MN AG files lawsuit against Future Income Payments

| August 17, 2017 | 19 Comments

MCPO Ret. In TN sends us a link which reports that the Attorney General of Minnesota has filed a lawsuit against Future Income Payments, of Delaware, and FIP, of Nevada which share an address. The company is not licensed to issue loans in Minnesota, but they’ve bilked two veterans and Minnesotans out of thousands of dollars in their business dealing there, according to the AG;

The companies, which are the target of multiple state and federal investigations, issued the loans to veterans who receive pensions or disability benefits and to senior citizens with private-sector pensions. They are part of an industry that has been criticized for a lack of transparency and questionable business practices.

“By signing away your pension rights for years to come, you often end up making a bad financial situation far worse because you are forfeiting the right to have hundreds of dollars of future financial payments,” Minnesota Attorney General Lori Swanson said.

About 55 percent of the companies’ business targeted military pensions.

Apparently, the AG charges that the companies are guilty of evading the law by getting licensed in the state and by calling the loans “purchase agreements” of a pension. That’s why I avoid doing business with people who “target” veterans – they’re likely to use our ignorance of dealings to wipe us out of our life savings.

The two examples they provide;

Gulf War veteran Stephen Schmelz told of getting a $2,700 loan that would cost $27,000 of his pension payments.

[…]

“You’re desperate. You trust them,” said 68-year-old military widow Cecelia Gleb, who borrowed $2,249 and discovered she would be required to pay back $18,000. “You need it and no one else will help you.”

Do the math before you sign.

Category: Veterans in the news

Comments (19)

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  1. Graybeard says:

    Tar (hot), feathers (with mites), rail (with splinters).

    Apply to nekkid scam artists as needed. Repeat as necessary until scamming ceases.

  2. Ex-PH2 says:

    Gee, the payday loan sharks aren’t even close to this dishonest.

  3. Silentium Est Aureum says:

    Reminds me of the TV ads I briefly saw where there were “banks” on Native reservations giving loans out at 85-90 percent interest.

    Or the payday loan places (thankfully mostly gone) where the interest rate could run as high as 500-600 percent.

    Fuck these predators. Scum, all of them.

    • SSG E says:

      A lot of that on the payday loan stuff was nonsense. If you borrowed $150 on Wednesday, you might write a check for $172 that they’d cash a week from Friday. Truth in Lending laws required them to express that $22 fee as an interest rate, so $22 on $150 over 10 days comes to 503%. But if you bounced that check, you know what you’d owe a month later? Not $226 –
      you’d owe $172 (plus a bounced check fee). And if you didn’t pay it for six months? Not $1,762 – you’d owe $172. Don’t pay it for two years, guess how much you owe: not $3.3MM, you’d owe $172, and your effective interest rate is now down below 7%.

      Those 500%+ interest rates were NOT interest rates at all. That was the fee charged for giving you a high-risk loan, that the government required they mislabel as an interest rate.

      Now, folks would indeed get into trouble when they’d start rolling those loans over – can’t pay the $172 on Friday, and some companies would roll it into a fresh loan – now give us a check for $195, we’ll cash it in two weeks and rip up the old one. Two weeks later, we’ll rip up the $195 check, just give us check for $220, etc. THAT’S when those TILA disclosures start approaching the truth.

      I should note as well, when payday loan places go away, that doesn’t take the need away. It just drives folks back to cash advances on credit cards, pawn shops, title loans, loan sharks, etc. – stuff they could have chosen all along instead of going to the payday loan shop. Now they don’t have that choice in many places.

      • Casey says:

        I once made use of a payday loan shop. Needed money to pay for brake service which ended up being way more expensive than expected. That’s what I got for waiting so long to get my brakes fixed.

        I filled out the forms, got the money, got my car back, and paid them back when due. Easy peasy.

        I think SSG E has the right of it. These places are only a bad idea if you can’t control your money. Otherwise they’re a useful place for a quick loan. As Ex-PH2 said, do the math first.

      • Silentium Est Aureum says:

        Bottom line, they prey on the math-impaired /poor financial management/gotta have it now crowd.

        Yeah, they bear some of the blame, but these vultures need a good swift kick in the dink.

        • SSG E says:

          Or, they’re a legitimate business offering a better financial product than credit card advances, pawn shops, loan sharks and title loans, and do-gooders who think they know better than their lessers have largely succeeded in shutting them down.

  4. The Other Whitey says:

    $27 grand for a $2700 loan? Even the Mafia would call that too much!

    Hang these bastards.

  5. Sparks says:

    This is like that “lump sum settlement” clown J.G. Wentworth and his ilk. They will lump sum out you lottery winnings, pension, you name it, and for dimes on the dollar.

  6. CCO says:

    And then there’s a landlady I had once upon a time. Her son died in a plane crash during the war.* Her widowed daughter-in-law took a cash settlement upfront for her portion of the GI Insurance. Mrs. K____ took a check for $44 every month; she lived to be 102.

    *WWII, though with her you had to keep up because she talked about one of her grandfather’s medical school classmates coming to him and demanding his medical instruments, but that was 1865. Her grandfather shamed the man out of it. That was before her time since she was born in 1890 or so.

  7. HMC Ret says:

    They prey upon the most unsophisticated in our nation: the poor and uneducated. I have zero for those who would take advantage of those people.

  8. Casey says:

    These future income payment places remind me of rent to own stores. $22/week sounds cheap for a brand-new Apple or sound system, until you multiply the payment per week by the number of weeks.

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