CFPB, FTC Addressing Questionable Pension Advances
The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) have taken steps to curb questionable practices concerning pension advance transactions, the Government Accountability Office (GAO) says. The GAO made the disclosure
in “Pension Advance Transactions: Questionable Business Practices and the Federal Response,” a report it recently issued.
The CFPB and the FTC have taken “positive steps,” the report says, in strengthening federal oversight of pension advances and enforcement of the rules governing them. These include:
- CFPB investigation of pension advance companies the GAO referred to it;
- CFPB dissemination of consumer education materials on pension advances; and
- FTC review of consumer complaints concerning pension advances, pension advance advertising and the pension advance industry.
The GAO’s report is a follow-up to a June 2014 report in which the GAO identified at least 38 companies that offered advances in exchange for receiving part or all of the pension payments that were to go to the individuals who received the advances.
The GAO reported that it found that some offers those companies made did not compare favorably with other arrangements individuals could make, such as loans and lump-sum payments from pension plans. It also said that some rates or fees had not been disclosed and that some terms of the agreements those companies made were unfavorable to consumers.