Beware of Pension Factoring Ripoffs

I've been a lawyer for 27 years, more than half my live.  I've handled over 100,000 intakes in that time. Recently I was approached regarding a a type of transaction that I had never seen before. It involved pension factoring and a company called Voyager Financial Group, LLC.  Voyager approaches people who need money and have an income stream from a pension fund or something similar, and they offer their services as brokers to get the person cash up front for his or her pension scheme. the pensioner pledges the income from the pension as security for the advance. It seems obvious to me that this is a loan by any other name but so far Voyager and like companies have dodged scrutiny as lenders.  Voyager has run afoul of securities commissioners in several states because Voyager does not put up its own money, it recruits investors to buy the income streams. Because this is passive income for the investor, it is a security and should be registered.

The best mainstream journalistic article that I've seen on the subject is this one from the New York Times.

In the business world, factoring is common. The most common factoring is accounts receivable. Another type of factoring involves payment in advance for structured settlement payments.  The intermediaries in these transactions can potentially rip off both the investors and the person obtaining the lump sum, a/k/a the borrowers.  The implied interest rates in these deals are quite high. From what I've seen the rates exceed the 21% maximum legal rate for mainstream lenders in most states.  It's not such a great deal for the investor, either. The pensioner can actually cut off the stream of income. I think it's arguable whether these contracts are ever legal due to lack of disclosure on the consumer side and lack of registration of the various lenders and intermediaries.

If you have a problem with a pension factoring company, or of you sold pension payments, especially if you are getting collection letters relating to the pension assignment, I am interested in hearing from you. Call me at 317-662-4529. If you are not in my area (Indiana), I will try to link you up with a NACA attorney.  

The FTC SUES MULTIPLE FIRMS FOR FAKE PAYDAY LOANS

What's worse than a payday loan? Not much, but one thing that is worse is a fake payday loan. The FTC has taken action against a group of firms they say bilked consumers out of tens of millions of dollars by putting through electronic funds transfer requests for payments on loans that never existed. The companies allegedly used personal information gathered by sneaky means to drain the bank accounts of  its victims.

I ran into a couple of instances of fake payday loans when I worked for UAW Legal Services. It wasn't the scam artists that troubled me the most in these cases, it was the banks who refused to follow proper procedures when customers made claims of unauthorized withdrawals.  If you find that your bank account has been tapped to pay for payday loans real or fake without authorization, I suggest that you start taking steps to close your account.  Once they have your information, they can start fake transfer requests again using multiple corporate identities.   Below are the company names listed in the FTC press release. There could be many more.

The complaint announced today was filed against: 1) CWB Services, LLC; 2) Orion Services, LLC; 3) Sand Point Capital, LLC; 4) Sandpoint, LLC; 5) Basseterre Capital, LLC (based in both Nevis and Delaware); 6) Namakan Capital, LLC; 7) Vandelier Group, LLC; 8) St. Armands Group, LLC; 9) Anasazi Group, LLC; 10) Anasazi Services, LLC; 11) Longboat Group, LLC, also doing business as (d/b/a) Cutter Group; 12) Oread Group, LLC, also d/b/a Mass Street Group; 13) Timothy A. Coppinger, individually and as a principal of one or more of the corporate defendants; and 14) Frampton T. Rowland, III, individually and as a principal of one or more of the corporate defendants.

UAW Legal Services Plans - Not Dead Yet

For many years, I was a staff attorney with UAW Legal Services Plans (UAWLSP) in Indianapolis. The legal services benefit was a casualty of the bargaining process in the last contract between the automakers and the UAW. UAWLSP stopped taking new cases at the end of 2013 and has been closing cases and phasing out operations ever since. The website at www.uawlsp.com has apparently not been updated since sometime in 2013. Unfortunately, this means that plan members have no easy way of finding out the status of their local legal services office, and they may not know what happened to their files and the attorneys who served them for many years.  The last thing that I heard is that UAWLSP will continue in at least nominal existence through at least part of 2015, but some local offices may be closed in the meantime.  If you are looking for an ex-UAW Legal Services (ex-UAWLSP) attorney, even if you are outside of my area, send me an email through my webpage at www.hoferlawindy.com, and I will either try to find your old attorney or find you a new attorney through my contacts at the National Association of Consumer Advocates.  

IF YOU ARE A FORMER UAWLSP ATTORNEY AND YOU HAVE JOINED A NEW LAW FIRM OR STARTED YOUR OWN PRACTICE, PLEASE POST A COMMENT IN THE SPACE BELOW INCLUDING YOUR NAME, OFFICE ADDRESS, PHONE, WEBSITE URL, AND ANYTHING ELSE YOU WANT THE PUBLIC TO KNOW. I will be happy to link blogs with you.  Gee, that sounds kind of dirty.

(Note to the Python folks. Don't sue me for using the picture, just tell me to take it down if it bothers you.  I've spent a lot of money on Python stuff. Be nice to me.)