A disabled military veteran took out a pension loan for $5,500, but was required to pay back more than $40,000, according to a lawsuit filed by Attorney General Mark Herring.
Herring filed the lawsuit against Future Income Payments, LLC, FIP, LLC, and their owner Scott Kohn, accusing the companies of giving out illegal loans that carried interest rates as high as 183% to at least 650 people in Virginia.
"These companies and their owner took advantage of Virginians who earned their pensions through years of dedication to our nation's armed forces and as civil servants," Herring said in a statement.
Herring says the loans were disguised as pension sales and included language to deceive the veterans. "I can't believe there are people out there who would take advantage of our veterans in this way," Herring said.
Herring says his office has received numerous complaints from people across Virginia, but especially in Hampton Roads due to the area's high military population. "We want the company to pay the consumers back," Herring said. The companies also face similar accusations in other areas, including Minnesota.
News 3 reached out to Future Income Payments, which is based out of Nevada. A person on the phone told a reporter the company doesn't have any comment.
Herring says anyone thinking about getting a pension loan or doing a pension sale should talk to a financial adviser as the transactions are often very risky.