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Pension Factoring Likened To Payday Loans ‘In Sheep’s Clothing’

Pension Factoring Likened To Payday Loans ‘In Sheep’s Clothing’

Yet another story about pension advances, from earlier this year, began this way: “Pension advances, also called pension sales or pension buyouts, are also being called ‘pay day loans in sheep’s clothing’ and are the latest scam to hit retirees.” That’s from an article from moneynews.com.  The article, entitled “Pension Advances Nothing More than Payday Loans in Sheep’s Clothing“, is available here. Some earlier Secondary Insurance Market Blog posts on pension factoring are collected at this post.

Pension-Advance Companies? Beware, Says Article

Pension-Advance Companies? Beware, Says Article

“[P]otential threats to older Americans’ financial security can come in the form of financial products that are risky, expensive, and inappropriate for thei needs.  For example, there are companies that target retirees who may need access to cash by offering them lump sum ‘advances’ on their pension payments.  These so-called advances are reported to carry interest rates from 27 to 106 percent, threatening many older borrowers’ safe retirement. Pension advance firms have been targeting military veterans, and reportedly have recently…

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Army Times Article: Pension Advances Pose Problems For Veterans

Army Times Article: Pension Advances Pose Problems For Veterans

A recent news story in The Army  Times and that ran in other military news outlets contained some criticism of some “pension factoring” or “pension advance” businesses. The story, headlined “Shady Lenders Still Pose Problems For Troops, Veterans”, says that “[d]espite improvements in enforcement of consumer protection laws and education for service members and veterans, problems persist with loans, veterans’ benefits and retired pay and pensions, according to witnesses testifying July 31 before the Senate Veterans’ Affairs Committee.” The witnesses…

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More About Missouri Officials’ Investigation Of Pension Advances

More About Missouri Officials’ Investigation Of Pension Advances

Besides the story that was the subject of this post, there have been more items in media and other outlets about the investigation by Missouri officials into pension advance companies.  Here are some more links: Missouri Treasurer Wants To Ban ‘Pension Advances’ (St. Louis Today) Zweifel Anounces Concerns About Pension Advances, Asks For Help From Koster, Legislature (Missouri Times) And the Missouri Treasurer web site also has a press release on the topic here.

Missouri Officials Investigating Pension Factoring, Says Newspaper

Missouri Officials Investigating Pension Factoring, Says Newspaper

The Kansas City Star newspaper reports that “Missouri Regulators Investigate Pension Advance Firms That Prey On Retirees.”  The full story is available here. Some of the previous Secondary Insurance Market Blog posts about state or federal officials investigating pension advance or pension factoring are available here and here and here and here and  here.

‘Pension Advance’ Company Practices Among Those Posing Problems For Veterans, According To News Story About Senate Testimony

‘Pension Advance’ Company Practices Among Those Posing Problems For Veterans, According To News Story About Senate Testimony

“Despite improvements in enforcement of consumer protection laws and education for service members and veterans, problems persist with loans, veterans’ benefits and retired pay and pensions, according to witnesses testifying July 31 before the Senate Veterans’ Affairs Committee.” That’s the beginning of a news story in a recent story in the Army Times that discussed, among other things, problems posed by pension factoring (or “pension advance”) practices. The full story is available here.

Some Words Of Caution From LifeHealthPro About ‘Pension-Advance’ Firms That Are Under Investigation For Allegedly Deceptive Practices

Some Words Of Caution From LifeHealthPro About ‘Pension-Advance’ Firms That Are Under Investigation For Allegedly Deceptive Practices

LifeHealthPro.com recently reported on pension factoring, and offers some words of caution. Says LifeHealthPro: Millions of seniors today are strapped for income because traditional interest-bearing investments are paying historically low rates.  So it’s no surprise those with pensions are attracted to novel arrangements for converting future payments into current lump sums.  The problem is, government regulators are not investigating so-called ‘pension-advance’ firms for allegedly deceptive practices that target seniors, military veterans and others with structured settlements. This may not make…

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One Story Of The Real Life Impact Of A Pension Factoring Deal

One Story Of The Real Life Impact Of A Pension Factoring Deal

Pension factoring deals – also sometimes called pension loans or pension advances – have garnered attention from the SEC, FINRA, state attorney generals and other officials this year.  Many publications have also run stories about these types of transactions, such as those described in previous posts here and here. But missing from some of the stories is the real life impact on individuals whose lives have been impacted by pension factoring deals. The Center for Public Integrity, nearly two years…

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Article: Pension Factoring Contracts Are ‘Illegal and Unenforceable’

Article: Pension Factoring Contracts Are ‘Illegal and Unenforceable’

“Investors Who ‘Buy’ Pensions Are Buying Trouble” That’s the headline on a Forbes article from 2012 about pension factoring. Among other points made in the article is the following: The contracts with pensioners . . . are, according to legal experts and a growing number of judges, illegal and unenforceable.  Federal laws clearly prohibit military retirees from assigning their pensions and the Internal Revenue Service code that covers private pensions also prohibits the practice. “These are inalienable rights,” says Eric…

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Article Describes ‘The Dangers Of Too Much Liquidity’ – And ‘Commitment Devices’ That Might Lead To Favorable Circumstances

Article Describes ‘The Dangers Of Too Much Liquidity’ – And ‘Commitment Devices’ That Might Lead To Favorable Circumstances

A few months ago, Research magazine published an article by Michael Finke, of Texas Tech, called ‘The Dangers Of Too Much Liquidity.”  The article describes the tendency of individuals to want liquidity, recent research that shows how individuals frequently spend money when it is available, and that taking steps to make assets illiquid can increase individual happiness.  Such steps are called “commitment devices”, according to Finke, and they can help individuals ensure that investments remain investments, and provide the desired,…

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