Consumer Financial Protection Bureau (CFPB) Sues Pension “Advance” Firms Over Deceptive Practices
Online ads offering advance payment on future pension income may have seemed like a financial lifeline for some senior retirees and military veterans. But a lawsuit filed Thursday by federal and state regulators charges that the offers by California-based Pension Funding LLC and Pension Income LLC in reality came with high interest rates — a detail not disclosed to customers. The federal court action filed by the U.S. Consumer Financial Protection Bureau and the New York State Department of Financial Services accused the firms and present or former executives Steven Covey, Edwin Lichtig, and Rex Hofelter of deceiving consumers by characterizing the transactions as advances, not loans. “These companies duped consumers into taking out pension loans by deceiving them about the terms of the deal,” CFPB Director Richard Cordray said. “We are working to put a stop to the illegal practices these companies are using to sell their bogus product to military veterans and other pensioners.” The companies paid to steer Internet search traffic to their websites by targeting consumers who conducted Google browser searches for such phrases as “pension loan” or “sell my pension,” the lawsuit charged.
Source/more: USA Today
David Wingate is an elder law attorney who practices in Frederick and Montgomery Counties, Maryland. The elder law practice consists of wills, trusts, powers of attorneys, asset protection, and Medicaid planning.