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Be Cautious Of Pension Advances

Michael Agruss

Written and Reviewed by Michael Agruss

  • Managing Partner and Personal Injury Lawyer at Mike Agruss Law.
  • Over 20 years of experience in Personal Injury.
  • Over 8000+ consumer rights cases settled.
  • Graduated from the University of Illinois Chicago School of Law: Juris Doctor, 2004.

Pension advances are a big business, comprised mostly of preying on retirees hard up for cash. Pension advance companies sell loans, not advances, made against people’s pensions—and they’re having terrible financial consequences for an increasing number of aging Americans. Marketed as advances, they are carefully disguised loans that force borrowers to sign over all or part of their monthly pension checks, with usurious interest rates much higher than credit cards. So-called pension advance lenders actively pursue people with public pensions (teachers, police officers, veterans, firefighters, etc), through ads on the internet and in local circulars. These companies operate mainly beyond the reach of state and federal banking regulations, but they’re now being scrutinized by the Consumer Financial Protection Bureau, and some members of Congress. The New York Times broke this story, and reviewed over two dozen contracts for pension-based loans; after accounting for multiple fees, the effective interest rates ranged from 27 percent to 106 percent — which was not disclosed in the ads or in the contracts themselves. A Marine veteran from Snellville, Ga., Ronald E. Govan, paid an interest rate of more than 36 percent on a pension-based loan. He told the Times he was enraged that veterans were being targeted by the firm Pensions, Annuities & Settlements, which did not return the paper’s calls for comment. “I served for this country,” said Mr. Govan, a Vietnam veteran, “and this is what I get in return.”It’s hard to know exactly how many financially struggling people have taken out pension loans, but legal aid offices in Arizona, California, Florida, and New York say they have recently met with a surge in complaints from retirees having trouble with these loans. Older Americans are taking on debt faster than any other age group; in households headed by people, 65 and older, median debt levels have risen more than 50% in the last decade, from $12,000 in 2000 to $26,000 in 2011. If a collection agency has harassed you, you may be entitled to money damages up to $1,000.00, based on the FDCPA, which has been around for almost 35 years. The FDCPA is a federal law that applies to every state. In other words, everyone is protected by the FDCPA. The FDCPA is essentially a laundry list of what debt collectors can and cannot do while collecting a debt, as well as things debt collectors must do while collecting a debt. Plus, the FDCPA has a fee-shift provision. This means the collection agency pays your attorney’s fees and costs. Founding attorney, Michael Agruss, has settled over 1,500 debt collection harassment cases. We want to help you, too. 

Submitted Comments

Donald Ruvkun
9 years ago
I have seen the suite against pension settlements and annuities llc and I received a call from a law office that represents them and they left a message yesterday for me to contact them ASAP I don't know what to do I know the state of WA won a class action suite against them. I don't know if I call them back or not they have a new.name.now.
Graham
7 years ago
i was reading an article on your site about a lawsuit that was in progress and i am in the same situation as the plaintiff in the lawsuit and i was wondering if you were the firm that was handling this lawsuit. Well I have an advance/loan on my VA Disability from a company called Pensions Annuities and Investments. I was informed later on that the loan may have been Illegal and I started doing some research and I found this lawsuit. I borrowes 10k and with 5 year payments i pay back something like 46k borowed!

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