawsuit against a South Carolina law firm that worked with several companies that brokered contracts offering high-interest credit to consumers, primarily disabled veterans.

The Complaint, filed in federal district court in the District of South Carolina, alleges that Candy Kern-Fuller, Howard Sutter III, and Upstate Law Group LLC violated the Consumer Financial Protection Act’s prohibition against deceptive practices and against providing substantial assistance to deceptive practices of others.

According to the Complaint, the defendants worked with a series of companies that marketed their credit offers as purchases of consumers’ future pension or disability payments. The Complaint further alleges that the majority of the high-interest credit offers brokered by these companies were for veterans who have Department of Veterans Affairs disability benefits or pensions administered by the Defense Finance and Accounting Service.

The Complaint states that these broker companies “set up contracts between consumers and investors where consumers received a lump-sum payment, ranging from a few thousand to tens of thousands of dollars, and were thereafter obligated to repay a much larger amount.”

According to the CFPB, the broker companies’ contracts are prohibited under federal law because they are agreements under which another person acquires the right to receive a veteran’s pension or disability payments.

Specifically, the Complaint alleges that Kern-Fuller, Sutter, and Upstate Law Group provided substantial assistance to the broker companies’ deceptive and unfair acts. The defendants allegedly conducted underwriting and helped execution of the contracts, approved or denied applications to enter into the transactions, and served as the payment processor for the initial lump-sum payment and fees.

Additionally, consumers’ ongoing, monthly payments allegedly were directed to Upstate Law Group’s account. According to the Complaint, Kern-Fuller, Sutter, and Upstate Law Group tracked consumers’ payments and controlled the distribution of those payments to the investors.

If you were a victim of this alleged misconduct or any other broker misconduct, please contact one of our securities attorneys in the Morgan & Morgan Business Trial Group.

Backed by the strength of Morgan & Morgan and its more than 700 lawyers and offices across the country, our attorneys in the Business Trial Group battle aggressively against the brokerage firms, investment advisory firms, and banks that caused your investment losses.

Our securities attorneys focus their practice on helping investors recover financial losses on a contingency-fee basis. That means you pay no fees unless we win.