“The companies that target veterans for these illegal transactions are elusive; they change names and websites frequently and hide the identities of the individuals involved, Rossman said.
It is illegal for the pension benefits of military retirees to be assigned to others, but federal courts have differed on whether pension advances are “assignments.”
Rossman noted one reason pension advance companies try to avoid characterizing themselves as lenders is to avoid usury law interest limits and because the obligations of a borrower to a lender can be eliminated in a bankruptcy, while a bankruptcy requires a person who gets an advance to pay the money bank.
He said most pension advances average $50,000, while other predatory loans are about one-tenth of that.
Sen. Elizabeth Warren (D-Mass.) said pension advances should be stopped.