North Carolina Attorney General Orders Pension Advance Company to Refund Consumers

The California-based firm charged consumers up to 137.5 percent interest

North Carolina Attorney General Orders Pension Advance Company to Refund Consumers
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June 15, 2016

North Carolina Attorney General Roy Cooper has ordered a California-based pension advance company to make restitution to North Carolina consumers that were subject to unfair interest rates.

Under a settlement won by the North Carolina Attorney General's Office, Future Income Payments (FIP) must pay refunds to consumers and penalties to the state, in addition to cutting its interest rate from as high as 137.5 percent. Under North Carolina law, rates on cash loans are capped at 30 percent for licensed lenders and at 16 percent for unlicensed lenders like FIP.

"People who've worked hard their whole careers don't deserve to have their pensions drained by misleading cash advances," Cooper said in a written statement. "Outrageous interest rates are illegal in North Carolina, and my office is here to enforce the law on behalf of consumers."

At least 195 North Carolina consumers took out pension advances from FIP. The company reportedly targeted retired military veterans, government workers, and corporate employees who were more likely to have pensions.

Multiple affidavits filed by consumers alleged financial hardship as a result of the company's practices. An Air Force retiree in Gastonia, NC became unable to pay rent on his apartment after taking out a pension advance from FIP because of the reduction in his monthly pension income. According to his complaint, an FIP representative offered the consumer three times more cash than he needed and ultimately took out a $3,000 pension advance with a sky-high effective interest rate of 137.5 percent.

In addition to lowering interest rates and paying refunds to consumers, FIP will pay $59,900 in civil penalties to North Carolina public schools and $50,000 to cover the costs of the state's investigation.

To file a consumer complaint about a pension advance company or to learn more about the FIP settlement, contact the North Carolina Attorney General's Office.