Regulators: Pension Advance Companies Deceived Veterans

A lawsuit filed Thursday by state and federal regulators against two pension advance companies alleges that the online services misled military veterans and others by duping them into borrowing against their pensions.

The lump-sum cash advances that retirees received in exchange for pension payments were in fact loans that carried high interest rates of as much as 28 percent and other hidden fees, the lawsuit against the California-based companies, Pension Funding LLC and Pension Income LLC, alleges.

The Consumer Financial Protection Bureau (CFPB) and the New York State Department of Financial Services filed the lawsuit. It alleges that, from 2011 until about December 2014, the companies offered consumers lump-sum cash advances for agreeing to redirect all or part of their pension payments over a period of eight years.

In May, the CFPB warned that “…it’s illegal for lenders to take a military pension or veterans’ benefits.” The lawsuit seeks to recoup monetary losses for those who were duped into taking out the loans.

Find more of our coverage on loans and vets here.