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Suit Aims to Help Lead Paint Victims

Monday, November 28, 2016

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A national structured-settlement-factoring company has once again been accused of swindling lead-based paint poisoning victims into signing away future settlements in exchange for significantly lower lump-sum payouts.

This time, Access Funding LLC (Chevy Chase, MD) and other affiliated companies and individuals have been sued in federal court by the Consumer Financial Protection Bureau, a federal financial oversight agency. The suit, filed Nov. 21, alleges violations of the Consumer Financial Protection Act of 2010.

lead paint window
© iStock.com / 22kay22

Exposure to lead can cause lowered intelligence, reading and learning disabilities, impaired hearing, reduced attention span, hyperactivity and behavior problems, according to the EPA.

According to an announcement on the case, the CFPB alleges that Access Funding steered victims to receive “independent advice” from a sham advisor, an attorney who was actually paid directly by the company and indicated to consumers that the transactions required little scrutiny.

Seeking Relief

“Many of these struggling consumers were victimized first by toxic lead, and second by a company that saw them as little more than income streams to be courted and harvested,” said CFPB Director Richard Cordray.

The case follows a similar lawsuit filed earlier this year by the Maryland Attorney General. That case alleged that the company was engaged in unfair and deceptive practices in violation of the Maryland Consumer Protection Act. That case is pending.

In its suit, the CFPB seeks to put an end to the company’s unlawful practices, obtain relief for the harmed consumers, and impose penalties.

Maryland in general, and Baltimore in particular, have been at the epicenter of lead-paint litigation in the U.S., with a numerous multimillion-dollar verdicts returned over lead paint in Baltimore City rental properties.

Defendants and Allegations

The CFPB suit names the following as defendants:

  • Access Funding LLC;
  • Access’ successor company, Reliance Funding;
  • Michael Borkowski, CEO of Access Funding;
  • Raffi Boghosian, Chief Operating Officer of Access Funding;
  • Lee Jundanian, CEO of Access Funding from February 2013 to May 2014; and
  • Charles Smith, a Maryland-based attorney.

Access Funding conducted approximately 70 percent of its settlement transfers in Maryland, the complaint said. It sought court approval for approximately 200 transfers in Maryland from 2013 to 2015, of which at least 158 were approved.

judge
© iStock.com / AndreyPopov

Access Funding has previously called such allegations “scurrilous” and “incorrect,” noting that disclosures and voluntary sales were approved by courts.

The complaint says the company offered consumers about 30 percent of the present value of their future payments.The settlement payments are intended to help compensate victims who are unable to work because of exposure of lead-based paint as children.

Targeting the Impaired

The CFPB alleges that Access Funding knew that many of the consumers it targeted had significant cognitive impairments from lead-based paint poisoning.

The complaint alleges that the defendants violated prohibitions on unfair, deceptive, and abusive acts and practices.

Specifically, the CFPB alleges the defendants:

  • Steered consumers to a sham advisor: The CFPB alleges that Access Funding steered Maryland consumers to a single attorney, Smith, who purported to act as the “independent professional advisor” for almost all of its Maryland transactions. The complaint alleges that Smith represented to consumers that he was providing independent advice, but in fact he provided virtually no advice to consumers, and was paid directly by Access Funding.
     
  • Exploited consumers’ confusion to keep deals on track: Access Funding also allegedly offered cash advances to consumers who were awaiting approval of structured-settlement transfers. The company falsely represented to those consumers that they were obligated to proceed with the transactions after receiving the advances, even if the consumer realized it was not in their best interest. These consumers included many with cognitive impairments. The CFPB alleges that the advances did not bind consumers to complete the transactions, and the company and other defendants took advantage of consumers’ lack of understanding of that fact.

The CFPB notes that its complaint is not a finding or ruling that the defendants have actually violated the law.

Access Funding did not respond to a request for comment on the case. It has previously called such allegations “scurrilous” and “incorrect,” noting that disclosures and voluntary sales were approved by courts.

The lawsuit comes at a "politically sensitive time" for the agency, the Baltimore Sun reports, noting that the bureau was created by the 2010 Dodd-Frank Wall Street law, which has drawn fire from President-elect Donald Trump.

   

Tagged categories: Government; Health and safety; Laws and litigation; Lawsuits; Lead; Lead; Maintenance coating work

Comment from Jesse Melton, (11/28/2016, 8:48 AM)

There's no doubt the firm was up to no good, the double hyphenated business descriptor gives it away. For commercial purposes more than one hyphen is a placeholder for other terms that'll be stuck in there later to make things more confusing for juries. Plurality of hyphenation also indicates extremely dense jargon that is reused with variable definitions in each hyphen delineated term.


Comment from peter gibson, (11/28/2016, 10:22 AM)

Thats right...watch out for all those hyphens. Trickery I say!


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