Class Action Alleges Payday Loan Companies Prey on Retired, Disabled Veterans

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In September, a retired United States Air Force veteran filed a proposed class action against Future Income Payments, LLC and three other parties over their alleged unlawful marketing, lending, and collection practices. The 29-page lawsuit, which also names Pensions, Annuities and Settlements, LLC; Cash Flow Investment Partners, LLC; and one individual as defendants, alleges the parties engage in the practice of entering into agreements with retired and/or disabled veterans that include “numerous unconscionable and otherwise unenforceable provisions” effectively disguised as loan transactions that come with excessive interest rates.

The case claims the defendants’ loan transactions with retired and/or disabled veterans are deceptively referred to as “Purchase and Sale Agreements,” the terms of which, the lawsuit continues, usually stipulate that the companies will loan a veteran a sum of money in exchange for a promise from the individual to pay off the loan from funds secured from military retirement or disability payments.

“[The defendants] attempt to disguise the nature of these transactions by inserting into their form contracts a clause stating that the transaction ‘is not a loan’,” the lawsuit says. “However, the transactions are—in substance and by law—loans from [the defendants] to the veteran.”