Future Income Payments | What Happened?

Future Income Payments (“FIP”), aka Pensions, Annuities, and Settlements, LLC engaged in transactions with pensioners that are classified as loans; these loans violate multiple (if not most) state laws governing loans, as well as state regulations on loan interest rates. Thus, FIP had to cease and desist from receiving or collecting amounts under the existing contracts.

Future Income Payments contracted with people who receive periodic payments from a military, governmental, or private pension or similar benefit program. The contracts were titled “Asset Purchase Agreements.” Under the contracts, FIP provides a one-time lump sum payment (less their fees) in exchange for FIP’s “purchase” of a portion of the “income stream” from the person’s periodic benefit payment. The amounts of the contracts and some of the specific terms of the individual contracts vary, but the core terms are similar throughout. Under the contracts, the individual’s monthly payment obligation is tied to their receipt of the anticipated periodic benefit payments. The contractual payment obligations greatly exceed the original “purchase price.”


For example, in one of the “Purchase Agreements” FIP entered with a veteran, FIP made a one-time payment of $1,500 ($1,800 purchase price minus a $300 “set-up-fee”) in exchange for future payments to FIP of $300 per month for five years upon the veteran’s receipt of his pension benefit payments. The contract provides for the veteran to pay FIP $18,000 over the five-year term, which is more than 10 times the initial payment.


States across the country argued that, regardless of the name, the transactions are actually “loans” and must comply with state laws governing loans, licensing of businesses engaged in the provision of loans and the state’s usury laws. Specifically, the states assert that FIP was engaged in unlicensed lending; that FIP charged unauthorized fees; and that the terms of FIP’s loans violate the usury caps on interest (typically around 12%).


According to one of FIP’s websites, they solicit veterans, spouses of veterans and those receiving pension payments to enter into agreements with FIP. FIP is not licensed to make loans. The FIP contracts are linked to the pensioner’s receipt of periodic benefit payments. The FIP contracts are linked to the customer’s receipt of monthly pension or military disability payments. A significant majority of the contracts are tied to pensioners’ receipt of federal or state pension or benefit payments. According to one lawsuit by the State of Minnesota vs. Future Income Payments, 122 FIP contracts were examined:

60 of the contracts are based on payments from the Department of Veterans Affairs

7 of the contracts are based on payments from the Department of Defense

17 of the contracts are based on State Government Pension Plans

4-9 of the contracts are based on and/or connected to Federal Government Pensions

29-31 of the FIP agreements are based on Private Pension Plans; and

3 of the FIP agreements were listed as “other” by the State.

The FIP contracts with pensioners contain language that acknowledges the consumer receives fixed periodic payments from a pension or similar benefit program. The contracts declare the income stream to the consumer as an “asset” and provide that FIP is “purchasing” from the consumer “some or all of the monthly payments.”


Under the vast majority of contracts, FIP’s payment to pensioners is $5,000 or less. The most common APR is 200% and the average APR is 139%.  The Court in Minnesota reviewed affidavits and deposition testimony from Minnesota pensioners and made the following findings regarding FIP’s transactions.

Many if not most of the consumers with whom FIP seeks out for contracts are vulnerable in some manner. Many are seniors receiving retirement income through pension programs. Many receive income based on disability. Some appear particularly vulnerable to persuasion. The individuals sought by FIP also tend to be financially vulnerable. The pension or other periodic payment benefit that is subject of the FIP contracts is often, along with social security benefits, the primary or only income available to the pensioner.

FIP claims to be “the industry leader and an innovator in buying and selling secondary market pension cash flows often referred to as Structured Cash Flows.” However, state officials in multiple states have issued cease and desist orders, accusing FIP of issuing loans without a license and disguising them in “sales agreements.” Since March, it appears as FIP is no longer collecting payments, receiving payments, or answering their phones.


Peiffer Wolf is currently investigating claims for anyone who has invested in Future Income Payments. If you or someone you know invested in FIP, Contact Us Today by calling 504-523-2434 or by filling out an online Contact Form for a FREE Consultation. Concerns about possible broker misconduct and investment fraud are serious, and we are committed to fighting on behalf of investors.

Lawsuits Mount Against FIP for Illegal High-Interest Loan Scheme


Embattled Future Income Payments, LLC continues to be sued for an illegal high-interest loan scheme that targeted the pensions of retired veterans and public servants.


Future Income Payments (“FIP”) targeted pensioners — often elderly veterans with military pensions and public servants with pensions — with illegal loans disguised as “sales” that could provide purchasers with a quick lump sum of cash, according to one lawsuit.


