COLUMBIA, S.C. - The South Carolina Department of Consumer Affairs (SCDCA) finalized a settlement with South Carolina attorneys Candy Kern and Howard Sutter III and their affiliated company Upstate Law Group, LLC (ULG). A joint effort with the Consumer Financial Protection Bureau (Bureau) and the Arkansas Attorney General's Office (AKAG), the settlement ends an enforcement action spanning more than two years and requires the defendants to, among other actions, refund $725 thousand to consumers. More than one thousand consumers nationwide entered contracts affected by the settlement. 

SCDCA began investigating Kern, Sutter and ULG in July 2018 after receiving a consumer complaint against ULG. SCDCA, Bureau and AKAG filed a joint complaint in federal court in February 2020 alleging Kern, Sutter and ULG helped broker companies target veterans and other pensioners with high-interest loans. Specifically, Kern, Sutter and ULG aided in creating contracts that were illegal and void based on federal and state law, misrepresenting the type of transaction to consumers and collecting payments from consumers. SCDCA also alleged the attorneys and company engaged in unconscionable debt collection by filing court actions against consumers who took out the loans.

“SCDCA is pleased with the outcome of the case,”said SCDCA Administrator/Consumer Advocate Carri Grube Lybarker. “Candy Kern, Howard Sutter III and Upstate Law Group assisted in duping consumers into illegal high-interest loans and separating military and other consumers from their hard-earned pensions. We appreciate the outstanding work of the Bureau and partnership with the Arkansas Attorney General's Office in this matter.”

Federal law prohibits someone from acquiring the right to receive a veteran's pension payments. South Carolina law prohibits the “sale”or assignment of earnings for payment or security of payment for a consumer loan, regardless of whether the consumer is a veteran. “Earnings”includes periodic payments from a pension, retirement or disability program. The combination of these laws allows for military and non-military consumers in South Carolina and across the nation to benefit from this settlement.

In addition to paying $725 thousand for consumer refunds, the settlement bans Kern, Sutter and ULG from:

1. brokering or offering pension loans in the future,
2. collecting any money related to any pension loans, and
3. offering or providing any financial services in South Carolina unless acting in the regular course of the practice of law.

This action is connected to a 2019 joint complaint filed by the Bureau and SCDCA against Katherine Snyder, Performance Arbitrage Company, Inc. (PAC) and Life Funding Options, Inc. (LFO) and the agencies' investigation of Mark Corbett. Both matters have settled. The settlement filed for Snyder, PAC and LFO is available here. More information on the Corbett settlement is available on the Bureau's website. To date, the Bureau's Civil Penalty Fund has allocated about $9 million to consumers harmed by Corbett's actions. While Kern, Sutter and ULG will be paying $725 thousand under the settlement, additional funds are available to consumers affected via the Bureau's Civil Penalty Fund.

SCDCA will reach out to South Carolina consumers who may be eligible for a refund once the settlement claim process is set up. Details will also be posted on the Bureau's website.

SCDCA encourages consumers to background a business before getting a high cost loan. Consumers should check DCA's website listing of the maximum rate that lenders assessing more than 18% APR can charge. Simply visit www.consumer.sc.gov and click “Licensee Lookup”then “Supervised Lenders”under the “Maximum Interest Rate Schedules”bullet.

About SCDCA

The South Carolina Department of Consumer Affairs aims to protect consumers from inequities in the marketplace through advocacy, complaint mediation, enforcement and education. To file a complaint or get information on consumer issues, visit www.consumer.sc.gov or call toll-free, 1 (800) 922-1594.