More on Voyager Financial Group (VFG) and Assignment of Military Pensions

Since I initially posted about Voyager Financial Group. I've received multiple calls from people who assigned military pensions.  It is illegal for enlisted military members to assign pensions under 37 U.S.C. 701.  (Commissioned officers may assign pensions up to certain limits.) 38 U.S.C. 5301 contains limits on assignability of V.A. pensions.

It appears that there are class action law firms that are after the pension factoring companies making allegations that when the factoring firm sells (or places) the pension assignment with an investor, that is an unlicensed/unregistered security.  That's great but it doesn't help the individual retiree who's income has been cut drastically by the pension assignment and doesn't have enough money left to pay his/her bills.  I've been evaluating these cases based upon the legality of the underlying agreement as a matter of state law, and I make an individual determination about whether the pensioner can stop the assignment as a matter of right.  After the assignment has been stopped, I use the Fair Debt Collection Practices Act as a shield and a sword against collectors.   If you are outside of Indiana, contact me anyway through my website www.hoferlawindy.com, and I will try to link you up with a NACA consumer attorney.

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.