The Vermont Department of Financial Regulation announced June 9 a settlement agreement with an Illinois-based financial firm for failing to make material disclosures on hundreds of unlicensed loans made in Vermont. Under the settlement 224 Vermonters will receive $191,504 in restitution and the company will also pay a $25,000 administrative penalty to the State of Vermont.
Between May 2017 through December 2018, the company offered a complex financial product known as the “Freedom Plan.” The Freedom Plan was marketed as an employment-based benefit that sought to reimburse unpaid medical expenses through a non-recourse loan that in turn would be paid off with an employee’s pre-tax wages.
“Vermonters deserve fair treatment and honesty in their financial dealings, and in this case, the company put participants at risk by making unlicensed loans and failing to fully disclose potential tax consequences of the Freedom Plan,” said Commissioner Michael Pieciak. “I am glad our department was able to put some money back into Vermonters pockets, which is all the more important during these difficult economic times.”
The company, North American Financial Management LLC, is a Libertyville, Illinois based company that provides corporate tax strategy and employee benefits. Through the Freedom Plan, the company made 285 unlicensed loans to 224 Vermont employees while charging significant administrative fees and failing to provide adequate disclosures about the potential tax implications. North American Financial Management no longer operates in Vermont. If you have a question, concern, or complaint about your finances, contact our consumer hotline at 833-DFR-HOTLINE or by email at firstname.lastname@example.org. Connect with the Vermont Department of Financial Regulation on Twitter, Facebook, and on our website.