In most cases, pensioners thought they were making a sale of a portion of their pension, which is an asset, in a one-time transaction. As it turned out, it was a loan against the pension with payback “interest rates that were sky high,” said Michael Kelly, spokesman for the Virginia Office of the Attorney General.

The high-interest loans carried rates as high as 183 percent,

which far exceeds the applicable 12 percent annual interest cap mandated by State law, according to one complaint. Thus, it is alleged that FIP engaged in lending practices that violated State Consumer Protection Acts.


“These companies and their owner took advantage of [consumers] who earned their pensions through years of dedication to our nation’s armed forces and as civil servants,” one Attorney General said in a statement. “We’re going to do everything we can to get veterans and other retirees their money back, and to wipe out the debt remaining on any illegal loans.”

These men and women served (our country), and they deserve better than to have their life savings drained by an illegal, but cleverly disguised, predatory loan.
Future Income Payments Lawsuit

“There was No Guarantee Purchaser would Receive All Payments” – FIP’s CEO

According to Future Income Payments (“FIP”) CEO, Scott Kohn, FIP is in the process of agreeing to cease and desist orders or has already entered cease and desist orders in the States listed below.

States/Jurisdictions Where FIP Entered into Cease and Desist Orders






North Carolina

New York



States/Jurisdictions with Pending Agency Action or Investigation











West Virginia


South Carolina




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Peiffer Wolf Carr Kane Conway & Wise and Rikard & Protopapas are currently investigating claims for anyone who has invested in Future Income Payments (FIP, LLC). If you or someone you know invested in a Structured Cash Flow like Future Income Payments, Contact Us Today by calling 504-523-2434 or by filling out an online Contact Form for a FREE Consultation. Concerns about possible broker misconduct and investment fraud are serious, and we are committed to fighting on behalf of investors.

Structured Cash Flows | Future Income Payments


Structured Cash Flows, or Pension Viaticals, are recommended and promoted to investors as being preferable to traditional life settlements. The sales pitch is that Structured Cash Flows investors begin to receive a return on their investment prior to the death of the seller.


With the purchase of a structured settlement, investors pay a lump sum in exchange for the assignment of the right to collect payments due to the seller under a pension, disability plan, or other employee and government benefit programs. Thus, the investor plans to receive continued payments for the life of the seller, the seller gets an upfront lump sum payment, and the middleman (FIP) gets a fee on the transaction.


Most pension plans are subject to the Employee Retirement Income Security Act of 1974 (ERISA). ERISA is the federal law that sets the standards and regulates pension plans. However, this federal law prohibits many pensions and benefits from being assigned.


Therefore, many of the sellers of pension plans receive the lump sum and continue to collect the pension payments, claiming that the agreement with the investor violates ERISA. However, the middleman (FIP) still gets the upfront fee and the investor is left holding the bag.

Attorney Generals Suing Future Income Payments


Multiple Attorney Generals from around the country are suing Future Income Payments LLC (“FIP”), a Nevada company, alleging that it targeted elderly veterans and retired civil servants in a scheme that masquerades high-interest predatory loans as “pension sales,” according to one lawsuit filed in Virginia’s Hampton Circuit Court.


These lawsuits seek relief for “some of the most vulnerable” consumers who were “forced by financial distress to take out a loan.” Those people have been solicited by FIP since at least June 2011.


Many of the lawsuits also name FIP owner Scott Kohn individually. These lawsuits allege that FIP violated state and federal consumer protection laws while using language misrepresenting its actions to disguise its tactics.


In one exhibit, a veteran agreed to “purchase,” or borrow, $5,500 – which included a $300 “set up” fee. In return, the veteran agreed to “sell,” or repay, $682 monthly for five years. In total, the veteran agreed to repay FIP $35,420 for a loan of $5,200, for an annual percentage rate of 137 percent. Many states have an APR interest cap on installment loans of 12 percent.


FIP has faced scrutiny and multiple lawsuits in the past. However, it appears that FIP’s conduct has continued over the years.

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If you believe you were a victim of predatory lending, investment fraud, or broker misconduct, it is imperative to take action. Peiffer Wolf Carr Kane Conway & Wise and Rikard & Protopapas have represented thousands of victims, and we remain committed to fighting on behalf of investors.


Contact Peiffer Wolf Carr Kane Conway & Wise and Rikard & Protopapas today by filling out a Contact Form on our website or by calling 504-523-2434 to schedule a FREE Case Evaluation.

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