Retirees Beware: Cash for Pension Scam Hits North Carolina
contact the office of the north carolina attorney general if you've encountered this scam
If you're a retiree receiving a pension, beware of a new scam: offers that claim to let you borrow against your pension without actually taking out a loan.
what's the catch?
Pension advance companies promise retirees quick access to cash. The catch? You're signing over the rights to your pension— often for years.
The North Carolina Attorney General's Office reports that they have received a number of recent complaints from consumers about pension advance companies. These companies disguise high-interest rate loans as pension advances, with fees and interest rates often exceeding 100 percent of the amount borrowed. One military retiree received an "advance" of $10,000 but must pay back more than $25,000 thousand from his future pension payments.
what's the damage?
This scam can have long-lasting effects on retirees' finances and plunge them further into debt. To evade laws designed to protect pensions, pension advance companies often require retirees to set up separate bank accounts, which the company then controls. The company then collects payments and fees from the account for several years.
Favorite targets of the scam include military veterans, retired teachers, firefighters and police, as well as other retirees with a pension income.
Protect your hard-earned pension. Don't sign over your pension rights without first obtaining legal or financial advice from an independent professional.
what can i do?
If you're being pressured to sign for a pension advance loan or have signed up for one, report it to the North Carolina Attorney General's Office.