RICHMOND, Va. (WRIC) — It’s National Consumer Protection Week and Attorney General Mark Herring is going after a company he believes is targeting elderly veterans and retired state employees because of their pensions.
“Overall we’ve been able to identify about 950 transactions involving about 650 Virginia consumers,” said Herring.
He filed a lawsuit alleging Future Income Payments, LLC (FIP) and its owner made illegal loans carrying annual interest rates as high as 183 percent. The suit also accuses the company of lending practices that violated the Virginia Consumer Protection Act by misrepresenting that it was “buying” portions of Virginia pensioners’ monthly pension payments, when it was actually making high-cost installment loans.
“These companies and their owner took advantage of Virginians who earned their pensions through years of dedication to our nation’s armed forces and as civil servants. These men and women served our Commonwealth and our country, and they deserve better than to have their life savings drained by an illegal, but cleverly disguised, predatory loan,” said Herring. “By disguising their loans as sales, these companies tried to get around important laws that protect seniors and retirees on fixed-incomes from financial exploitation.”
Herring said one veteran who received a $5,500 loan was required to pay more than $40,000 over five years — more than 10 times Virginia’s 12% interest cap on installment loans.
“Can you imagine, if they are already having difficulty getting by, they’re on a fixed income, having to come up with that kind of money month after month?” said Herring.
On its website, FIP writes that it “leads the nation in creative pension financing options.” The site also says pension advances are “not currently available for purchase from sellers” in 17 states, including Virginia.
Herring’s suit seeks restitution and loan forgiveness for the hundreds of Virginia pensioners impacted.
It was filed in the Circuit Court for the City of Hampton by attorneys in the Predatory Lending Unit of Herring’s Consumer Protection Section.
“I hope it sends a message to everyone out there — if they’re going to come in to Virginia and do business, they need to treat people fairly and follow the law,” said Herring. “We have provided the company an opportunity to come in and share with us information they may have that they believe shows they didn’t violate the law but they have chosen not to do that.”
We called FIP to get its take on the lawsuit. We were told someone would get back to us. We have not received a response at this time.
“It’s really important for consumers to let us know if they feel they’ve been taken advantage of. The sooner we find out about it, the more likelihood we have of being able to get their money back, and the greater the likelihood we’ll be ale to stop fraudulent or misleading conduct so that other consumers aren’t taken advantage of,” said Herring.