Illinois Attorney General Alleges Pension Sales Violate State Lending Laws

On April 19, 2018, the Illinois Attorney General’s Office (“Illinois AG”) announced that it had filed a complaint against a Nevada-based company that claimed to “purchase” portions of consumers’ pension plans.  According to the complaint​, these transactions constituted predatory installment loans with excessive interests rates in violation of Illinois law.  The complaint alleges that the finance charges associated with these loans reached as high as 200%, despite state law caps of 99% on small consumer loans of $1,500 or less and 36% on loans up to $40,000.  According to the Illinois AG, the company targeted retirees and veterans participating in state and/or federal retirement plans, receiving military benefits, or otherwise collecting from pension plans.  The complaint alleges violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. and the Consumer Installment Loan Act, 205 ILCS 670/1 et seq., and seeks civil penalties, consumer relief, injunctive relief, expenses, and attorneys’ fees.

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