In Washington, Pennsylvania Congressman Matt Cartwright introduced legislation aimed at protecting federal and military retirees. Congressman Cartwright told us his legislation would close loopholes in federal law. He said it “. . . expands Truth In Lending Act provisions to any situation where a federal or military pension is used as a consideration for an advance.” The bill also sets the interest rate for these loans at 6 percent and it would allow people who find themselves in illegal deals to sue.
That’s another wrinkle. Contracts like the one Darren signed specifically say that you can’t sue to get out of the contract or join a class action lawsuit to recover damages. “It makes it very difficult for them to bring a claim for fraud,” Florida attorney Silver said.
Darren filed complaints with the California attorney general and the federal Consumer Financial Protection Bureau (CFPB). Neither would comment about Darren’s case. But a spokesperson for the CFPB said the bureau is monitoring the advance pension issue.
We called and emailed Pensions Annuities & Settlements LLC. The person who answered the phone asked me to direct the emails to someone at LumpSum Pension Advance. So far, we haven’t heard a thing.
In the meantime, Darren has little recourse. He said callers representing Pensions Annuities & Settlements LLC told him the company would take him to court if he didn’t keep up his payments.
Until there are regulations to curb the industry, National Consumer Law Center’s Stuart Rossman advises, “If you need to borrow money you will be much better off going to a community savings and loan or cooperative. You’ll get a much better deal.”