Here’s a brain teaser for all you mathletes out there:
Ricky is an Army vet whose 30% disability rating from the VA brings in more than $500 a month. A finance company makes him an offer: If he forks over his check for the next decade, they’ll send him a one-time lump payment of $20,000 — more than enough to purchase a set of 20-inch rims for the ol’ Charger.
Question: Should he go full-bling with the bronze gold, or play it Batman style with an elegant matte black?
Okay, pencils down.
We hope it goes without saying that Ricky is making a big mistake. In a case now underway in a U.S. district court in South Carolina, three veterans who signed similar arrangements are suing their loan agents, claiming that they were charged unfair interest rates, that the contracts did not disclose the rates as required, and that the deals violate federal law.
“We have reason to believe there are hundreds, perhaps thousands of veterans who have been fleeced by the defendants through similar schemes over the past six-plus years,” Adelaide Anderson, a staff attorney with Public Counsel, part of the plaintiffs’ legal team, said when the suit was filed last year. Indeed, state investigators in Arkansas found that during an 18-month period beginning in 2011, one company made more than 300 such deals with veterans, for a total of more than $34 million.
As a no-longer-active website touting the scheme put it: “Nowhere else can you leverage your military… pension by exchanging a future trickle of income for cold, hard cash in your hands today.”
Jason Lyons, a former Marine Corps staff sergeant who’s now a recruiter for the Office of Naval Intelligence, apparently liked the sound of that. Having been injured during his service and granted a 90% disability rating, Lyons was doing okay until 2013, when he went through a divorce and took a number of other tough financial hits. He found his way to buyyourpension.com, one of the websites operated by the plaintiffs, and made a deal.
Eventually, he realized he’d been duped. For instance, Lyons alleges the company never disclosed their exorbitant fees, which meant he was paying an effective interest rate of nearly 43%. He also thought the helpful financial savior who set up the deal, defendant Mark Corbett, was the cocksure, scruffy-yet-trustworthy-looking dude featured on the website. Instead, the complaint alleges, Corbett used a stock photo. It’s all over the internet.
So what, you ask? What’s the big deal? After all, we are all mature grown ups who have the God-given right to throw our hard-earned money away if we want to.
Only thing is, there’s a federal law (38 U.S. Code § 5301) that essentially says we can’t. To wit: “Payments of benefits due or to become due under any law administered by the Secretary [of Veterans Affairs] shall not be assignable… “
In plain language, no. Do not even try to do this. Meanwhile, if you have fallen for one of these scams, you might well be able to sue to recover your money and additional damages. Then, sure, go get those rims.
As for Lyons’ suit, a federal judge recently rejected a motion for dismissal. The case is now expected to go to trial sometime next year.
Ever tempted by one of these deals? Tell us your story in the comments.
U.S. Cyber Command is reportedly going on offense against Russia's power grid by placing "potentially crippling malware" in its systems, The New York Times reported Saturday.
The cyber incursions, authorized to Cyber Command under new authorities that do not require presidential approval, have gotten more "aggressive" and seem to be a warning that the U.S. can respond to Moscow's past cyberattacks, such as the 2016 incursion into the Democratic National Committee and its attack on Ukraine's power grid.
DUBAI/WASHINGTON (Reuters) - The United States on Friday blamed Iran for attacks on two oil tankers at the entrance to the Gulf and said it was seeking international consensus about the threat to shipping, despite Tehran denying involvement in the explosions at sea.
The Navy has named a female president of the U.S. Naval War College for the first time in its history just days after ousting her predecessor amid allegations of excess spending and inappropriate behavior.