Katharine Snyder, Performance Arbitrage Company, Inc., and Life Funding Options, Inc.
On October 1, 2019, the Consumer Financial Protection Bureau (Bureau) and the South Carolina Department of Consumer Affairs (South Carolina) 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 alleged that the companies and their owner violated the Consumer Financial Protection Act’s prohibition against deceptive acts or practices. The Bureau and South Carolina specifically alleged 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; misrepresented to consumers that the product is a sale of payments and not a high-interest credit offer; and failed to inform consumers of the products’ interest rates. The Bureau’s investigation was conducted in partnership with South Carolina.
In May 2020, Snyder was discharged from bankruptcy in the U.S. Bankruptcy Court of the Eastern District of Texas. On November 12, 2020, the federal district court in the District of South Carolina approved a stipulated final judgment resolving the claims against Snyder and her companies. The judgment permanently bans Snyder and her companies from collecting money from affected consumers and from providing any other consumer-financial products or services. The judgment requires Snyder to pay a civil money penalty of $500 to the Bureau and $500 to South Carolina.